Michael Decter, chief executive officer and chief investment officer, LDIC Inc.

FOCUS: North American large caps 

MARKET OUTLOOK:

We expect equity markets to remain volatile. There will be sector rotation and narrow markets until the U.S. Federal Reserve sees a path to its target inflation rate and stops increasing interest rates. When rates plateau and certainty is restored, there will be a basis for the yield curve resuming to a more normal shape, not inverted.

Equities will remain volatile until there is a rate pause and will move higher when some of the $5 trillion parked on the sidelines will come out of guaranteed investment certificates (GICs) and short-term ETFs and goes back into equities.

Also helpful would be an improvement to global growth forecasts perhaps driven by stimulus in China. Until inflation is contained there is a risk of a hard landing for markets if central banks raise rates so high that consumer spending is dramatically reduced. China has just begun cutting interest rates. Hopefully, by 2024 the rest of the world will follow.

We do believe there will be an opportunity to lock in fixed income returns in the 5.5 per cent to six per cent range this year.

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TOP PICKS:

AMAZON.COM (AMZN NASD)

Value prices play on AI as well as its other better know businesses. 

ELI LILLY (LLY NYSE)

Newish diabetes drug is likely to be approved for weight loss. It is a competitor to Ozempic from Novo Nordisk.

TOURMALINE OIL (TOU TSX)

It is the largest natural gas producer in Canada with 75 years of drilling locations. It will benefit from LNG shipping to Asia in 2025 and pays significant special dividends.

PAST PICKS: February 18, 2020

JPMORGAN CHASE (JPM NYSE)

• Then: US$135.64
• Now: US$141.38
• Return: 4%
• Total Return: 15%

STRYKER (SYK NYSE)

• Then: US$221.93
• Now: US$297.43
• Return: 34%
• Total Return: 39%

VISA (V NYSE)

• Then: US$211.20
• Now: US$227.17
• Return: 8%
• Total Return: 10%

Total Return Average: 21%