Ottawa Citizen

Vaccines will change everything

- CHRISTINE IBBOTSON Christine Ibbotson is author of Don't Panic: How to Manage Your Finances and Financial Anxieties During and After the Coronaviru­s and the bestsellin­g book How To Retire Debt Free & Wealthy. askthemone­ylady.ca

Hold on to your stock portfolio, folks — the next three to five years will be the run-up to a new bull market. Canadian and U.S. economies will soon be on their way to recovery from the pandemic, as we move into this year's “cure phase.”

But will it be enough to just invest the way we always have in the past? Before COVID-19, many of us purchased stock based on an industry or sector analysis. But now that the world is learning to coexist with the virus, things may be very different.

Good, old-fashioned stock picking and bottom-up fundamenta­l analysis will be needed this time around.

For those looking for a stock tip, we expect financials, discretion­ary and industrial stocks to be favoured over the next 12 months. Long-term positions should be considered for technology, communicat­ion services, health care and consumer discretion­ary stocks.

It's my opinion that the North American markets, in general, are the best-positioned equity markets in the world in terms of assets. These markets have already rebounded more than 50 per cent from the lows of March 2020.

This year we expect less policy uncertaint­y, more fiscal stimulus, and a stronger cross-border relationsh­ip with respect to trade now that we have the Biden administra­tion in the U.S.

Right now, the vaccine rollout seems to be having its difficulti­es. But as time goes on and vaccine accessibil­ity becomes more widespread, it will ultimately become the game-changer. Soon, it will unleash the world's pent-up demand for services, (especially travel) as we head toward the late summer and into the fall of 2021.

We can expect interest rates to stay low, as our government­s try to encourage future consumer spending. The U.S. Fed and the Bank of Canada have both put freezes on rate increases until 2024, largely because of continued below-targeted inflation numbers.

Remember that we're still in recovery mode as we experience a broadening out of the markets. Ask your adviser about the fundamenta­l analysis of your stock portfolio. Good fundamenta­ls don't change in a day just because of a virus.

Don't sell off stocks that have a longer-term perspectiv­e, and be careful not to make any snap decisions in the momentum of the market.

 ??  ??

Newspapers in English

Newspapers from Canada