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

His client portfolios always remain well diversified. 

Right now, financial stocks remain a core component of portfolios. Still sees lots of value there, in both Canada and the US. Lots of value in the consumer sector, which has been beaten up for such a long time -- trading at very low multiples, with healthy and rising dividends. This should drive value over time.

Doesn't think either of these 2 will fall. Really hard to say. They're all spending $$ because they see immediate demand, so they're going to satisfy this demand. But 1-2 years of meeting demand is not going to justify the capex that they're putting out there today.

You have to have the confidence, or make the bet, that the brilliant people at these companies know what they're doing. That they're going to spend wisely enough to get that return. A great question, but it's early days and no one fully has the answer.

A market correction is generally characterized as a 10% decline from any given point. This threshold is fairly arbitrary and doesn't actually indicate whether assets are fairly priced, overpriced, or underpriced—it's merely a label applied when values fall by that percentage. Unlock Premium - Try 5i Free

It's a year of transition. One area on the macro side is with the new Fed chair -- everyone's wondering which way he's going to tilt. Secondly, we spent the last 3 years building out infrastructure for the AI revolution. Now we have to sell it, people have to buy it, and people have to make money. We're going from a technology story to an earnings story. 

The infrastructure players sell the large-language models and all the tools that go with it (agents and so on) to enterprises. Everyone's waiting to see how that will pan out. If you look at some of the big industrial, healthcare, financial, and entertainment companies, they're engaging and employing AI.

No. His firm probably had anywhere between 5-10% of holdings across separately managed accounts and through his fund. They've taken a bit of $$ off the table, bringing the weighting down to ~5-8%.

They've taken that money and put it into those industrials, financials, healthcare, etc. that they know are using AI. That's different for his team from the last 3 years, but they think it's the right way to go.

He was going to say that he was hoping this drawdown would happen because he didn't have enough of the memory stocks (like MU, SNDK, SK Hynix). This gives you the chance to return to the scene of the accident and pick them up.

The last few months have really been mixed, with a confluence of geopolitical issues and other headwinds. Markets had a pretty good rebound off the April lows of last year, but haven't really been able to find a clear direction.

There's now a consolidation phase before, hopefully, the next run up. A necessary evil. Though not specifically what we want for US markets right now, it probably makes the next leg go higher. 

His team expects market movements as high as 7400, maybe by the end of April. Perhaps 8000 by the end of the year. This is an optimistic scenario, where good things need to happen and some geopolitical issues need to get sorted out.

It'll be a volatile year, and volatility leads to opportunity. Perhaps more of an active market than last year.

Yes, he expects more than 1 cut this year. Depending on how the nomination for Fed chair goes he expects a minimum of 2, but probably 3, cuts. 

Thinks economic growth is slowing down. Tariffs and other things do end up hurting the consumer. Later in the year, economic data may be a bit lower than people thought, and that might pave the way to another rate cut beyond what's currently priced in. 

Mixed bag. Some of the high flyers such as AMD are trading down today. Certain stocks are priced to perfection. They may not have had a bad quarter, but sometimes there's profit-taking or rotation out of certain investment types. That's just part of the market.

You can take advantage of your high flyers, repurpose that capital throughout the year and, hopefully, buy low and sell high :)

You have to be careful. Very rarely are there Sell positions on them. You have to look at a company and decide if you like it, perhaps using analyst ratings to help you make that decision. There can be other vested interests in those ratings. So don't rely on them too much.

He can't :)  The reason is that he's not a big fan of the preferred share market. You take all the risk of an equity market, yet funds often trade at a discount to NAV. That market hasn't been super-kind to investors.

For income he'd rather own a pure dividend play, through either individual stocks or an ETF. If you want enhanced income, look at some of the covered call ETFs.

Frankly, the bond market's been tough. Some things that traditionally were supposed to drive the bond market higher haven't really worked as well as expected. Right now there's a disconnect between using bonds to diversify and the income generated from them. With interest rates having come down, he'd have expected better performance.

Instead, try looking for alternative income sources to see if there's a better play out there than just a traditional bond fund.

Like last year, 2026 is volatile. Some big companies are up or down 15%. January looks like markets were up 0.5%, but the real story is that there was lots of speculation and whipsawing. You have to be a long-term investor. The market valuation is a little higher than average, nothing terrible. There are companies worth buying now for the long term. Sectors he's picking away at: financials, real estate and industrials. In tech, he's holding onto Meta and Alphabet.

The narrative to explain all that points to the potential appointee (Kevin Warsh) to The Fed, and we'll have to see if he gets confirmed. People are trying to figure out what his regime would look like. Is he going to focus on inflation, or is he going to cut interest rates like crazy to satisfy the US administration?

If he focuses on inflation, that might be good for the USD but bad for gold and bitcoin. Things change so quickly, you can't draw a blanket conclusion and apply it to a Fed appointee over the next number of years.