A Comment -- General Comments From an Expert (A Commentary)
COMMENT
A strategy for using PHYS and TLT from the Top Picks. Buy both with USD. In his portfolio, he's put equal measures of PHYS and TLT. There's a time to be bullish on gold, and now's the time. There's something called a long volatility strategy. TLT and gold are the only 2 asset classes left that can play this strategy. If you have the two together, it eliminates all possibilities. If we have major deflation, gold will get hit, but TLT will go spectacularly up. Or vice versa, if we have hyper-inflation. It's a way to hedge in the macro space. Buy some popcorn, and see what happens. One of them will be substantially higher down the road.
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COMMENT
Markets and volatility. Fed has said it has to deal with inflation, whether it's 25 or 50 bps, and whether the world is growing and what that looks like over the next few months. But what's going on with Ukraine is putting a wrench in what the Fed needs to do. Ukraine will add volatility until we have some kind of peace or negotiation that reduces the bombing. Plus, the bond market says the world is slowing down. Fed needs to figure out if it deals with inflation or with growth. At today's upcoming 2 pm meeting, he's assuming rates will be raised 25 bps, not 50. The market really needs to know the direction of rates. Will the Fed do this through the normalization of moving the Fed funds rate up, through the balance sheet, or both? The market would have a tougher time if the Fed took a "wait and see" approach. Fed is usually really good at giving guidance.
COMMENT
Sectors with upside. Healthcare, healthcare technology, and technology. Financials will do well, not because of the yield curve, but because of their ability to increase dividends and buy back shares. In investing, volatility has to be your friend, though it's scary. Opportunity to buy great companies at good valuations. Step away from all the noise, look at the companies you own, and if you like them see if you want to add to them.
COMMENT
EV industry and China. Rules were relaxed for Chinese firms to list on the NYSE. Now the rules are changing, and China is reluctant to comply, since personal data and technology are accessible. Hard to compete with TSLA, as it's a beautifully designed computer on the road, and the company has already collected lots of driver data. The traditional car companies are in disarray as they try to mix combustion engines with EV. The valuation is another matter, but TSLA is the one you want to own.
COMMENT
Deploying cash when retired. You have to allocate your assets and take on some risk. Ask yourself how much money do you need to live your life? Put that in a bond, bond index, or GIC. Put the rest in dividend-paying stocks like banks and utilities or a dividend ETF that lets you grow your wealth and generate an income, without taking excessive risk in your portfolio. You draw on the fixed income portion because, as a general rule, it's not as volatile. You could even put it into GICs maturing over various periods of time. Don't use the equity portion as a bank account. If you're in your 70s, people can expect to live a lot longer and need income for that time.
COMMENT
COMMENT
Stocks are rallying for the second straight day. Have we bottomed? She wants to say the bottom is in, but doesn't see it...yet. Valuations are better and fine, but not compelling like March 2020 when she was buying at 2,700 on the S&P. Today, it's at 4,300. The market is still expensive. It could go down more. She doesn't see technology and growth stocks being the place to be, going forward, until inflation is under control.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Hard to say if the markets have capitulated. The VIX has not spiked as in other times of crisis. Much of the uncertainty is gone with Fed rate hikes, corporate earnings being positive and inflation seeing a possible slow down. The war is the only uncertainty. Sentiment was exceptionally negative, now you can spend some money that was on the sidelines. Unlock Premium - Try 5i Free
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COMMENT
Higher food and energy costs will erode growth and reduce consumer spending power. North American consumers can weather this better; our economies and jobs situations are currently good though. Europe is more vulnerable, given they rely on Russian energy. However, there will still be economic growth and she doesn't see a recession. We need to see how long this war goes. The jobs picture here is very strong. Hold quality and growth stocks, balanced and diverse, so you enjoy dividend increases to buffer rising interest rates. Look for strong balance sheets and pricing power.
COMMENT
Educational Segment. Looking at the Fed rate hike cycles, markets are typically higher following rate hikes and so there is generally less to worry about. In the 70s, there was stagflation. Doesn't think there will be a repeat of the 70s, but he is worried about the Fed's ability to correct the supply-demand inbalance. The best of globalization is probably in the rearview mirror now.
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