TD Asset Management’s chief investment officer is adopting a more conservative approach to focus on capital preservation. Cooper sees gold as the best bet with the global economy stuck in neutral, and as loose central bank policy, the U.K. Brexit vote, and a looming U.S. presidential election stoke demand for havens. The firm, which oversees more than C$300 billion ($230 billion), shifted to "maximum overweight" in gold for its portfolios during the second quarter from a "modest overweight" according to Cooper’s latest market outlook report.
Holding a mix of bonds is helping TD guard against “deflationary forces” emanating from Asia and Europe, he said. Although TD doesn’t expect deflation in Canada, high debt levels, disruptive technologies like Uber and AirBnB and China’s inability to reign in oversupply are contributing to a weak global outlook, he said.
"We’re cautious but not negative. This is not about canned goods and getting in the bunker," he said.My view:
This is an interesting statement from a chief investment officer.
The fact that getting into the bunker has crossed his mind shows the seriousness of the global economic problems we face.
While we are currently underweight gold stocks due to their extended recent run, we may miss out on some upside before the inevitable correction.
Once that correction is complete, it will be time to back up the truck to buy every quality gold stocks and a few juniors that our portfolios can handle. It will then also be time to move to the bunker.
You could say it will be "bunker time"!