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

2022 sector outlook Concerned about Q1-2022. She predicts a rotation from growth into cyclical in 2022. Look outside the U.S. for cyclical exposure. Be ready to step in during pullbacks. She expects positive returns in 2022, but not as high as 2021.

Bank outlook Many positives, starting with loan growth demand from infrastructure spending mostly. Also, continued improving labour markets means more credit card use and home/mortgage demand, all good for banks. Meanwhile, stock trading will rise to help trading desks at the banks.

US interest rates There'll be more volatility in 2022 and the US 10-year will pass 2% without inverting the yield curve. The Fed did the right thing to raise rates. A wild card could be China will scare Taiwan after the Olympics. China could sell American paper to rattle American markets. He's fully invested now, but will pare positions in Q1-2022 to buy dips. Raising rates in the near term won't tamp down inflation.

2022 outlook and the U.S. Fed--will it be a wild card? Neither the 10-year nor the Fed fund will reach 2% in 2022. The Fed won't invert the yield curve for no reason. No way. Anytime the yield gets near 2%, there are trillions of dollars to buy those bonds--this is a problem. This demand for debt won't disappear. The inflation shocks are already subsiding. We'll make tons of semis and trucks next year. Wage pressures are sticky, but not worried, because the consumer drives 71% of the economy. The number-one risk in the U.S. economy The Fed is not a wild card, because the Fed has communicated its intentions.

Does not see recession on the horizon. Federal stimulus and pent up demand from supply chain issues will keep economy growing. However, stock valuations are at all time high. Tail wind of near 0% interest rates driving up valuations and laying groundwork for market correction. Does not see large (20% pullback) occurring, will be more along the lines of 10%.

Believes supply of copper is lower than demand. Copper prices should rise as a result.

Prediction for 2022. Continued volatility. Underlying economy has been fairly strong but we'll be comparing it to past strong performances, supply chain issues, Covid variants. All make it difficult for investors to figure out what's working and what's not.

Tempted to reduce equity weighting? Not yet. But we have seen rotation in terms of quality. Some of the smaller caps that he invests in haven't done very well this year. He has been looking at more defensive companies. Right now, he has a barbell approach in his portfolios.

Cannabis. Rough year in both Canada and the US. Not a lot of catalysts or uptrends. Canada supply/demand issue, with too much supply and not enough demand. In US, delay in legalization, so there was a selloff. Tax-loss selling has taken the sector down.

Lessons learned in 2021. Searching for quality and understanding your investment process. Easy for investors to get whipsawed out of positions, but at the same time markets were hitting new highs.

Year of the chip. Yes, and the other side of the coin saw SaaS really getting hurt. Quite the roller coaster. SaaS includes TWLO or MNDY, "smaller" cap, but their valuations got very stretched at the beginning of the year, and then pulled back as interest rates started to go up. Rising interest rates will contract the valuations for the smaller- to mid-cap companies. On the growth side, they're extremely strong. There's just a rationalization in the market, and it's not letting up.

Global payments sector. Global payments segment got caught up in supply chain issues as government fiscal stimulus started to roll off. PYPL is a gem, as is SQ, that has come off but is very profitable.

Outlook for 2022. There are some opportunities going into 2022. S&P is up 26-27% on the year. Epitome of growth, ARKK Innovation, is down 22%. Going into 2022, market volatility won't let up. 5-week streak of +/- 2% moves. That's amazing. The last time this happened was October 2011 and March 2009. It's nothing like those times, or even the dot.com bubble. But it's certainly volatile, and we're bound to have more going into 2022.

Project management software names. Go with ASAN, it's the cutting edge company out there for collaboration and work management. You could also look at SMAR or TEAM. These days, go with the larger companies. ASAN's market cap is only 13B, but it has heavy hitters at the top, and he has a 12-month price target of $103.40.