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

Your asset allocation? He looks at all the companies in the world and positions towards those that will do well irrespective of who wins elections in the near future. He's looking to add companies that have overreacted to the downside, and is looking to reduce those companies that have less upside.

Risk of total lockdown again. You have to take the worst case scenario and see which ones will be profitable. Some businesses are benefiting from Covid, so you must figure out whether they will continue to be good investments even when Covid cases drop. He sees opportunities in both growth and value.

Are pipeline dividends in Canada vulnerable in the same way as in the US? The economics for the Canadian ones are much more sustainable. But you have to look at it case by case. Canada has limited capacity with long-term contracts in place.

Best way to invest in gold now? A safe haven. Uptick in gold prices earlier this year. Not a viable long-term investment. For the conservative investor, better to invest in companies that are cashflow positive and are growing nicely. Hard to predict price of gold. For gold, invest in ETFs, not individual companies. ETFs can be in bullion or miners, but bullion is safer.

Invest in NYSE or TSX? Keep in mind that performance of the overall markets doesn't reflect the performance of the individual companies. NYSE is heavily weighted to large cap tech. As well, you have the exchange rate. In Canada, we're influenced by financial services and the resource sector. A better way to think about it, is to look at individual companies and assess how they might perform under different market conditions. Opportunities in both Canada and US, though US has more choice. Don't buy the overall market; buy individual companies if you can.

Canadian banks. When you invest in the banking sector, you want to see organic growth in terms of loans. On capital market side, you want to see good and solid profitability. In this environment, the capital market side has done well. Organic loans have not done so well. Overall, Canadian banks are doing well on loan provisions. Sector is a hold right now. If you had to choose one, Royal Bank would be the one.

Don't you want to sell everything after today's brutal session which saw 3.5% losses? That's the problem: emotions. You can't trade based on emotion. Do not panic. Sure, it feels like the March bottom. A lockdown? Few states have the political will to do that, and can't afford to. Banks and oil are non-starting sectors, looking ahead. It leaves us with these bull markets: 5G, hygiene, home renos and cars.

Infrastructure for him includes data centres and indie renewable power like Boralex. Broad. He's worried that renewables have run up too far and valuations have run up, especially outside Canada where investors are paying for future growth. He still likes renewables long term, but is careful given these valuations.

Buy airlines and airports now with rumours of government aid. He wouldn't buy either. He doesn't invest based on government aid. What matters are the fundamentals to a business, and this industry is weak. The heart of this is long-haul international business travel, which he doesn't see happening for a while during the stay-at-home trend.

Market. There are several things that are worrying the market today. People want to see a US fiscal package and the COVID problem is a long term problem now. Seeing numbers for COVID going up in the US is adding stress to the markets. People are worried about the US polls. They are not sure who is going to win or what the consequences are. You want to stay away from cyclical stocks. You want those that have driven the economy recently. You will have better revenue growth and margins.

There's a lot of disappointment on stimulus. There were expectations of one being passed, but now it is clear we will not be getting one. There will be nothing before the election. We could see a small bill after the election passes. We will only see real stimulus in January or February. Markets are pricing in this, and lower earnings expectations.

The election could be far closer than the national pollsters predict. He believes we will see Supreme Court battles, especially in Pennsylvania. These threats have not been priced into the market.

Gold. It could break above the $2,000 level due to stimulus. Eventually, central banks will be creating stimulus by buying debt which ultimately creates reflation and lower interest rates. The feds will then accept higher inflation which leads to lower negative yields for the next year or two. Remains one of his favourite asset class.

Equities. We will get through Covid and a vaccine and other immunity will allow for the economy to open up for good. Part of the economy that can't fully open up right now is under valued and could be good for trading. Tech and others who are fully operational are fully priced right now.