David Driscoll is a partner at Toron AMI International Asset Management. His focus is on global equities.
Top picks
Rotork plc
Rotork is the world's largest maker of valves to manage the flow of liquids, gases and powders. As demand for infrastructure projects in the oil and gas, water and power industries grows worldwide, Rotork will be involved.
Paychex Inc.
Paychex is an automated payroll and human resources processor for small and medium-sized businesses in the US. As interest rates begin to rise and small business employment rises, Paychex should benefit by earning more on cash balances held and a higher number of payroll clients.
Fomento Economico de Mexicano
Femsa is the largest bottler of Coca-Cola products in Mexico, Latin America and South America. It also owns OXXO convenience stores in Mexico. As economic growth continues in the region, demand for Femsa's products should rise.
Past Picks: September 14, 2012
W.W. Grainger
Then: $206.01
Now: $261.25
Total return: +28.73 per cent
Jardine Matheson
Then: $54.50
Now: $54.00
Total return: +21.76 per cent
Essilor International
Then: $73.12
Now: $88.14
Total return: +21.76 per cent
Total return average: +17.04 per cent
Market outlook:
I believe that the market rally that began last fall has been artificially induced by the Federal Reserve's policy of ultra-cheap credit and not driven by corporate earnings growth. I anticipate that the market has topped-out for the moment and we may see a correction between now and October as valuations return to more reasonable levels. Moving forward, I believe that the market should grind higher, albeit slowly, as real economic growth worldwide is barely keeping up with inflation. While it's wise to continue to hold stocks for the rising dividend streams, it remains prudent to keep some cash available to take advantage of opportunities following any serious market sell-off.