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The Bear of All Bears Tells Us How He's Investing This Year

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Gluskin Sheff’s David Rosenberg recently outlined for his readers how he’s putting money to work in 2011.

True, the celebrated bear - though he prefers ‘realist’ – has come under criticism for remaining so downbeat on the equity market. Then again, he’s countered his skeptics by arguing that his bullishness on income-generating assets (bonds, REITs) and hard assets (commodities, precious metals) has served him just fine, thank you very much.

Now Rosie has outlined for his fans how he’s committing capital in 2011. While still cautious on the overall equity market, the market pundit does see a silver lining in the energy sector and in large-cap and mid-cap companies that have lagged the upturn this cycle and are relatively inexpensive.

He says he’s focusing on large cash-flow generators with strong balance sheets that pay out a reliable dividend stream. There are still needles in the haystack, he writes, in oil, large-cap tech and the defensive dividend paying stocks within health care and consumer staples.

Although he doesn’t mention any specific picks, examples of such stocks would include Microsoft, Johnson & Johnson and Procter & Gamble.

In addition, Rosenberg says that the recent backup in bond yields sets up potential decent returns in fixed income markets: “Corporate balance sheets are in terrific shape on both sides of the border and we see market interest rates trading in a tight range through most of 2011; therefore, credit strategies are going to be an area of focus.”

Finally, the Toronto-based investment pro offers his two cents on his home country. “The secular bull market in commodities is one reason, though not the only one, why we also remain long term positive on the outlook for Canada relative to the United States, especially with regard to the Canadian dollar.”

Shares the man’s enthusiasm for Canada? Then one option is the iShares MSCI Canada Index ETF (EWC).
POSITION:  No positions in stocks mentioned.