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

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.

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.