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

Real Estate? As interest rates are low, this is very positive for real estate. He thinks REITs are a good investment right now.

The market during the day saw lots of volatility, it went down in the morning. When the Fed's said it was stepping in, the markets recovered losses before the closing.

Looking at the 10 year yield, there is a possibility that yield can stay low. The bottom floor was busted, so there is more possible movement in that direction.

Market. Last week was surreal because we were not pricing in anything and it was surreal that we weren't pricing it in and now it seems it is way too much. You have to buy the dips and here we are. This will pass. The central banks have been very quiet here. They will want to see maximum pessimism and then there will be a coordinated move. 92% of people even if they get CO-Vid19 will be okay. Older people with respiratory issues are exceptions. He thinks CO-Vid-19 will result in clusters in the US. This is a very tradeable event. Buy half of your desired position and then laser buy the rest.

Which big oil do you like best? XOM-T is going to book value. He would buy some here. He thinks it will go to $47 and he would be a buyer here.

Gold. Bitcoin is taking quite a bit of market share. The rates of return in the gold group is non-existent. He is not putting substantial parts of his portfolios in it.

Markets. A wild ride this week. Over the last 40 years, there have been 23 corrections of 10% or more. It's not abnormal. Start to pick away and buy some bargains. We may take a pause, but the economy won't derail.

TSX closed because of a technical glitch. Not the first time it's happened, not the last. Volume caused the system to break down. It'll be back to normal. We have a bigger sandbox to play in south of the border. It's panic right now. Be fearful when others are greedy, and greedy when others are fearful.

Bargains - buy in now or wait for stabilization? When the VIX gets to the 40 level, that's when markets usually turn around. Not sure if the next 5% move will be up or down, but he's pretty sure the next 20% move will be up. Looking at things from a longer-term perspective, this is a good time to buy.

Coronavirus has jumped the pond, causing consumers to stay home. They'll just shop online. Outbreak procedures are a lot more orderly now. Judging by history, markets drop off, and then they go higher.

Where to position in all this uncertainty? Don't chase long bonds at this stage. He has bond ETFs. Don't chase gold. These are overbought asset classes. If you're looking to park cash, he recommends a short-term bond strategy, like BMO's ZST with a 2.1% yield. The ZST'L is even better, as you accumulate the units. Or PMNT, the Pimco global short-term. Don't bail on equities at this point.

Disconnect between gold and the miners and producers. Doesn't own gold miners or producers, as there are always issues. Gold is overbought. He doesn't own either.

Market Outlook He thinks today's move up is a relief rally. It is good news that the market has taken a pullback, he feels, thanks to the Coronavirus. Building a base is healthy. Getting defensive and raising cash makes sense right now. Longer term, 12 months out, he thinks this will be far past us. Use the cash to take advantage of buying value. The lower markets go, the higher the probability we get closer to the bottom, so stepping in in increments makes sense to him.

Not everyone is selling during this steep sell-off. Some are buying like him, albeit selectively. Not all companies will be impacted the same by the coronavirus. There are great compounders out there, but the pullback has reduced their valuations to reasonable levels. Central banks are awaiting more data before they decide on cutting rates. Also, banks have fewer bullets in their chambers, because rates are already low. He doesn't know how markets will play out, when markets will bounce back. But some great names got hit hard. Big names like Apple and now Microsoft (after hours) are guiding down. Every sector and company will be hit, but transportation will be effected the most, followed by energy. All companies will issue earnings warnings, though it's a matter of how much. The credit card companies are a good example. Cruiselines, airlines and hotels will be especially hit. In contrast, other companies like Microsoft will buyback shares during these dips.

Sell Canadian banks and buy American? Sit tight if you own Canadian banks. They're generating high-quality earnings and pay a nice 4-5% dividend. Doesn't know about transitioning into US banks, which he owns. He sees more value in Canadian banks. On a pullback, look at JPM or US Bank Corp. Canadian banks pay half their earnings in dividends, whereas the American ones return 100% (in dividends and share buybacks).