We’ve had quite a few questions regarding the volatility of the markets over the last few weeks. I think it’s important for all of us to sit back and remember that economic cycles tend to run for years, not months. What's important now is to invest in high quality companies that can outgrow the economy over the next few years.

 

In many cases the companies that have had the best returns over the past 12 months are companies that were almost going belly-up in April/May of 2020. It’s unlikely that these companies will continue to provide the best returns going forward. Now that the economy is on a stronger footing, we want to invest in cyclical industries that can grow as fast or faster than the economy grows. Good potential examples of this are companies in the industrial sector, healthcare and information technology. Capital spending will continue to grow over the next few years and these industries should benefit from this.

 

I should also note that we are currently overweight in cyclicals across all of our models.

 

I have also included a piece from our CIBC Economics Team entitled "Should the Bank of Canada ever reverse the QE engines?".

 

As always if you have any questions please feel free to give us a call anytime.

 

Have a great weekend.

 

Milan