More than 2,000 gather for Canada's longest-running investor forum
TORONTO, July 24 /CNW/ - Canadian investors must get back to the basics
and stick to proven investing principles in times of market uncertainty, five
of the world's leading investment experts said today.
"Sir John Templeton said it best - successful investing is not an easy
job," Don Reed, President and CEO of Franklin Templeton Investments Corp. told
more than 2,000 financial advisors and investors at the company's annual
Investment Outlook and Opportunities Forum in Toronto.
A perfect storm of economic factors - including the crisis in the U.S.
housing market, sky rocketing oil prices, market volatility around the world
and the dramatic rise in the value of the Canadian dollar - have challenged
investors across the country, Mr. Reed said in his address to the forum.
"In these uncertain times, investors need to rely on the experts.
Professionals know how to find value, diversify their asset mix, think
long-term and find the best stocks through deep analysis," said Mr. Reed, Lead
Manager of the $2.4-billion Templeton International Stock Fund.
Templeton's lesson: Pessimism means opportunity
The annual event was particularly poignant for investors this year. Sir
John Templeton, the legendary philanthropist who pioneered value investing,
passed away on July 8 at the age of 95. Sir John founded the Templeton Growth
Fund, a landmark value-driven global investment fund, in 1954 in Canada. The
fund's annual meeting has grown in size and scope to become Canada's
longest-running forum for financial advisors and investors.
Sir John's investing legacy was reflected in the remarks of many of the
forum's presenters, a team of investment professionals from around the world
that manage billions of dollars on behalf of large and small investors.
"Pessimism equals opportunity," said Lisa Myers, Lead Manager of the
Templeton Growth Fund, invoking Sir John Templeton's investing credo: 'The
time of maximum pessimism is the time to buy ... and the time of maximum
optimism is the best time to sell.'
Bearish market sentiment means many great global companies with solid
fundamentals are trading at very attractive price-to-earnings ratios, Ms.
Myers said. The $3.4-billion fund's investments include software giant
Microsoft Corp., conglomerate General Electric Co. and drug maker Merck & Co.
"Solid balance sheets and global strategies provide support during the
current economic weakness, and should sustain growth in the future," said Ms.
Myers. "We are investing in quality names with strong long-term prospects at a
Canada in the crossfire
Canada's maturing bull market is rife with risk as the number of
top-performing sectors and stocks continue to shrink, said Garey Aitken, Chief
Investment Officer of Bissett Investment Management.
Over the past five years, nine out of ten sectors on the Toronto Stock
Exchange produced positive returns. But for the past 12 months ended June 30,
only four of ten sectors were in the black - mining and materials, energy,
technology and utilities.
For the twelve months ended June 30, the TSX posted a return of 6.8 per
cent. In contrast, a slender group of five stocks - Potash Corp. of
Saskatchewan Inc., Research in Motion Ltd., EnCana Corp., Goldcorp Inc. and
Canadian Natural Resources Ltd. - were up 8.9 per cent during this same
period. In other words, five stocks together beat the return of 248 competing
"Corporate profits have peaked and growth, both in the U.S. and globally,
has slowed," said Mr. Aitken, the Lead Manager of the $3.2 billion Bissett
Canadian Equity Fund. "It makes sense for Canadians to depend upon expert
financial advice that relies on tried and true principles to navigate these
Understanding oil is best left to the experts
It's best to rely on expert advice when trying to decipher the complex
oil market, said Brent Smith, Lead Portfolio Manager and Chief Investment
Officer of the $8 billion fund-of-funds program Quotential. In June, crude oil
surged above $142 (U.S.) a barrel; only four years ago, oil sold for as little
as $32 (U.S.) a barrel.
While China's economic growth is leading the demand for oil, a mix of
market speculators and institutional money are all having an impact on the
daily price of crude, he said.
"You can either try to react to the markets or be as best prepared as
possible," said Mr. Smith. "A well prepared investor considers the basics of
successful long term investing - asset mix, allocation and risk management."
The challenge of outperformance
The Mutual Series' investing strategy has a track-record of
out-performance in down and sideways markets, said Anne Gudefin, Senior Vice
President of Franklin Mutual Advisers, LLC and Lead Manager of the
$1.3 billion Mutual Discovery Fund.
Ms. Gudefin's team is scanning the globe seeking deep value investment
opportunities overlooked by other fund managers, often including distressed
securities or merger arbitrage situations. In both cases, compelling
investment opportunities may present themselves, Ms. Gudefin said.
"We know investors get nervous in volatile market situations, but our
returns are historically uncorrelated to the overall market. Where some
managers see risk, we see opportunity," said Ms. Gudefin.
Franklin Templeton Investments Corp. is a wholly owned subsidiary of
Franklin Resources, Inc., a global investment organization operating as
Franklin Templeton Investments. In Canada, Franklin Templeton Investments
provides global and domestic investment advisory services to the Franklin,
Templeton, Bissett and Mutual Series funds, and institutional accounts.
Franklin Templeton Investments Corp. has more than 700 employees providing
services to more than 1.2 million unitholder accounts and more than
200 pension funds, foundations and other institutional investors. Franklin
Templeton Investments Corp. can be found at www.franklintempleton.ca.
Franklin Resources, Inc. (NYSE: BEN), is a global investment management
organization operating as Franklin Templeton Investments. Franklin Templeton
Investments provides global and domestic investment management solutions
managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust, Darby and
Bissett investment teams. The San Mateo, CA-based company has more than
60 years of investment experience and approximately US $580 billion
(C $592 billion) in assets under management as of June 30, 2008.
/NOTE TO PHOTO EDITORS: A photo accompanying this release is available on
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For further information:
For further information: On July 24: Jason Graham, Argyle
Communications, (647) 202-3819; Karen Passmore, Argyle Communications, (416)
557-5220; Media contacts: Keith Damsell, Franklin Templeton Investments Corp.,
(416) 957-6099; Sarah Powley, Franklin Templeton Investments Corp., (416)