Signs that the bull market is done and portfolio picks as it recovers

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“We’d rather own companies that are price setters instead of price takers,” he said. “We’ve also done very well in the past half decade by being more oriented to growth companies in the U.S. But, if we look at it now, Canada looks relatively cheap compared to the U.S. because we’ve been left behind. Now, some of the companies up here are more attractive than they’ve been in the past. So, we’re interested in global. But, if we look at Canada as a market relative to the world, and its valuation, it’s probably a better time than it has been in the last little bit. So, it’s good to look at home a little bit more.”

Stuart is encouraging advisors to cull their portfolios and clean out companies that have already peaked and don’t have much bounce-back power, and check for companies with pricing power that will be more essential to the world in the next three to five years.

Consider quality names, particularly those that recently reworked their balance sheets with low interest rate debt, so they’re now well-positioned to take advantage of those that aren’t.

“You want to look at who’s financially in a strong position and companies that have a runway to grow that are temporarily being ignored by the market,” said Stuart, noting that companies like Zoom may have topped out, but Apple’s clients will continue to renew their iPhone.

“Be careful about not abandoning the right asset mix for them on the equity side because where people tend to make mistakes is when they make long-term decisions based on short-term movements in the market and a dramatic short-term headline,” he said. “Just use a little common sense as you’re going through them. It’s not really crystal balling.”