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

Market. We had a list of concerns going into the new year. Trump is not the normal protocol and adds risk relative to norm and we are seeing it play out early in 2020. It is a low interest rate environment and so Mr. Bushell likes dividends. There is no impetus to inflation. You want to be overweight equities. Typically banks don’t underperform for two years in a row, although he thinks that will become more common in the future.

He doesn't follow geopolitics, though he has personal concerns about Iran. Point is, it's noise and it's not a factor in his investing. Gold does well in times of perceived and real war. Gold has had a strong day. His market concern is systemic. The Shiller PE Ratio: PE today is the same as before the market crashed in 1929. The market is frothy, 30% overvalued in Canada, and 50% in America--way above historic averages. "Irrational confidence" explains the current market which is expensive. There's real risk here.

A protection strategy assuming a 20% correction before spring? Things can get ugly before they get profit. First, take profits after a fantastic 2019, then reposition your stocks/bonds ratio, buying more bonds to make your target mix (i.e. 70/30 stocks/bonds). Himself, he's moving a third of his equities into inverse products--like an ETF that rises when markets fall (see his top picks). Investors really feel the pain of a drawdown--people are emotional and irrational. So, probably in the next two years, the market will fall and an inverse product will go up. This is playing defence.

Cannabis stocks already corrected, but you say markets are 30-50% overvalued. So, what'll happen to weed stocks? If the market drops 20%, few stocks/sectors will survive that (most will fall 20%) and cannabis likely will too. It's still early innings for cannabis.

Are bonds better than GICs in terms of income? Bonds come in various forms and geographies vs. GICs are plain vanilla. The main difference is liquidity. To take advantage of a pullback, you can't sell a GIC to suddenly buy, but you can with bonds.

Are renewables or healthcare defensive? Both are more defensive than the overall market, so yes. Renewable energy is the biggest mega-trend of our generation. Probably good to stay in these stocks.

Selling a condo for $400K, and my pensions would cover the cost of me going into a seniors' home. Where would I put the $400K till needed? Sounds like you don't need that $400K. So, this is money you could give your kids and grandkids, which is an important decision to make. Make sure you can cover your costs and you're finished travelling. You can invest this money, being a little aggressive, to benefit your kids.

Maxed out his portfolio which is nothing but ETFs, including 40% ZWU, ZWE and ZWS--all covered call ETFs. Am I giving up too much growth? Plus, what ETFs to buy for Asia? Yes, you gave up some returns in 2019, because of the covered calls. But in 2020 you need to play defense, so hang onto those ETFs. Covered calls are defensive. Asia: India is getting expensive, so don't invest there now.

Holding US stocks in a TFSA? No. The US government charges a 15% withholding tax. Instead, buy a Canadian-domiciled ETF that holds American stocks.

Do a put option on a silver ETF to capture more momentum? No. This is purely speculation. Gold has done very well, and so has silver. You can invest in silver as a proxy for gold.

I'm up 40% in stocks and can afford to lose 20% in a bear market. I hold only stocks. But I'm afraid to make money in lower-yielding bonds, though they're safer. What to do? First, rebalance your portfolio from 100% stocks, by taking some profits and put that money into bonds. If you're conservative, you can adjust say 75/25 stocks/bonds into 70/30. That makes you a little more defensive. Also consider an inverse product--when markets go up, this inverse product goes down--which is a pure defensive play when markets drop.

Market Outlook He thinks everyone is of the belief the market will not be another 20% gain next year. Only twice since WWII, when the market had a gain of 20% in a year has the following year been down. In fact, it has averaged a 9% gain. He would be happy with a 4-5% return this year, plus returns on dividends. 2021 could be another story, following the US elections and other geopolitical events. The US attack in Baghdad on a high ranking Iranian official has resulted in oil and gold rallying. The US Administration has warned US citizens to leave the region to avoid repercussions. We will have to wait and see how things play out. Phase II of a Chinese deal is required for President Trump to be able to influence a market rally. He feels multiples on earnings were stretched in 2019 and there is still some value out there, but it is causing him to become nervous about tightening following the US Presidential election in 2020. This could be led by a market sell off going into the election.

Alberta curtailment impact on differentials? The Alberta government is trying to help smaller producers with the regulated curtailments. It costs $12/bbl to rail barrels to the US gulf coast. He thinks the differential should trade between $12-$18 per barrel. He believes the Alberta government will continue the strategy to avoid the differential reaching $23 or more.

He's expecting a bullish 2020. With high-tech stocks, you could have made around 3-%-40% return for 2019. The results aligns with technical analysis. The economy is doing quite well. There are geopolitical events that flairs up now and then. However, S&P500 is still doing fine.