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

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.

Market. The market was looking for a reason to go down and that is what we are seeing this morning. His view is that stocks are expensive but there has been risk taking and speculative behavior. It has been driven by liquidity from central banks. It can be dangerous behavior. He still looks for good businesses that are cheap but he is taking a bit of a defensive approach right now. The market has been pricing in a Trump victory. He does not think a loss is priced in. The British are moving ahead with BREXIT. There is geopolitical risk. It is as if nobody is paying attention.

Oil. There are a lot of headwinds. It is not acting well in the way it is trading. A lot of investors are avoiding oil and gas stocks from an environmental perspective.

Sector Allocation for this year. Bonds are not a good proposition, equities are expensive, so there aren't a lot of cheap assets out there. He focuses on defensive businesses that are not priced at a high multiple.

How long can the coronavirus pain continue? He doesn't know, but usually these things don't have a big impact on markets, but there's a gap before doctor declare an emergency and investors sell. We're entering correction territory, with markets waiting for a sell-off, then the virus came along.....But troughs tend to hit in the gloomy third week of January (cold, dark). We could see more downside, though there are good deals in energy and base metals now, like copper. Oil chart: $50 is key with the downtrend over after finding a footing. Look at the producers like Suncor, Cenovus and XEG to know where oil is heading. For copper, seasonality is kicking in.

Market Outlook He thinks Q1 will only see a small global crude oil inventory build if OPEC cuts back 500,000 barrels per day (bpd) of production as promised. If current demand trends continue, this will lead to four of five consecutive quarters of global inventory draws beginning late in 2020. Current low prices are insufficient to lead to increases in production, it highlights the necessity to see higher oil prices. He is expecting WTI oil prices will rise towards $67-$82 by Q4 of this year. He thinks the latest development in the Coronavirus may led to lower oil prices initially -- perhaps a low near $50. Overall, he expects 2020 to average around $70 for WTI. This would translate to the Canadian energy index dropping back down to the lows seen last August (XEG-T equivalent trading back down to around $8.00)-- this will be a table pounding buy, he thinks. The time to buy will be during the next downward turn in the market.

US Shale Oil? He thinks the US production of 13 million bpd will rise, but not as high as other analysts (maybe only to 13.4 million bpd). The rig counts are 24% lower than a year ago, so he is conservative on production growth. Companies are working to spend less of the cash flow and improve their balance sheets and buying back shares.

The sentiment isn't great, but it's not any worse. Most of Canada is operating on Toronto and Southern Ontario. Calgary hasn't transitioned yet, but it will eventually because the infrastructure is good. It's one of the youngest, educated workforce. Highest median income is still the highest in Calgary.

The sell-off is because the market was looking for a reason to sell-off. It's been straight up since September. He doesn't think the sell-off is due to the coronavirus. China seems to be better prepared than when SARS happened. They can close down cities.

He still sees 2020 as still going up, though not as up as in 2019. He's bullish on a strong 2020.