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

M&A in cannabis space. There has been lots of recent activity. Interesting, given that price performance this year hasn't been strong. The sector still looks more exciting than it ever has.

Markets on a sugar high? You could claim that almost every asset is in a bubble. The system is awash with cash. Economy needs a lot of momentum before the Fed and BoC start withdrawing liquidity. A 0% interest rate distorts asset prices and everything is going up aggressively.

Any stable place in the market? He tends to be more value based and looks for a consistent dividend. The energy patch is hated, but it has a yield, and profits and free cashflow are fantastic. The sector is ripe for a re-rating. Manufacturing and production costs were cut, and they now have a good profit margin with the cost of oil.

Bonds. Bond market is almost uninvestible, but you should allocate a portion of your portfolio to it. Focus on short corporate credit, under 3 years. No long credit securities. He also has a position in real return bonds. See his Top Picks today.

Sell banks to capture capital gain? The bigger question is what is your view on the banking sector. You always have to own some of the banks, as they're such a large part of the economy and the index. You need to compare tailwinds and headwinds. Bank earnings were, for the most part, just phenomenal. Tailwinds include Liberals' proposed tax and low interest rates. Cooling in the housing market would affect income from mortgages. As a sector, he thinks they've gone a long way so he's not that excited about them. He'd be cautious on financials.

Preferred shares. Hit hard last year. Doesn't love them, as there's a risk rates will go down. Problem is we're expecting rates to go up, with rate resets, but rates keep going down, with a chance they could go negative in the next couple of years. Indebtedness will slow the economy down, and there's a risk of recession. They are tax advantaged, but don't think of them as fixed income, as the fixed income part of your portfolio should not go down 30-40%. Better to look at perpetual preferreds instead.

USD outlook It is THE most important chart, especially when the Fed is in play. June 2014 into mid 2015 saw a 25% move in the USD and it destroyed some asset classes, though okay for equities. What will the USD when the Fed offers more direction? The USD is correlated with volatility.

Today's employment numbers showed August gains much lower than expected. On Sept. 6, the family stimulus money ends and this will greatly effect job creation numbers and will lead to the Fed tapering and a higher US dollar. Then, the multination companies will have a tougher time. If so, yields will rise and there will be a hard rotation into value out of growth/tech. In turn, the S&P will take a hit.

The USD outlook A high USD is a wrecking ball for multinational companies. A weaker USD is very inflationary. The USD is likely at the top of its range now.

Today's employment numbers showed August gains much lower than expected. Delta has had a bigger impact than we expect. As Covid declines, we will see job growth, then the Fed will taper. This won't be all terrible, but it will be a giant rotation of coming into value and out of growth stocks--and it will be an aggressive move.

Take a long-term view and don't get hung up on temporary bumps. It's hard to time the market, so avoid guessing tops and bottoms. Best to be fully invested at all times. He holds 4-8% cash in his cash, which as invested as he gets; this cash avoids selling something to buy something else. Over time, markets go up. Inflation is a bigger threat than central banks say. Costs are rising; there are shortages of materials and labour, and this won't end anytime soon. When the pandemic ends, demand will pick up and that in turn will feel inflation. By then, central banks will be behind the curve and inflation will get away from then. Financials, resource stocks and cyclicals will benefit from this scenario (see his top picks).

September outlook Markets had a hot August while the VIX slid. Smooth sailing? No. Banks offer hybrid growth + value, though yields have pulled back in recent days. With an OPEC+ meeting coming up, oil looks promising. He's cautious about positioning. The Nasdaq has outperformed the S&P by 8% in the last 3 months, so people are questioning where growth will be this fall.

After a strong August, what's your September outlook? She's long. If there's a correction, which won't shock her, she will ride it out, then look for things to buy. She won't trade around it.