3) What will be the strongest/weakest sectors?
Assuming we are right that 2010 will look much like 2009, expect cyclical sectors such as Materials, Industrials, Consumer Discretionary and Technology to continue to do well. In addition, we would expect good performance from the Energy and Financials sectors. Defensive sectors such as Consumer Staples, Healthcare, Telecom and Utilities would be expected to perform relatively poorly.
4) What is the most important question I should ask before selecting an investment advisor?
The most important question you should ask is to yourself, that is, “can I work with this person?” The very nature of any profession is that it will have varied personalities. The basic criteria of qualifications, experience, the firm behind them, and breadth of products and services can be met by many excellent advisors in the marketplace. But, the nature of the client advisor relationship necessitates that you actually enjoy working with your advisor as most people rank financial health just outside of their family and physical health, and it should be in the hands of someone you can work with and trust.
5) Where and how are you personally investing at the moment?
Given that my firm is part of a large financial institution I have larger than normal position in financial services. The balance is split between the materials sector and a sector neutral portfolio.
Kenneth Popowich
Investment Advisor
HSBC Securities (Canada) Inc.
1) Is this a good time to invest?
There are always investment opportunities regardless of the economic situation. Given market activity over the past 18 months there are good investment opportunities now. It’s a question of matching the right investment opportunity to your time horizon, risk tolerance and requirements for income. Investors should work with their advisors to determine an appropriate strategy for their portfolio, taking into account these factors.
2) How do you think the market will perform in 2010?
Several economists have suggested that most of the world economies are out of a recession, however there will likely continue to be volatility. Global economic recovery should be reflected in the equity markets, which means reasonable performance to investors. There are no guarantees, so make sure the decisions you and your advisor make are tailored for your specific circumstances.
3) What will be the strongest/weakest sectors?
Given the nature of the economic situation, with strong growth in developing countries such as China and India, where resources are in great demand, several commodities appear attractive for many investors at the present time. Other areas such as technology may benefit from pent up demand, given corporate cost reduction strategies over the last 2 years to manage slower earnings revenue. Some emerging markets provide a compelling argument as well as the small cap sector which often is first to benefit from economic recovery.
4) What is the most important question I should ask before selecting an investment advisor?
One of the most important questions to ask is about the licensing of the advisor. Are they regulated by any federal or provincial body which monitors their activity? Also ask about their industry accreditation and experience. Most importantly, make sure your philosophies match.
5) Where and how are you personally investing at the moment?
My portfolio is well diversified, with exposure to blue-chip dividend paying stocks as well as resources and small cap. Diversification is important, and having diversification amongst, sectors, market cap, and geography is also critical.
Brad Bissett, CFP, FMA, FCSI
Senior Financial Planner
TD Waterhouse Financial Planning
1) Is this a good time to invest?
If you have a mid–long term investment horizon and are comfortable with market fluctuations, investing in equities as the global economy recovers could prove to be rewarding. I advise my customers to break the habit of using their emotions when investing. I don’t want to see them fall into the trap of buying high when they are comfortable and selling low when they are nervous. It can often be difficult for investors to leave the comfort of their GIC’s during an economic storm, but times like this is when the greatest opportunity lies ahead of us.
2) How do you think the market will perform in 2010?
In 2010, I expect there will be a lot of volatility as we digest minute by minute news briefs but overall I think as economic conditions improve, investors would gain the confidence to move back into equities as they are not being rewarded for sitting on the sidelines in cash.
