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

He expects a vaccine sometime next year; the market is making a big bet that at least a treatment will emerge. This is a pretty fair bet. Governments have no choice but to pay people to stay home or else they'll riot in the streets. No one knows what will happen to the economy. He came into March holding 25-30% cash and spent half that, but was caught off-guard by the rally. So, he has sold some stocks to raise cash. He sold some of his cyclicals.

Sitting on a lot of cash. What to do? Start buying in underperforming areas, like Canadian banks and some consumer stocks. The banks offer good dividends. Insurance companies have also been beaten up and worth looking at. You can buy a little in these areas without undue risk.

Cryptocurrencies: will this be the future and completely replace cash? Only buy what you know. He's never gotten a satisfactory answer about the value of cryptos. So, he's steering clear of them. Every central bank now is printing money; world banks won't reset and aren't going anywhere.

A long-term bond or ETF in oil and not buying an oil stock Oil/gas bonds in Suncor or CNQ pay only 3%, or else you buy indebted oil companies that may not survive. He avoids commodity stocks. Oil needs to rise past $55 to really thrive. This could be a depressed industry for a while. Cash is a good idea.

Market. It is important to think about the market from the dynamics of inflation and growth. There is a part of the markets that doing exceptionally well and other parts that are not. Some of the market is really struggling. Tech stocks are really struggling. The tech economy has had a decade's worth of fast forward in the adoption of portability of work. Tech is a return OF your capital rather than a return ON your capital. Zoom is now worth more than the world's seven largest airlines. Some of the economy is booming and some is not ever going to make it back.

Gold and Silver ETFs. See his Top Picks today.

Market Outlook Earnings expectations have been revised downwards -- chopped by over 35% on the TSX. This is still going to be attractive relative to bond yields. He thinks gold could see further moves higher, perhaps over $2650. Canadian gold producers are reaping improved cash flows thanks to a weakening CAD exchange rate. He thinks low real interest rates will continue, making gold a good asset to hold going forward.

Market. LB-T cut their dividend, violating the sanctity of the Canadian Bank Dividend. Is there a possibility of others having to do this? Look at real estate. Banks set aside a record amount for loans going sour. People got mortgage deferrals. We can do that for a couple of months but not for ever. It is going to take quite a while for things to normalize. The vast majority of the loan books in Canada are syndicated and the banks don't have massive exposure but they do have exposure to lending. He thinks it will be for longer than the markets realize. Trump made his pronouncement about China and it was not as bad as some feared. He knows what to say and what not to say. As we get closer to the election he will get more brazen in his rhetoric about China. The markets are underestimating the importance of it.

Favourite Gold Stock. It is one of his favourite asset classes. He does not pick stocks out of the group. He would rather get the right theme. Play the sector with ZGD-T or XGD-T or GDX-N, GDXJ-N or ZJG-T, rather than a particular stock.

Hedging and how. If it is a taxable account it is more robust than in a registered account. You can use inverse ETFs but you would have to be half in cash. You could go to VBAL-T. It depends what kind of account you have.

There are going to be challenges to REITs and what he likes now is the apartment REIT. He would be patient.

Strip Bonds. You HAD the benefit of falling interest rates. He thinks you will have stagflation going forward. It will prevent bond yields going up so he could not stay with strips.

Educational Segment. V' Shaped Market Recovery. Fundamentally the risk factors are equity market valuations. Earnings estimates are too high for the S&P. The market is as expensive now as it was in 2000. Markets don’t bottom until we wash out expectations on earnings. There is a lot more to do on the downside before we can get bullish.

Market. He is cautious because market valuations have increased since the lows but earnings expectations have not kept pace. He is encouraged to see the stimulus from governments and central banks around the world. The markets are reacting positively to therapeutics, vaccines and they are making investors feel comfortable that we will get through the next couple of quarters. Also, there are reopenings over the last couple of weeks and that is encouraging people and keeping them hopeful. At these levels the market is really putting a bridge across Q2 and Q3 of this year and is looking into 2021 and putting a multiple of 18.5 on forecasted earnings which are from 2019. The market is saying 2021 will look a lot like 2019. Investors should be cautious over the summer. He is worried about the situation between China and the US, a cold war, and also the US election that is coming up.