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

Top dividend-yielding companies. Canadian bank stocks have great dividends. If you want dividend growth plus earnings growth, look to US bank stocks for the next 2-3 years. With the strength of the CAD, those stocks are on sale for Canadians. Look at BAC, JPM, PNC, or Citi. In Canada, try KEY. Also APR.UN, a bit less liquid but with a yield of around 6.6%, good growth opportunities, very well managed, and a slow and steady player.

New twists to the markets. When you throw liquidity at the market, interesting aspects emerge. Enticing to follow, but a lot of this is just noise. The types of names he looks at are not too impacted.

Cyclicals still relevant? Estimates for inflation print tomorrow are ratcheting up. Cyclicals are still a big part of the recovery story. Commodities to industrials. Not too late to add some exposure to your portfolio, at least for the short term. Record commodity prices should flow through to corporate earnings. Some more secular, high growth names have sold off as a result, so he's been picking away at opportunities there. It's a barbell approach, getting into position for when there's a switch back to growth.

US tech stocks vs. value and yield stocks. You have to own the FANGs, as they generate so much cash. He'd absolutely choose a basket of those, which will generate returns in excess of GDP, rather than value names that are playing catch-up and likely won't exceed the expectations of the FANGs.

The CAD. CAD has been on a tear. Not inconceivable that oil and commodities will continue to rally, as inflation has been persistent. In that environment, the CAD will continue to outperform. If we get a miss on inflation, things could move the other way quite dramatically on both commodity prices and the CAD.

Utilities. Be cautious putting money into utilities right now, unless you need the income. As rates move higher, typically those stocks sell off. With the call on cyclicals, you might get some better opportunities to add to those names.

Prudence is a virtue--with your money. It never hurts to take a profit. Bulls and bears make money, but hogs (pigs) get slaughtered. That old saying may surprise some young investors. These are core beliefs.

The weakness of Tether and cryptocurrencies Many smart people point to a weakness in the crypto ecosystem: Tether. Tether has grown to become the third-biggest crypto. It's a key source of liquidity for the entire crypto ecosystem. It's pegged to the US dollar, accounting to 14% of all crypto trades in the past 24 hours. However, Tether's parent company has been banned to do business in New York state (where the NYSE is). Now, he is a huge believer in cryptos and he advises investing 5% of your portfolio in cryptos. He owns them. However, Tether claims to be backed by real assets--real currencies held in their reserves, according to their literature a few years ago, but more recently they changed that to include third-party sources. Meanwhile, they were investigated by the New York Attorney General in connection with their sister company, the Bitfinex trading platform. They settled this suit last February, and Tether has since explained (minimally) their sources of reserves. Only 3.87% of their reserves are cash, based on their recent one-page disclosure. He urges Tether to give investors more details behind this reserve breakdown. If there's ever a problem with their reserves, Tether can unravel quickly or if China shuts down their shadow crypto economy, or if the US authorities uncover further issues.

There's been a changing of the guard from tech last year to a strong cyclical rebound this year, led by oil and banks. Healthcare, utilities and energy infrastructure still show some growth. Wait for opportunity, given current high levels, like in Google and Microsoft, otherwise large tech are not buys now. If you own big tech, don't sell, but valuations have risen a lot. As for cash, he's near fully invested. He's not anxious to sell and move cash to the sidelines. Rather, he would recycle value, selling and buying selectively.

US bank outlook and asset risk Among US banks, there are money-center banks vs. the regionals, and he prefers the former. In terms of balance sheet risk or poor-quality risk assets, the US banks are in a good spot (as are the Canadian ones). The 2008 recession cleansed the balance sheet of all the banks' toxic assets that the banks accumulated for 20 years. So, there hasn't been enough time to accumulate toxic assets again, so their asset quality is very strong now. The big concern is valuation, so given this he prefers the Canadian banks, trading at 12x forward PE (vs. US money-center banks at 14x). The US economy is ahead in the reopening, so the US banks benefit. Banks in both countries offer value, but Canadian ones offer an edge.

Job numbers. US job numbers were weaker than expected. It's been a number of months that we are missing expectations. In Canada, we have had months of job losses. The US is doing better at reopening than Canada.

Global corporate tax. Ultimately, governments will have to extract more taxes from global companies. Covid relief has had an impact on governments. Taxes must go up. There will be push back, but this will happen. Many industrial companies have higher taxes already but it is the tax havens that will push back.

Gold. The inflation debate is raging and there are lots of factors to consider. Yellen said that Biden should go ahead with spending plan even if it sets off inflation. She wants higher rates as well, which will be important for markets.

Agricultural ETFs. Are people going to be permanently eating more staples or is the increased demand more transitory. The world is not eating more soy and wheat. There is a degree of speculation and labour struggles to produce output. Trend is spiky and would not look as a long term investment. Okay for traders but not for longer term.