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

Basic Real Estate Terms: House Price to Income Ratio.

While real estate prices are interesting on their own, having more context for them is far more helpful. As a crude example - if a house costs a million dollars but the average income in a country is two million, affordability is not an issue. If the average income is $50,000, the situation is far different. Countries with the lower housing prices should have a longer-term tailwind in terms of an economic driver as home ownership and prices rise, lifting the broader economy.
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We've had a couple of different types of market. Until mid-year, we had a market dominated by very few stocks, mostly in tech and telecom. Since the beginning of Q3 at the start of July, we've seen a rotation and a broadening out. Small cap stocks are doing a bit better. Industries and sectors that didn't participate in the first half of the year, like healthcare and industrials, have come on a little bit, and that's very healthy for the market.

Likes it for the long term. Just look at the demographics to understand why. Most analysts think that growth in healthcare will be double GDP over the next 10 years. So we can take advantage of that by owning some of the best stocks in that sector.

He participates in pharma through MRK, and he owns AMGN in the biotech sector. He has exposure to broad, diversified companies like CVS, which is quite vertically integrated from insurance right through drugstore operations. There's good opportunity there. See his Top Picks.

He also owns ELV, a pure play in health insurance.

He likes the sector, but you have to be pickier. Some of the companies tend to be low growth and high multiple, which could spell trouble down the road. There are opportunities in the area that he's taken advantage of.

It's harder to decide when to sell than when to buy. Before you buy, you have all the time in the world and there are no emotional tugs.

Once you own a company, the emotional side kicks in. If you look just at the profit you've made, you're only looking at one side of the equation of value. I've made x%, so should I sell because I've been rewarded? This is a flaw in investment thinking. Instead look at fundamentals, growth of earnings and cashflow, revenue growth. If it's a better value today than when you bought, keep it. This way you give some stocks in your portfolio the chance to double and more.

Take the price and look at what you're pricing, rather then looking at your own experience.

He's looked at the sector, but doesn't own any stocks. Hard to find an analyst who doesn't say there's going to be a shortage, which will drive price. Could be a good long-term hold, but no catalyst that compels him to buy today. Be careful about the size of your investment. Don't make it a large part of your portfolio, because it could be dormant for some time until there is a catalyst.

He doesn't like to buy companies that are at an early stage, trying to find their way and their footing, without a keen eye toward profitability. The market responds to profitability, and it grows tired of just the good idea.

So far this year, people are mispositioned for a recession. Sentiment for a recession has been decreasing, and so there's been this accelerated movement to the upside. With inflation, bond yields, and valuations being where they are, you're going to see a bit of a soft patch.

July was wonderful, but he fully expects a healthy pause, especially with seasonality that typically happens around this time.

Very concerning. Some are seeing strong parallels with Japan in the 1990s, and that's bad news. There's stagnating economic growth, an aging population, and a real estate problem. The good news is that the fallout in Japan didn't happen right away. China can learn from Japan's experience and try to be more agile, reverse course, and be more aggressive to stimulate.

Outside of China, emerging markets are doing well. Legislation in North America is bringing reshoring. He's not sure that we need China to grow the way it was 10-20 years ago in order to have the global growth story. But we don't want China to be a drag, so it's important what happens there.

If you're a 60/40 or a 70/30 person, stick with that. For the last couple of years, you wanted to be under that while rates were going up and equity prices were falling. It's a balance. We're not in full-on growth mode or economic recovery. We could have a recession. Don't be too offensive, but don't be too defensive.

These stocks are to some extent interest-rate dependent. GICs have become an attractive return with no risk. Higher interest rates have increased the cost of funding. If inflation and rates can at least stabilize, these stocks can work. They don't need inflation to reach 2% right away, as long as we're heading in the right direction.

How can investors know if their portfolio in on the right track? Here are a few options:

• Ask your current advisor to review your portfolio - Obviously they will say it is fine since they made it!
• Ask another advisor to review your portfolio - Obviously they will say it is bad or needs work, as they want your business! And to be clear, investment management is an odd business where two people could look at the same portfolio and have opposite opinions on whether it is good or bad, and both may be right (to a degree)!
• If you don't have an advisor and are asking them to review your portfolio, it is probably not fair unless you plan to give them your business, and from a resource perspective just isn't realistic as they aren't going to do a thorough in-depth analysis of your portfolio for free.
• Ask family and friends - This might be the most dangerous option. While these individuals are more than likely well-intentioned, in most cases they probably do not know much more than you do. Or even worse, they THINK they know more than you and others.

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Soft landing unlikely given status of consumers in North America.
Expecting higher for longer interest rates from US Fed. 
Believes inflation will be sticky for the next few years. 
Watching retail earnings results (Walmart) this week to gauge investor sentiment.
Large retailers are good "bellweather" on state of economy.
Economic weakness in China bad sign for goals of becoming international leader.
Economy in China will survive given high level of government intervention. 

Upcoming US Fed symposium in Jackson Hole will focus on interest rates.
Debate in Jackson Hole will be on whether to raise rates.
US/Mexico trade volumes recently surpassed China - indicating more "friend shoring" in manufacturing. 
Question is whether to keep inflation targets at 2-3% given strength in economy.
Expecting further inflation - believes economy "needs" a hard landing.