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

Market. Looking at the fair value of the market and the fundamentals points to making a new low. However, the government spending on supporting the covid recovery makes the question harder to answer. If we see the Fed back off from the QE bias, the markets are in trouble.

Gold. Real yield is changing. Interest rates don't keep going up and inflation is not going down. For the foreseeable future, he sees weak economic outlook, pressure on interest rates, and central banks wanting yield curve control. He sees zero competition from fixed income.

Educational segment. Geopolitical events are very important for him. The middle east has been a hot spot and the risk premium that is embedded is in the energy sector. If there is a real peace dividend coming to the Middle East, it will leak into the energy sector. We should start seeing it reflected in the price of oil.

Buy an ETF for gold exposure? The Canadian gold ETF is 20% Barrick and 20% Newmont, so you get 5 seniors and the rest are juniors. That's a fine strategy. You could also look for those that haven't moved yet. Argonaut Gold for example, up 9% today, is worth a look back at $2.50 or 2.60.

Invest in a financial conglomerate or in a pure play like a bank or lifeco? For the one that's left in Canada, Power Corp, it hasn't worked. He'd prefer Manulife to Great West Life for growth. And he'd prefer banks for growth. This is the one time investing in Power Corp would make some sense on a catch-up basis.

Views on the markets as we get close to record highs. Seems surprising that markets are near all-time highs while we have some of the worst economic data since the 1930s. What's driving such an aggressive move higher is the significant amount of central bank economic stimulus.

Are there still opportunities if you feel you've missed the rally? It's almost two different markets. You have the mega-tech, and then everything else in cyclical sectors. The opportunity is in cyclicals. You haven't missed the trade in stocks more injured by the pandemic such as industrials, consumer discretionary, and energy, which are more of a cyclical value trade. Tech stocks benefited from the stay at home stage. A "return to work" stock is one that will benefit once the economy gets back to normal life.

Why are you avoiding REITs and utilities for now? Is a stock reasonably priced and does it have an uptrend? These two sectors are weak on the uptrend, and they're still pretty expensive.

Energy and gold. Gold does best when there's a threat of deflation and currency devaluation. The last couple of days, energy has been working and gold has not. There's a fear of inflation. In the first time since 2016, he's only now adding to energy stocks on the services side and the producing side.

What impact if Trump bars Chinese companies from the US markets? Would impact specific stocks like Alibaba and Tencent, but institutional investors can trade on international markets. It's just sabre rattling, and not a huge issue.

Will consumer confidence ever recover? If you look at the US, even with its high unemployment, average income of the average American is actually and surprisingly up with all the stimulus. Consumer discretionary goods were flying off the shelves. But this could come to a grinding halt if money-printing stops or if we don't get a vaccine. The market is looking through all this to where it thinks we'll be 6 months from now.

Stock splits. We're in a market where a stock split magically moves the price higher, though this is not logical. It makes the stock more accessible to the small investor. If you can predict which stock will split, it may be a viable strategy to buy before. But don't buy a stock after a split when it's trading higher, as it tends to fade.

Indices are approaching record highs of February, but the economic conditions now are far different. Government programs are needed to offset double-digit unemployment and support the recovery. The market is looking through the pandemic and counting on a vaccine so that the economy returns to pre-pandemic levels, but that's still 12-18 months away. Tech stock valuations are getting ahead of themselves. Banks especially have lagged, which concerns her. The valuation gap between tech and banks (and industrials) is quite large. When banks and industrials join the rally, she'll find more comfort in the health of the economy. Canadian banks have conservatively put provisions in place, which protects them. You still need some exposure to the banks which pay 4-6% dividend yields which should be safe. The banks won't buy back stock, though. For sustainable dividends, look at utilities around 4% with cash flow growth to increase those dividends. See her top picks today.