Fear and loathing in Canadian equity markets, dividend picks after the big selloff, and more market insight and advice

This translation has been automatically generated and has not been verified for accuracy.“Buy the ticket, take the ride”, wrote Hunter S. Thompson in Fear and Loathing in Las Vegas, “and if it occasionally gets a little heavier than what you had in mind, well...maybe chalk it up to forced consciousness expansion.” The current experience of buy and hold investors, while less colourful than Mr. Thompson’s Vegas road trip, is metaphorically encapsulated in the sentiment.

The market moves are dramatic but there’s not a lot of advice that will help investors at the moment – too much damage has already been done. As of midday Friday , the S&P/TSX Composite is down 29.5 per cent from its February 20 high and the S&P 500 is 26.0 per cent lower than it closed on February 19. Domestic energy stocks that once traded above C$50 are now changing hands with pocket change prices. The S&P/TSX Composite Index Thursday saw its biggest drop since 1940.

Investors can be forgiven for raising cash levels in their portfolios to help them sleep at night but there is real risk in shifting portfolio allocations now. Selling and de-risking makes it more likely investors will not fully benefit from the market recovery.

In the short term, the news is likely to become more negative. Measures to contain the COVID-19 virus in North America have only started, and the precedents provided by South Korea and Italy imply that the infection rate will climb from here. Equity markets still have downwards adjustments to make. Citi global strategist Robert Buckland forecasted that there won’t be any global profit growth in 2020 but analysts are still projecting a year over year gain of eight per cent. Investors can expect disappointing earnings reporting seasons for the remainder of the year as companies fall short of expectations.that the country’s senior medical advisor, Zhong Nanshan, predicts that the global coronavirus pandemic is likely to end in June.

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