Keith Richards, President & Chief Portfolio Manager, ValueTrend Wealth Management
Focus: Technical analysis
Top picks: iShares MSCI Japan ETF, Canadian Apartment REIT, ARC Resources
MARKET OUTLOOK:
For 15 years I have posted on my blog my “Bear-o-meter” score each month. The Bear-o-meter is a quantitative investment analysis tool comprised of 11 factors. They fall under the broad headings of Trend, Breadth-trend, Seasonality, Value, Breadth-momentum, and Sentiment. It is not a market timing tool. Instead, it gives us a picture of the relative trade-off on the S&P 500 of risk vs. return probabilities. Long-time readers of my blog are aware of its accuracy.
Since the start of 2025, the meter has been reading “neutral” to “higher risk” for stocks. This reading has proven correct, given the high volatility and relatively low returns U.S. markets have delivered (about 2.5 per cent YTD). Right now, The Bear-o-meter continues to suggest a neutral to higher risk investment climate. It ranks as “3” on the 0-8 scale, where 8 is bullish, and 0 is bearish.
One big change has been the move by “Smart Money” towards caution/selling, while “Dumb Money” has been buying. FYI: “Smart Money” consists of large investors like pension funds, commercial hedgers, corporate insiders, pro traders, etc. “Dumb Money” consists of small trade volume, ETF and Mutual Fund flow retail money investors.
Because of the consistently low readings of the Bear-o-meter, we have held cash for much of this year, continue to hold about 23 per cent cash, and have been focusing on hard assets, international stocks, and defensive names – one of each of these categories will be covered in my top picks.
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TOP PICKS:
iShares MSCI Japan ETF (EWJ NYSEARCA)
- Broke out, consolidating
Canadian Apartment REIT (CAR-U TSX)
- Swing trade, defensive with 3.5% dividend
- Target is $48 then we sell
ARC Resources (ARX TSX)
- Uptrend, recent retreat to trendline makes an attractive entry point
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| EWJ NYSEARCA | Y | Y | Y |
| CAR-U TSX | Y | Y | Y |
| ARX TSX | Y | Y | Y |
PAST PICKS: March 12, 2025
iShares 20 year T-bond ETF (TLT NASD)
- Then: US$89.86
- Now: US$86.24
- Return: -4%
- Total Return: -3%
Imperial Oil (IMO TSX)
- Then: $96.38
- Now: $112.33
- Return: 17%
- Total Return: 17%
Cash
- Still hold 23%
Total Return Average: 7%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| TLT NASD | Y | Y | Y |
| IMO TSX | N | N | N |
