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

Caronavirus concerns? Copper and energy have been impacted the most. SARs had a 6% death rate, while Corona has a 2% rate. The situation to know more is better than with SARs. This is a concern, but it probably just a blip. Markets are getting used to huge news events and quickly discounting them. The question is, does this virus have a long last impact on demand the market? We should be concerned about this, but it seems less dangerous than SARs. The market is already showing relief.

Interest rates? There is a real dicotomy in the market today. We have global growth kind of recovering, while US and Canadian growth doing okay as well. The Central Banks are saying until we see inflation at 3% or higher, there will be no further interest rate hikes. This could make the US dollar very vulnerable. There are massive deficits on the US side ($1 trillion this year) and that could double. This requires the issue of ever increasing bonds. He begins to wonder if there will be enough buyers. His conviction on this is not high, yet. He thinks Canada is still on sale and still disregarded. Canada's deficit is relatively small compared to other G6 countries.

Laddered bonds or ETFs? The one benefit of holding a bond ETF, the MER has come down sharply -- 0.10%. Over the next 5 years he anticipates a liquidity crisis to come. The lack of liquidity when bond sell orders come in will negatively impact bond ETFs. You are never wrong laddering bonds in your portfolio. You are better off owning an ETF than a mutual fund -- due to the fees taken by the managers.

Covered call div ETFs? He does not follow a covered call strategy. You get hurt when the market rises. It is probably best for a flat market and maybe now would be good time to enter this. It is kind of a hedge.

The coronavirus hasn't been declared a pandemic yet. Markets have a history of overreacting to pandemics, but after past viruses have been declared a pandemic, markets tend to recover losses and move into the positive. We'll see if this happens this time. Don't react out of fear. He's ready to snatch up stocks that are oversold.

He's monitoring the coronavirus and how it will effect global stocks. It could be less severe than SARS, but could spread to more people. If it's contained to Asia, it will impact stocks that have business there, like casinos and airlines that operate there. The virus has yet to change anyone's earnings models, but it possibly could pull the stock market back 5-10%. The S&P could reach 3,500 with low interest rates this year, so a healthy correction now will let investors with cash to enter the market. Investors can expect high-single-digit returns in 2020. His strategy is to buy dividend-paying stocks.

The future of gold stocks with the impact of coronavirus. Gold is another safety haven in times of trouble, like now. Barrick, Agnico Eagle and FNV-T pay a dividend, and he'd recommend them, but he's never been a big holder of gold. Good to hold 10% gold in your portfolio as a hedge.

Companies are starting to talk about in the quarters. The numbers of cases and deaths remains quite low, but the world learned alot from SARS in 2003 in containing the outbreak. The virus is moving fast, but he feels it's contained. The market bounced back today, and maybe it's feeling it overreacted Monday. He's keeping an eye on the virus, and not worried yet....For Q4-2019 earnings, the estimates/expectations are quite low. We're not far above the five-year trend. There's more upside to come for 2020....He's invested in REITs, utilities and telcos, which benefit from low interest rates. He expects rates to remain low, unless inflation spikes. The BoC may even cut rates this year.

Outlooks of CAD and USD six months out. The loonie will move lower. Only two things will support CAD over USD: oil prices rise, Canadian interest rates go up while US rates go down. He doesn't see either happening, especially the latter. There's too much oil in the world and is on a downward trajectory.

Is there a fixed-income instrument that pays more than 2% in GICs and bonds? That's challenging. Everyone is searching for yield as rates are low. You can look at at corporate bond ETF; the lower the credit quality, the higher the yield. Instead, he's buying higher-yielding stocks which carry more risk. That said, there are stocks with low risk yet pay a decent yield, but still riskier than GICs and bonds. Look for a high-yield, low-risk ETF and endure the volatility. Also, preferred stock yield 4-7% or considered preferred ETFs.

Market. The big moves in the last couple of years in ETFs has been from passive investing styles to more active styles like ESG, Active ETFs, or long/short strategies. The Corona Virus: If you look at SARS and the market declines in 2002/2003 it was a different point than where we are now. They had a lot of market pessimism but now we are at all time highs in most places. It should be a much different impact. It will have a dent on GDP in China. Impeachment: There is a lot that is NOT priced into markets at this time. Interest Rates: The FED is not going to increase interest rates.

Gold Bullion, ETF or Trust - which is the best to buy. You could mix silver into it because you get more upside traction. He is almost indifferent. It is about market liquidity to him so GLD-Q is the best one.

When and how much of defensive positions do you re-deploy? When you deploy large sums of capital do you invest all at once? He recommends always scaling in gradually. It mostly has to do with your tolerance for risk as to when and how much you re-deploy defensive holdings.

Gold. It looks like we have the setup for a breakout in Gold. He is still bullish. Don't trim but he is not adding right now.

Educational Segment. ETF Conference in Florida. Inside ETFs 2020. There is the shift from passive investing to more active approaches. This year they awarded BTAL-N as ETF of the year. It has been around since 2011. It is market neutral. It is a long/short strategy. The long stocks pay higher than the short stocks. It has negative reactions to the markets. ZBTL-T is a Canadian ETF and ZPAY-T can both be combined with BTAL-US.