Jean-Guy Desjardins, 71, is chairman and CEO of Montreal-based Fiera Capital, which oversees $100-billion in assets. He also co-founded TAL Global Asset Management, which was sold to CIBC in 2001
What's your outlook for 2016?
This economic cycle has at least four years to go before we consider the possibility of another recession. We think global growth will be stronger than expected – at least 3.5%. U.S. growth should be above 3%. Europe will be picking up, and so will Japan. China will manage to hang in there with 6.5% to 7% growth. As a result, commodity prices will go up. I would put a target on the price of oil by year-end at about $65 (U.S.) a barrel. With a rising oil price and stimulative monetary and fiscal policy coming from the federal government, it's like having three boosters to the Canadian economy. The place to put your money this year is the Canadian stock market. We expect it could gain 15% or more. The U.S. market could be up 10% in U.S. dollars, but flat or negative in Canadian dollars. We also favour buying European and Japanese equities. We are very negative on the traditional bond market.
Fiera's stock-pickers focus on "best-of-breed" companies. What are some of those names in the firm's portfolios?
We own stocks like Nestlé, Nike and MSCI, an index provider – firms that can sustain a high return on invested capital, are leaders in their industry and have a competitive edge that provides pricing power. They also tend to have a strong brand and unique distribution, while there are often barriers to entry in their space. We generally hold such companies for 10 to 15 years.
What have been your personal best and worst investments?
My best is Fiera, in which I still own a 12% stake. The value of Fiera, after 12 years, is the same as TAL was worth after 29 years. The worst was TAL, because selling it to CIBC was not by choice. It was a good transaction financially, but we were not excited. We had great ambitions for the business.
You continue to lead Fiera's asset-allocation team. What advice would you give investors today?
Underweight fixed-income securities and overweight traditional equities. For someone with a balanced portfolio of 60% stocks and 40% bonds, I would suggest bringing the equity position up to 80% and bonds down to 20%, or as low as possible. We favour not only Canadian equities, but also European and Japanese stocks. I would also rather own cash than bonds. That's because bonds are expected to have negative returns over the next three years as interest rates normalize, and quantitative easing comes to an end in Europe and Japan.
Do you have any hobbies?
I am a serious cyclist – I bike about 4,000 kilometres a year. I train weekdays in a gym. I ski on weekends. It's all work, family and exercise. That's my life.