CASH (CASH)

Cash gives you options to buy when markets fall lower or build more cash to be a shock absorber to go into GIC's, floating rate bonds paying 6% or rate reset preferreds paying 5.5%. You need these things at the top of the cycle--and one never knows when that it. He holds 12-14% cash now. He thinks this correction is temporary, so he'll be buying beaten-up stocks.

If you need to park $100,000 for 3-6 months, buy the RBC high-interst savings vehicle in the 1.5% range. Wherever you park it, make sure the cash is secure and liquid, but don't expect a high return. Generally, bank money market funds are fine.

(A Top Pick Aug 15/17) You want to continue to hold some cash.

Over the summer, he held a little more cash. There's more risk in the summer. He does this every year. This year he held 20% cash. The cash is there for buying opportunities. He moved out of staples. The market has been a little choppy, but not a sell-off.

(A Top Pick June 23, 2017). The central bank cycle was turning against liquidity. He also thought the market was significantly overvalued and thinks the US market (but not the Canadian one) has gotten more overvalued. He thinks the interest-rate increases have done damage and that business will slow down. He doesn’t know how far the market will go down, but looking at Shiller PE ratio, the market looks 40% to 50% overvalued. In addition, in every 10 year period, there has been at least one 30% correction. He sees a potential for that type of correction now, but can’t predict when it will happen. A different bubble triggers the correction each time. This time, he is watching emerging markets. The US market might continue to do well even if there is a big correction in emerging markets, partially because of the tax cut, but at some point that sugar high will wear off.

He is 20% cash in his equity platform. A little cautious based on August September cycle.