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

How to process these whipsaw markets? Market narrative is quite negative. If coronavirus hits the US in a meaningful way, it will ultimately cause a recession. US is not as prepared as other countries are. Fed cutting is a really negative signal. Central bank policies are doing more damage than they need to.

BOC cutting rates and the housing market will go back to normal. Problem is the data does not hold up. Not sure what BOC was trying to achieve.

Where are you finding buys right now? Interesting spaces are certain portions of tech, medical technology. Oil is the perennial weak candidate. For energy, the preferred trade is outside of Canada. Some of the shipping names look good. Too early to buy airlines while there's still blood in the streets. The time to buy them is after any government bailout.

Strategy for putting money to work in this downturn. We're not in a bear market just yet. Narrative of the market is generally negative. High beta areas like shipping and technology are under pressure. If you're looking for opportunity, wait a little bit yet.

Sell technology gains? If you think the narrative's broken, take money off the table. You can always lighten up, and then go back and buy it later. It's never bad to take a gain, as you won't go bankrupt doing that.

Market Outlook The uncertain nature of the Coronavirus is causing uncertainty in the economic outlook. The most vivid resetting of the investment picture is the where the 10 year yield has gone -- below 1% for the first time. This will provide good support for good quality income paying securities. Interest rates could one day in the next decade drop below zero, he thinks.

Gold It is hard for a long term investor seeking dividend income to buy into gold. He thinks the longer term cut in Fed rates is more significant than the Coronavirus. You simply don't get paid to wait holding gold. Instead, he would buy dividend payers and get paid to wait.

If the US drops, should I hold a Canadian gold, not American, ETF? When gold goes up Don't worry about the currency. Gold will do well. At PDAC this week in Toronto, many gold companies have reported cutting costs while gold has risen above $1,600/ounce.

The cruiselines are suffering during the coronavirus. The long-term demographics will support this sector which will bounce back. But you need to wait for the virus to fade. Meanwhile, there will be cheap cruise deals for travellers.

After complacency, markets are now volatile. Markets were breaking new highs just two weeks ago as the coronavirus was spreading. Up 4, down 3, then the Fed rides to the rescue again. However, this is not financial--it's biological. The virus doesn't know what the Fed funds rate is. The Fed has cut too early and too large at 50 basis points. What happens if there are more ill effects from the coronavirus. Frankly, if you haven't taken some profits already, you should in this relief rally and now that we're out of correction territory again. Have diversification, like bonds. Rate cuts are unsustainable. Expect more inflation. It's destroying the business model of high street banks and insurers with bond yields below 1% or negative; they can't make their profit targets. This is dangerous long-term.

Copper has held up in this sell-off, though it's down 7.5% YTD. Chinese demand was hit last year during the trade war, but supplies have been adjusting. We won't see oversupply even if there's a drop in demand. Today's 0.5% rate cut from the U.S.: markets are down only 4% from their peak, and gold does well in a low rate environment. All the signs are there for an up move in gold, which should break through $1,700. WTI has shown more sensitivity than any commodity in this downturn. People aren't traveling, so gas usage is down. Though flights and cruises are cheap, but he wouldn't take a cruise now himself.

How are you processing recent trading sessions? Lots of excitement. Market was straight up for a while, and health news caused some concern. Market was looking for an excuse to sell off.

Today's Fed rate cut and subsequent market selloff. Just another data point. From a technical perspective, the selloff is concerning. Each piece of information is added to your analysis. The virus is having an impact, and the Fed is being proactive in case it causes a recession. It was the responsible thing to do and will help the economy. The next quarter or two could be a bit weak. By summer, we should have a better grip of what's going on and we should move forward again.

More people are staying home, but will the US and Canadian consumers continue to spend? Consumer confidence is important, and the Fed cut will help down the road. The bigger question is where will we be at 4 months from now. You have to focus on the value of a stock and where will it be in 12 months, not on what's the stock doing today. That way, you can find some great bargains. A stock is not a bargain if it's down 20% from being up 400% on no earnings.

Today's Fed rate cut a mistake? They're in a difficult position. They have to do what they think is right for the US economy. He's not going to second-guess that decision.