How to shop for investment bargains when everyone’s ‘wrote this off as the end of the world’

Renato Anzovino is a portfolio manager at Heward Investment Management in Montreal.

Market pullbacks always create opportunities for those willing to take the plunge, but they don’t necessarily desire to make risky bets, particularly by purchasing high-quality businesses that might be misunderstood or less sensitive to the economic slowdown.

Renato Anzovino, portfolio manager at Heward Investment Management, takes advantage of market volatility by targeting firms that should boost their dividends moving forward.

“There are a lot of questions in Canada, but people have wrote this off as though it’s the end of the world,” he explained. “We don’t think that as there are opportunities, particularly given how horribly the market has been doing in the past few years.”

Looking within the rear-view mirror isn’t necessarily the easiest method to invest.

Anzovino noted that even high-quality names are seeing share price fluctuations within the 10 to 20 per cent range. He is using these up and downs to both add and reduce positions in the Heward Canadian Dividend Growth Fund, that is up 8.3 per cent on a five-year annualized basis as of Jan. 31, 2016.

“There is lots of panic in the market, the fundamentals of many companies look rock-solid,” Anzovino said. “In the dividend growth environment, the marketplace hasn’t done an excellent job analyzing companies.”

He highlighted the S&P/TSX Canadian Dividend Aristocrats Index, which includes companies that have raised their dividends every year not less than 5 years.

Many energy companies that Anzovino noted should not have high dividend payouts made the cut. That is a big reason the index is down a lot more than 15 percent previously year.


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