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

Silver. Silver is a gold bug on meth. Some companies with a high exposure to silver sometimes see a premium. 50% of the demand is industrial, rather than speculative.

Gold's sell-off Friday, why? Some players with margin debt were speculating in gold, or had gold among other assets in leveraged portfolios. When margins calls hit, the sell decision is often made by the credit officer or margin clerk, not the investor. Also, gold is EXTREMELY liquid. Together, this encourages selling. He expects gold to do well if volatility is high--people buy gold out of fear. Also, gold reacts to people's faith in the purchasing power of the US dollar as expressed in the US 10-year treasury which already returns less than inflation.

Market Outlook The market was getting frothy heading into the Coronavirus outbreak. At that time any negative news made the market ripe for correction as it was priced for perfection. As the virus continues to spread, it is creating an outlook the global economy may be shut down for 3-6 months. He can't see now how anyone would have a positive opinion on earnings this year, so this is not unexpected. The Fed Reserve eased three time last year and now a 50 point basis cut is expected by the market over the next couple of quarters. As painful as this feels this week, they have been preparing for pullback and now they are taking advantage of the oversold nature of the market and are back in buying. Gold is expected to pullback to $1580 and if it holds at this Fibonacci level, he thinks that will be bullish for the commodity. This is a great buying opportunity for gold right now.

Market in long term correction? This market move is very different in that a Tweet is not going to solve this. What gets hurt in the market first are the very expensive shares -- trading at high multiples. Going to bonds is not a great strategy right now as inflation outstrips the yields on long term bonds -- you would be guaranteed to lose money. Fixed income is now screaming at capitulation (more risk of falling than continuing to rise).

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.