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

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.]

Market. We are extended in the short term. That is to be expected because we had a pretty good run. Put/Calls are showing complacency. We could expect a 1-5% correction, but how the pause manifests itself is always unique. It is a combination of price and time. The S&P has a nice trend, but we are at the top end of the channel it is in. The US$ is doing what it is expected to do. It is a pro-cyclical move underpinned by commodities. The bit of inflation we are getting is a good thing.

TSX. If you go back to 2007/8, we are up only about 2000 points. The US is a more growth oriented market. The trend we are seeing now, he thinks, is for real.

Market Outlook He has been buying less and selling more. For the portfolio, he has dropped holdings from 22 down to 12 -- not buying anything this year. He is playing defense by taking money off the table. He is definitely looking to sell.

Canadian Banks He owns Laurentian bank and is holding it for the dividends. In a recession, he expects the Canadian banking sector will get killed. He would likely move to holding the preferreds as he expects a recession by 2021 as it will be safer. You might do better looking into European banks that could create better capital appreciation and dividends. Taking some money off the table, early in the New Year, would make sense. He would be cautious about shorting any Canadian banks as you have to cover the dividends.

Mid-cap O&G? He is looking at a lot of mid-cap energy stocks right now. He is not racing to buy any right now as many have high levels of debt. Natural gas is undervalued, he thinks, but thinks fracing in the US could be a wildcard. Looking at energy now is a smart thing to do.

CDN dollar? Neither Canada nor the US has control over their deficits. Unemployment is at super low levels and the economies are doing well -- this is the time they should be paying down debt.