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

Amazon earnings. Doing very well. Decent guidance. Very good numbers on earnings front. Some concern is expense of logistics for one-day Prime, etc. Great long-term story. Have to see what happens over next few days and weeks.

Visa earnings. He owns Visa and Mastercard. Secular digital shift still in progress. Expenses will increase in 2020. Macro risk is economy will slow down. Continues to like it. Be careful of where we are in the cycle. Looks as though we'll avoid a recession in the next year at the very least.

Is coronavirus the wild card? Upper end of the 10-year range of the S&P 500. Inflation and interest rates are still low. Pretty good start to earnings season. Difficult to determine impact of virus. Today, countries are more equipped to put a lid on what's happening. His guess is the economy and market will be OK, despite volatility.

Bond ETF for a retirement portfolio. XSB is a basket of mostly investment grade corporate bonds. 44 basis points expense ratio. For high-yield bonds, you want to own most US bonds. He owns XHY which is hedged to the CAD. Vanguard and BMO also both offer strategies.

BMO covered call ETFs. For covered calls, look at your thesis on the markets. If you think the market's going up, better to own the underlying securities. If the market's flat or going down, covered calls make sense. He prefers the securities. But if you twist his arm, it could make up a portion of your portfolio. The utilities ETF could make sense, global high dividend, US high dividend, or hedged Dow Jones.

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.