Market Commentary — Page 497

Market Commentary

COMMENT

If I have $2-3K to invest, what to buy? If you have under $10,000 to invest, then buy an S&P index fund. Makes sure it charges a low MER. (He didn't name a particular ETF.)

COMMENT

cap rate: For the last 2-3 years, the average cap rate in the US real estate was 5.5% vs. the 2.7% US treasury rate (3-year average). And now the latter has fallen to 90 basis points, so the cap rate is even more attractive. Apartments: The effect of record low interest rates is huge; financing rates for Canadian apartments in the last 6 months have fallen 100 basis points. Meanwhile, we're seeing record low cap rates in midtown Toronto. Retail: pre-Covid, e-commerce sales were already taking away from brick-and-mortar. Today, how can traditional retail survive? Be careful what retail REITs you buy. Office space: before Covid, businesses were already using less office space and will continue to be challenged even during the recovery. He sees less demand in the medium term.

N/A

Coronavirus vaccine. He's not surprised with the euphoric reaction to a promising coronavirus vaccine. He's surprised with the efficacy rate which is at 90%. It's a big breakthrough. There is some logistical challenges with distribution, but clearly it is great news. The stay at home stocks are selling off, and stocks beaten down are recovering.

N/A

U.S. Dollar Weakness. Overall, the combination of economic and fiscal policies globally should mean that the US dollar softens compared to the Euro and emerging market currency. The Canadian dollar has strengthened off improved energy prices. A sustained rally in Canadian dollar is not likely.

N/A

Importance of technical analysis. Both fundamentals and technical analysis are important. It's not one or the other. If valuation doesn't matter and you are trading chart patterns, it is the market for it. There is momentum and volatility.

COMMENT

Educational Segment. Gold remains one of his favourite sector. Looking at Barrick Gold, the median price target for the US fund is 34.52, which is around 30% upside. The reason they are not priced at higher valuation today is because of the gold price forecast. Gold remains attractive when thinking about central banks monetizing debt to keep interest rates low. The correlation between real yields and gold is very high. Some short-term volatility but a long term opportunity.

N/A

Market. He wrote that there was going to be a spectacular upside in the markets following an announcement of a COVID19 vaccine and then it happened the next morning. It is very positive and let's hope it works as well as Pfizer is saying. Hospitality, airlines and real-estate have been the most battered sectors from the pandemic. Anything can go wrong. When the airlines get going again it is going to be very positive for oil. He wants to look at it more carefully. He has never been a fan of gold. He is not a gold bug.

N/A

Bank covered calls when they go out of the money. It depends on what the banks are doing. If banks are falling he will buy back the call and sell closer. If it is rising, he will buy it back and ride the stock itself. You have to be very nimble and know what you are up to.

BUY

Total return ETFs work on the basis that there are no distributions being paid. To do the swaps they have to have counter parties. He does not see a lot of risk with the counter parties, however. He does not see a tax risk, or a counter party risk. Horizon have a good piece they can send to you on the structure of these ETFs.

N/A

Horizons Total return product vs. a Vanguard product. It is a case of whether you want taxable distributions or not. He tends to use Vanguard because most of his clients are older and want distributions.

SELL

Bond ETFs, Canada and US – Buy, Sell or Hold? When COVID came up he sold all of his bond ETFs and has not budged since. Now the returns are so meager that he is not buying them.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Markets look forward and the “stay at home” stocks will be vulnerable to profit taking. 5i recommends to not chase the big sector movers nor sell the prior winners right now. Gold is expected to bounce around since the insurance premium is less valued today. The Feds will probably continue to support stimulus and keeping rates low. Unlock Premium - Try 5i Free

COMMENT

Pfizer's vaccine news sent markets soaring today. However, the Nasdaq lost 1.53%. Sell REITs in offices and malls. Dump oil, because producers keep turning out volume whenever prices spike. Restaurants will see an uptick in 2021. Banks will earn more money as interest rates rise in the near future--sell into strength. Airlines of course will rise. Rails and industrials have had a good run, but are getting long in the tooth. Covid stocks like Peloton and Zoom Video will see multi-day sells, but we still need to get through this winter with Covid cases. Apple will do well under Biden, encouraging business with China. We would have rallied today anyway given certainty over the US vote. Covid names will continue to sell this week as the recovery ones continue to thrive.

COMMENT

The policies under Trump were affected by his mood, whereas with Biden you get more predictability. The markets are selling off today due to uncertainty. Looking forward, we could get a vaccine soon which is driving the markets too. A Biden presidency is probably better in the longer term.

COMMENT

Vaccine. The markets tend to be forward looking. There are over 230 vaccine candidates in production. News that there is a vaccine available would be very stimulating as this would allow for workers to get back into the office as well.

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We paraphrase the experts by hand, we watch the shows and write down what we understood from the experts’ comments. We are human and can make mistakes, help us fix any errors. If you see something that you know is not right or if there is a problem with the site, feel free to email us at : [email protected].

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

If I have $2-3K to invest, what to buy?(A Commentary)

cap rate:(A Commentary)

Coronavirus vaccine.(A Commentary)

U.S. Dollar Weakness.(A Commentary)

Importance of technical analysis.(A Commentary)

Educational Segment. (A Commentary)

Market. (A Commentary)

Bank covered calls when they go out of the money. (A Commentary)

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

Horizons Total return product vs. a Vanguard product. (A Commentary)

Bond ETFs, Canada and US – Buy, Sell or Hold? (A Commentary)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research.(A Commentary)

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

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

Vaccine.(A Commentary)

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