Gordon Pape is the editor and publisher of "The Income Investor" and "The Internet Wealth Builder". His talk was called "The Best Investments for the Year Ahead".
He started off with a review of 2012. He said that the sovereign debt crisis just went on and on. Chinese growth is slowing. Falling commodity prices hit the TSX. Political gridlock in the US is slowing growth. The bond bull market continues. The US market outperformed the TSX year over year with the Dow up 9.9% and the TSX up just 2.3%. However, he said that despite all the problems, 2012 is a good investment year.
Next he talked about the winners in 2012. The bond market was a winner, but he thinks that it is the last gasp of the bond bulls. Investors pursued dividend yield. REITs were also another yield story. Limited Partnerships (LP's) and Income Trusts are still around. He said Wall Street stocks have been a winner as well as German stocks. Some TSX sectors have done well and they include Health Care and Consumer stocks.
He also talked about the losers in 2012. Some TSX sectors did poorly and they were mining and energy stocks as well as resource stocks. Greek and Spanish bonds did poorly. He also said that one of the things Canada needs to do is move our oil out to places besides US.
What he sees ahead for 2013 is that the European angst will continue. He sees slow growth there but thinks a recession is unlikely. He thinks that the Middle East tension will unsettle markets. He thinks that there will be more gridlock unless it can be broken. He thinks that China will regain its momentum. As China rebounds we should see a gradual recovery in commodities. The Bond Bull might end. He see New York stock exchange beating the Toronto one. He thinks that gold will continue to rise.
One of the things he thinks will occur in 2013 is the continuation of the yields play. That is people will pursue yield in their investments. Some Canadian stocks he mentioned were BCE Inc. (TSX-BCE), New Flyer Industries Inc. (TSX-NFI), Brookfield Infrastructure LP (TSX-BIP.UN) and Bonavista Energy Corp (TSX-BNP). He said that BIP.UN was a spin off from Brookfield and that it is still at a good value. He liked Bonavista because of the 7.9% yield. He thinks the US market is going to outperform the Canadian one and one US stock he mentioned was Plum Creek Timber (NYSE-PCL).
He thought this stock will benefit from the US housing recovery. He thinks that gold and gold stocks are going to go up because of QE3. He also likes Franco-Nevada Corp. (TSX-FNV, NYSE-FNV). He says that this is a gold royalty company that has month dividends. He also said that he thought that Canadian oil prices will remain low because of the lack of pipelines.
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