Imagine consistently crushing the market year after year – that's the remarkable track record of Sid Mokhtari, CIBC's chief market technician, who once again outperformed the TSX last month with his clever stock selections. But here's where it gets intriguing: His secret isn't some insider magic; it's a methodical approach that has delivered standout results for investors willing to follow along.
For the fourth year in a row, Mokhtari has beaten the broader index through his carefully curated basket of monthly stock picks. Each month, he releases a report highlighting his top 10 stock ideas, relying on a disciplined strategy that's proven remarkably effective. He starts by sifting through the top 100 companies by market capitalization in the S&P/TSX Composite Index, applying technical analysis to spot opportunities. This tech-driven method has not only weathered various market storms but also consistently delivered superior returns, making it a go-to for those navigating the unpredictable world of investing.
To put this in perspective, think of it like a skilled chef selecting the freshest ingredients for a winning recipe – Mokhtari's process focuses on data-driven signals rather than hunches, helping even beginners see patterns that might otherwise seem overwhelming.
And this is the part most people miss: His success isn't a fluke. In December, his selection of top picks surged by 1.36 percent, easily outpacing the S&P/TSX Composite Index's modest 1.05 percent gain. Zooming out to the full year, 2025 was a blockbuster for his portfolio, rallying 51.3 percent against the index's 28.3 percent (excluding dividends). He also outperformed in previous years: 2024 by 5.8 percentage points, 2023 by 6.3 points, and 2022 by 2.7 points. These numbers aren't just stats; they demonstrate how his approach can turn market challenges into opportunities, like a seasoned sailor navigating rough seas to reach calmer waters.
For January, Mokhtari has assembled a fresh, diversified lineup of 10 stocks spanning six key sectors, each chosen for its potential based on technical indicators. Let's break it down sector by sector to make it easier to grasp: In materials, where resources like mining and agriculture drive value, he's eyeing CCL Industries (CCL-B-T) for its packaging expertise, Ivanhoe Mines (IVN-T) for its mining prowess, and Nutrien (NTR-T) as a leader in fertilizers. These picks highlight the sector's role in global supply chains, much like how essential materials fuel everyday products from food to electronics.
Shifting to consumer discretionary, which includes companies benefiting from spending on non-essentials, he's selected Dollarama (DOL-T) – think of it as the dollar store giant offering budget-friendly treasures – and Gildan Activewear (GIL-T), known for its athletic wear that's popular worldwide. In financials, where stability meets growth, Fairfax Financial Holdings (FFH-T) and Great-West Lifeco (GWO-T) stand out for their insurance and wealth management strengths, providing a hedge against economic ups and downs.
For consumer staples, those reliable companies like Premium Brands Holdings (PBH-T) that supply everyday necessities, he's added one to his list, ensuring resilience even in tough times. Telecoms get a nod with Quebecor (QBR-B-T), a major player in media and communications, reflecting the ongoing demand for connectivity. Finally, in industrials, TFI International (TFII-T) rounds out the basket with its transportation and logistics focus, supporting the backbone of trade and commerce.
Looking ahead to January, history paints an optimistic picture for equity markets. Over the past 30 years, the S&P/TSX Composite Index has averaged a solid 1.2 percent return during this month. Sector performances vary widely, from flat (zero percent) to robust gains, offering a mix of opportunities. Top performers historically include health care at 6.3 percent, technology at 5.2 percent, communication services at 1.4 percent, and materials at 1.4 percent – think of health care as the steady healer in a portfolio, or technology as the innovative disruptor driving future trends. On the flip side, utilities often lag with an average zero percent return, acting as the dependable but less exciting utility player.
But here's where it gets controversial: Mokhtari suggests a potential shift in market dynamics for the new year, favoring cyclicals (companies tied to economic cycles), value investments (undervalued gems), and GARP (growth at a reasonable price with solid earnings) over momentum or high-beta growth stocks that may be overpriced. This could spark debate – is he onto a market correction, or just spotting a trend? His mean-reversion model hints at a comeback for low-volatility and quality factors that have been underperforming, challenging the idea that 'hot' stocks always win. For beginners, this means considering how economic shifts might favor steady performers over flashy ones, like choosing a reliable car over a high-speed sports car for a long trip.
In his January 2 report, Mokhtari notes, 'It may be reasonable to suggest that market internals and relative strength rotations have already begun to shift in favour of cyclicals, value and GARP (growth at a reasonable price) with supportive earnings, at the expense of momentum with high beta (growth with rich valuation). Our mean-reversion model also shows a potential positive relative reversal in low volatility and quality factors that have notably lagged.'
What do you think about these picks – are they bold enough, or too conservative? Do you side with technical analysis like Mokhtari's, or do fundamentals hold more weight in your view? And regarding that shift to value and quality – is this the market's way of balancing out excesses, or a missed opportunity for risk-takers? Share your thoughts in the comments; we'd love to hear differing opinions!
