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

Gold. Overall, gold stocks have taken a beating. Gold usually performs well this time of year, and it just hasn't. Hurt by rising interest rates and stronger USD. When the market's going down and gold is going down, gold stocks tend to go down even more. If the USD comes off, gold could go up a bit, but he wouldn't be stepping into gold right now. He has a 1% position in GDX. September tends to be strong for gold, but we haven't seen it yet. The next seasonal opportunity would be in December.

Energy seasonality. Difficult to tell what's going to happen with energy prices with the Russia-Ukraine war. Don't take a position in energy based just on that. The first seasonal period is Feb 25 (sometimes starts in January) to May (though it could go longer). The second is July 27 - late September/early October, and this one isn't as strong as the other. October/November tends to be very weak. Be very careful. Nat gas tends to well from September to mid-December.

Seasonal investing. Seasonal investing is a long-term discipline. You're asking when do certain sectors do well in the year, and you rotate into those sectors. It doesn't work all the time for every sector, but for most of the sectors it provides extra value long term. Just because the seasonality is from A to B, it doesn't mean you have to be in there. If the technicals and momentum aren't holding up, you exit.

Semiconductor chip stocks. Supply issues. Now we're seeing a build in inventory, so you have to be a bit careful. Seasonally, chips do well at the end of October and November. This time, he'd be hanging back. With mid-term elections and market seasonality, you could see better opportunities to enter later on toward the last few days of October. Higher beta than the technology sector overall. Push for domestic chip production will have a long-term influence on markets, but that will take about 5 years.

Pipelines. Hybrid of utility and energy sectors. Not a bad way to play energy. He'd skew more towards pipelines than to oil at this time. You'll get the yield, and it's more defensive.

Inflation will come down, based on leading indicators. This will cause the Fed to pause a little and this will benefit markets. There will be a positive close to 2022.

tech Big-cap tech is heading to serious growth slowdown. Software and services are investing a lot to buy growth while cloud companies invest a lot in capex.

We need to focus on the consumer, because that's where we will see a driver to the economy in 2023. Main street doesn't care if Powell pivots. It is concerned with inflation. Consumer demand won't decline as fast as expected, which puts to risk the Fed's plans.

tech Big-cap tech has the potential to grow earnings faster than industrials in a slow-growth economy. This is how she is anchoring her portfolio.

There will be an economic contraction--it's the only way to combat inflation. The trajectory must be down, heading forward. ISM manufacturing is contracting at a much higher level than previous recessions.

tech Mega-cap techs are defensive and worth investing in. But he wouldn't touch industrials like airlines, is suspicious of construction and machinery, and maybe logistics are defensive.

oil He's bullish oil and sees oil going back up. Oil is a hedge if things go wrong as Powell raises rates. You have to carry oil at an overweight of 10% in a portfolio, double the S&P.

REITs It's a stockpicker's market. Avoid retail and shopping centres. Look at industrial and warehouse REITs, a scarcity here and a scramble to build more capacity, though this space is getting pricey. Residential remains good, but offices no--too many vacancies.

Data tells him that since mid-June we've merely been in a a bear market rally. These are common in recessions, lasting 24 days average and generating gains of 18%. Example: the 2000-01 recession saw eight bear market rallies of 10% or more and the 2008-09 recession saw six of them. He's been using this rally to sell riskier securities and to bolster our three equity portfolios with high-quality, downturn-resilient names across a variety of sectors, emphasizing companies that cater to customers’ needs (not wants). This includes companies with strong balance sheets and companies with a history of market outperformance in bear markets.