A Comment -- General Comments From an Expert (A Commentary)
BUY
Gold ETFs. Will be covered in past picks. Investors buy gold for uncertainty. With the vaccine coming along and uncertainty dropping we are seeing a shift into the inflationary trade. This is a buying opportunity. Most investors don’t have enough gold in their portfolios. Gold ETFs are viable options. They should be in your portfolios.
BUY
Health Sciences ETF. If you are focused more on the idea of something vaccine related, look at IBB-Q. Biotech is where you will see that type of technology manifest. XHC-T is currency hedged, if you want that now. It is quite diverse. LIFE-T has covered writes, which do well in a slightly flat or slightly up market.
PAST TOP PICK
(A Top Pick Mar 25/20, Up 0%)US $. It could have turned into a safe heaven. The dollar is the primary determinant of many asset classes. Its weakness has create strength in a lot of the commodity complex. He thinks this will continue and things that are resource and commodity based will probably have a bit of a run here.
BUY
Recommendation for a total [global] market ETF, low cost. Consider taxation issues. On a total return ETF you might buy a combination of horizons ETFs so you would not lose the dividend tax credit. HXDM-T and HXEM-T and HXS-T would round it out and avoid any distributions. In your TFSA or RRSP you can use the VXC-T, which excludes Canada.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Earnings have been quite good this year and companies have been showing decent growth. A recovery is expected next year although some sectors are getting a little too hot. Consumer discretionary and industrials should outperform. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
He's focused on the recovery stocks as vaccines pick up and the economy recovers. The stock market looks forward, so he wants companies that will do well when vaccines roll out globally next year. Those companies may not be the same ones which led the market after the March 2020 bottom. In recent years, being a passive investor in ETFs or index funds worked, but not now. Namely, tech stocks now occupy 25% of the S&P while other stocks have lagged, but it's starting to change. Now, the cyclicals and interest-rate sensitive stocks will improve, and will really benefit the TSX. He expects the Dow to outpace the S&P and Nasdaq in 2021 as things normalize.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. - The recommendation in terms of holding cash is to have enough to sleep at night. The markets have a lot of different forces affecting it, like a Biden victory, vaccines, good earnings, and low interest rates. Some sectors look to be in a bubble, like electric vehicles. 5i is generally not worried about a giant correction. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Good time to buy in to real estate? Yes, it's one of the most compelling choices today. Combination of low interest rates, low inflation, low growth, and growing demand for tax-efficient income. In 2020, a number of distributions have been reduced, while many in the real estate sector have increased theirs. But you have to be selective.
COMMENT
Cloud over office and retail REITs? Retail was struggling before Covid, and the pandemic just accelerated that. Especially those who didn't have a superior e-commerce presence. Going into the holiday season, lockdowns will be challenging on the bricks and mortar retail locations. Vaccine is a light at the end of the tunnel, but she's still really cautious on retail. Structural challenges remain with over supply. There will continue to be a need for some office space, but flexibility is needed, and how does that translate into office requirements? Next two years will be net negative returns.
COMMENT
Best idea for REIT investing right now? An ETF like XRE combines the good, the bad, and the ugly with different sectors and growth profiles. Look for companies that generate strong, recurring cashflow and grow distributions. Industrials have significant tailwinds for the next few years. Also apartments, which are trading at a discount to NAV, as people still need somewhere to live.
COMMENT
Any chance of office space being converted to condos? Potential, but it's significantly expensive to do this. First would be hotels. There has to be a clear conviction of future rent growth to take on that risk and invest that capital. Demand for office space will continue to be net negative over the near term.
COMMENT
Hard to find great companies at low prices these days? Have to put it into context. Bond yields going lower, interest rates low. Bonds are even more expensive, and cash is earning nothing. The best businesses in the world should trade at high valuations. You're paying up for strong cash flows and stability. If they continue to compound capital, you should do very well with less stress. He and his clients want to sleep at night.
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