Markets will be volatile for the rest of this year, Irwin Michael, portfolio manager for the ABC Funds, said in his latest monthly market commentary. However, he remains optimistic about stocks.

“Overall, we remain relatively optimistic with regard to North American equities. However, we expect markets for the balance of 2005 to remain very choppy and volatile,” Michael said. “In addition, as we approach autumn we believe opportunities will appear as the markets are confronted with erratic currency changes, hurricanes, politics, economics, and corporate earnings releases.”

“Once again, while we expect the market volatility and periodic security price weakness to test investor patience and stamina, we remain committed to the fundamentally undervalued securities, which we are currently holding,” he added, noting that he’s finding more undervalued U.S. equities compared with Canadian common stocks. “As a result, our American equity composition within our investment portfolios will continue to climb higher.”

Michael said oil and gas securities have turbo-powered the TSX index the past month with major integrateds and senior producers hitting new price highs. “The junior producers have also sparked great investor interest as many are attractively priced below net asset value,” he said.