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

He targets the S&P at slightly above 5,100, the highest target on the street. He is optimistic about markets. That target is based on 4.5x adjusted book value, the peak valuation of the market in 2000, hitting that peak three times until the market declined. Meanwhile, extremely valued companies began tumbling, but the wider bear market didn't happened until 2001. This could happen again. The TSX is stunningly cheaper than the S&P based on book value. The TSX has quite a way to run, because the banks have huge upside. Bank earnings: At least two quarters will see those loan loss provisions will flow back into Canadian bank earnings, which will allow the banks to raise dividends, which had been frozen during the lockdown as a precaution. The bank stocks have done well, but well short of historic average highs (by valuation).

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The large amount of liquidity that was injected into the system due to the pandemic will probably cause higher inflation than previous years. However, hyperinflation is not expected. The best defense is to have asset class diversification. Commodity exposure, real return bonds and certain stocks should do well as well. Unlock Premium - Try 5i Free

Tech stock allocation in portfolio. Tech accounts for 21% in the global index. Tech will drive productivity and growth decades into the future. How you construct that will be different for everybody. A handful of large stocks accounts for a third of the S&P. They are huge influencers. For TSX, it is 11.6% tech. Shopify accounts for 7.2%. In Canada, we do not have a diverse sector. Must look globaly for tech stocks. Right now, it is expensive and at risk to rising interest rates. Could see underperformance in large cap tech.