A Comment -- General Comments From an Expert (A Commentary)

Yes, definitely. For the rest of the year, it'll be a buy-the-dip mentality. Any short-term pullback should be used as a buying opportunity, primarily in high-quality investments, individual stocks, or ETFs. If you follow that this year, you should have a successful portfolio with good returns.

Yes, he's more focused toward the growth-oriented securities. This will be reflected in his Top Picks. You still have to look at earnings and different sectors of the market and do some analysis. But right now, with lower inflation and interest rates expected over the next 12-18 months, he'd tilt toward more secular growth names over traditional value type of names.

For the next 12-18 months, his preference for sure would be the US market, and a tilt toward the NASDAQ over the S&P or the Dow. In his opinion, the TSX will have lagging returns over that timeframe.

Yes, as an active manager that would be his preference. Commodities don't act the same way at the same time. Some commodities will be breaking out at the same time that others will be pulling back. If we were in more of a commodity bull market, he'd say go with the broad-based exposure. 

But commodity markets are moving more independently right now, there's less correlation between them. You want to pinpoint your exposure to the area where you see opportunity.

Problem with looking for a high-dividend US ETF, in USD, is that there aren't many of them. In Canada, when we think about high dividends, we're thinking 7-9% yield. A lot of similar US ETFs pay only around 3-4%. Depends on an investor's goals. 

When he invests in the US, he's looking for more growth-oriented securities. In Canada, he'd focus on income-type companies that can generate a more sustainable cashflow. Canada is more a low-growth environment. Whereas US is more about growth, especially with the NASDAQ.

An ETF gives you broad-based exposure to a specific market or sub-sector of a market. So if you own something tied to the S&P 500, you're going to get similar returns to the S&P, minus any fees charged by the fund. He likes to keep things simple with his choices.

If you're a DIY investor, you're probably not a pro in terms of currency swings, etc. If you buy the hedge, you never have to worry about an increase or decrease in the currency having an underlying impact on your investment. So for a novice investor, he'd recommend buying the ETF with the lowest cost, hedged, broad-based market exposure.

For professional money managers, they'll factor in whether to go one way or the other and what the cost is of being hedged.

For the most part, should be neutral to slightly up. Won't see significant growth in the stock price of banks in the sector. Still concern with mortgage renewals and commercial properties. No major issues, but no major catalysts either. Covered call ETF can probably work pretty well in that environment.

We've seen an expectation of rates coming down, or at least not going up, and people are more comfortable with that. That's why we've seen a rally in stocks over the last little while. Earnings numbers were reasonable.

People have slowly come to terms with rates not coming down immediately. There's some volatility around that, but the market's getting used to it, which means that it can continue to do well given that the expectation is that sometime down the road, rates will come down again.

They were reasonable. It's the quality of earnings that's important in the long run. And the quality was reasonably good in the US. Decent revenue growth, bringing down cost structure to more normalized levels for their particular businesses. This is what people are happy with, as opposed to "beating" a particular number, since that's a little game that management can play with analysts.

The quality of earnings being better means that companies are adapting to the existing environment and are comfortable with it.

What's important about this year is that a lot of high-population democracies, such as India and Indonesia, are also having elections. The US one is going to have an overwhelming impact on the global economy.

Hard to tell this early on what's really going to happen. It's going to be a bit of a bun fight, with everyone saying all kinds of nasty things about each other. In the US, all comes down to whether you win the Senate and the House. Very difficult with the structure in the US for a president to get anything done unless they win both those bodies, or at least get ones more likely to compromise. This has not been the case of late.

So whoever wins, it will depend on how the House and the Senate are set up. That's the important part. It's how the economy and politics works there. Or doesn't work there. 

There are also a lot of issues in the US with the fact that either would be sort of a "lame duck president", as neither can run again.

Insightful Investing Quotes:

“Being too far ahead of your time is indistinguishable from being wrong" – Howard Marks

This quote goes back to being a contrarian. I often like buying certain stocks when everything is boring, and the stock has not moved for a while. This can present sideways action, but if the fundamentals are strong and growing, and valuation is becoming cheaper, I find that these opportunities can represent healthy consolidation, and eventually a move higher can occur. This can appear as being indistinguishable from being wrong, but I often view it as being early.  
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There's great opportunity in event-driven, idiosyncratic opportunities like a CEO resigns suddenly (i.e. affair with a secretary). Investors should be happy. Most portfolios should be at all-time highs. Ex-uranium, commodities look cheap, such as oil and copper. China is bolstering their economy, which bodes well for commodities. Financials look very good, especially in Europe which sees negative interest rates.

Buy a commodity when they're really weak, and trim them when they start to run then completely exit. If you hold for the cycle, hold only a small portion. He doesn't own lumber. Supply chain problems have been solved, so prices have fallen. Also, demand for housing is not a catalyst, because immigration will offset that.

Gold is pushing to new highs today, above $2,100. Gold has been resilient against higher interest rates and a strong stock market. This upswing, if gold hits $2,300, will give gold stocks a much-needed shot in the arm after slumping the past 18 months. Gold and mining stocks have earnings growth on par with tech stocks.