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

ETFs for income. ZWB is a good ETF for income. Only 50% is used with the covered call, so you still have 50% for growth. The covered calls provide better income, somewhere around 5.5%. Though you don't get the tax benefit in a TFSA. The XSP is another good one.

ETFs for an RESP. Bought VGRO when it came out. Thought it was going to be great, but ended up selling it all and buying XSP instead. He found VGRO had too much Europe, and so the performance was nothing. He looks for broader based ETFs.

2019's broad-based rally impresses him, particularly the global nature of it with Europe making new highs. It feels different heading into past years. In 2020, the US dollar will struggle--Canadian investors are now very overweight the US dollar and US stocks, so they should reduce exposure heading into 2020, because he expects the US dollar to roll over. Meanwhile, the US deficit keeps growing. There's still good growth there, but they have expanded the deficit 5% to gain 2% economic growth. Investor sentiment is so bullish that we're not in an overbought market. Hold onto some cash for an opportunity in 2020--it's always great to buy when everything is negative. Shifts in sentiment can be big.

EQX-X / Gold Hard to examine a one-month chart for EQX; there's not enough history. So, looking at spot gold: the one-year chart shows a flag. Over three years, gold had trouble breaking $1,350. Now, gold in the past half-year shows a flag after a run-up earlier in 2019. Gold's outlook is good. Buy a gold ETF to be safe. Besides, gold, he also owns silver bullion.

A lot of the action in 2019 actually happened in the last 3-4 months and before that markets were mediocre. The large caps are a little overbought. It was a year of extremes--go big or go home. Massive losers were energy and oil, small caps and emerging markets. Massive gainers: tech, large caps. Small caps should do well in the first part of 2020. He's been buying into EM and dipping into gold and oil (but not cannabis). He expects a rotation out of large caps. Bonds are underloved, but it's time to consider them and pull some risk out of your portfolio. Canadian oil seems to be basing with stocks breaking their downtrends and starting to move up--but it's super-early and an unconfirmed trend. He's dipping his toe into the energy space for now and watching its progress. Same with precious metals. He's remaining fully invested and getting more defensive, but not bearish.

[A Show did not air today.]

Market. We are seeing something of a year-end melt-up in the markets. We have had a ten-year unprecedented run in the markets. What a decade! Valuations are stretched now. It's a pattern we saw in 1929 and in 2000 in the tech bubble. He thinks this trend is now focused more on the large caps. We have a narrowing market with a blow-off top. There is going to be payback for all for this when liquidity pumping stops. The global economy peaked out earlier in the year. Purchasing manager's indexes across the world are having a bit of a dead-cap bounce now. It is still a topping process in the global economy and will have an impact on stocks. We are due for a bear market.

Markets sold off today, but he won't make predictions--they're usually wrong. But if you need to change the structure of your portfolio, then do it now. With low interest rates, there's nowhere to go except stocks, especially tech and interest-sensitive ones. European stock indexes are actually up 23% this year, so don't avoid Europe. It's important to diversify across all sectors and areas....Cash in 2020: Nasdaq is trading over 30x multiple; tech now is like tech in 1998; don't go full bore into tech, but take some profits. Also, don't be 100% cash either; have cash in case markets fall. Markets are toppy.

How often should I rebalance my portfolio? He's not an active trader; since 2016, he rebalanced Shopify twice, Heico once, and Cognex once (i.e. selling half when a stock climbs high). That's it. Rebalances enhances returns long-term 1-2% annually that (compounded) adds up over time.

Gold strategy? First, what percentage do you want to invest in stocks, bonds, real estate, precious metal, currencies, etc? This determine how much gold you want to buy--a gold and silver stock or an ETF, for example. Don't just roll the dice on a gold stock. Consider your goals and investing style. Maybe allocate 5% of your portfolio in gold, like buy gold itself and store it away. ETFs mean you pay that MER, which is giving away a lot. More than 5% means more risk and volatility--can you handle that?

Leon Tuey, technical analyst, called the bottom in 2008, now predicts that there's much more to come with this current market. We're in the 6th inning. Some analysts are rotating into cyclicals like mining and energy. Copper should climb, for example. Tuey is an oil bull, targeting $93 for WTI which is huge for the Canadian market and will set new TSX highs. But this can impact inflation and raise interest rates. He's very positive for 2020 and beyond. Lumber bottomed in May, which will boost housing and real estate. Overall, because Canada is cyclical, Canada will outperform for the next 2-3 years.

Stocks aren’t that expensive relative to interest rates. If rates remain stable, and if there is no inflation, then it is positive. Low interest rates in Europe will probably continue too. The US will remain flat.

Trump’s tax cuts helped corporate earnings and prices. He thinks the impeachment could lead to more coverage and his popularity to rise.

There's a correction coming, though he's bullish 2020. Put some risk control in. Gold looks attractive. The toughest thing to do now is nothing. He's been bullish since October. The market's had a good run and needs a breather. Sentiment indicates a correction of 10%. If you have cash to deploy, then sit on your hands and wait. Sometime in January into February there should be a pullback.

[Berman's Call did not air today.]