It has been a rocky month for Canadian investors. Energy names, while seeing a bit of a bounce from lows over the last two weeks, continue to be volatile and materials seem to jump around by one or two percent any given day, with the general trend being lower. So what is a Canadian investor to do?

As we outlined earlier, given the industry concentration within the TSX, it can be very hard to avoid the impact seen in the energy sector and materials sector and these areas are creating a lot of uncertainty for investors. The recent top picks reflect this uncertainty. While 5i Research typically covers smaller-capitalization securities, as we approach tax-loss selling season and volatility continues, we found it hard to get overly excited by a whole lot of the smaller names. With that said, the recent volatility has helped to create intriguing entry points for many larger capitalization names that pay stable dividends and hold attractive valuations. We wanted to highlight that these volatile markets are providing opportunities for some of those bigger names that investors may have been waiting on for an entry point and that in some cases, the valuations are getting a little absurd. Additionally, these markets help expose companies who are doing all of the right things with new 52 week highs even when markets decline. 

So while maybe not a typical segment that members would expect from 5i Research, we think the takeaway is that this market offers some opportunities for investors to pick away at long-term investments and rebalance into some more attractive areas based on forward valuations and take advantage of what appears to be knee-jerk volatility in other areas.

See Peter Hodson's top picks on BNN Market Call.

In other media, Ryan Modesto was featured in the Globe and Mail recently, discussing Pason Systems (PSI).