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

Where to deploy cash right now? He runs a fundamental, go anywhere portfolio. Invests mainly in North America. Only invests internationally if it's an industry leader in a particular sector. The momentum trade will break sometime in the next year. Forgotten areas of the market which pose tremendous opportunities include energy. Energy consumption continues to increase every year, and oil should stabilize.

Is the new federal cabinet more western Canada friendly? Alberta is hurting. Oil is the biggest export this country has. Hopefully Trans Mountain expansion gets done. The federal government needs to support that industry, and it hasn't.

Canadian banks. Canadian banks have done well over the last 10 years. Stats show that Canadians are living on the edge, and bankruptcies may go up if there's a downturn. Banks are still safe, but you don't want to be overweight. Wouldn't hurt to take some profit, as there's some risk right now.

Market Outlook Many of the REITs out there have narrowed their discount towards their NAV. He sees power demographic factors fueling the apartment sector -- young professionals, many without cars, students, seniors and immigrants are all stimulating demand. There is a shortage of single family lots for new development.

Best REIT for Income? SIA is a $1.2 billion market cap and a 5.1% yield. The timing is good to buy as they had a soft quarter this transitory. They own 7000 long term care residents and 3200 retirement homes. They are well positioned in Ontario, where the government is struggling to incent more growth. It is probably worth $22-$23 per share.

US stocks continue to hit new highs. The market is comfortable now with the position the Fed is taking, and this has been years in the making. Economy showing signs it's going to skirt a recession, at least in the near term. Earnings are not going off the edge of a cliff, it's just a slowdown. But this whole expansion has been very tepid. Because of this, we should have a short and shallow recession. Investors have to be nimble to outperform indexes in this type of market. We're moving away from growth into value.

How long will the bull market continue? He reevaluates every morning for each of his holdings. Don't look too far down the road. Always good to have a healthy scepticism. You don't want to be too far over your skis.

President Trump signs bill supporting Hong Kong protestors. Market reaction? China won't like it. Could throw a wrench into the trade discussions. The trade agreement is a very shallow attempt at common ground. How China reacts will dictate how markets react. If there's a strong belief that this will sully the talks, it won't be constructive for the markets. This is only one event in many events. Trump needs a deal, and we might get a few days of weakness, but he still needs a deal.

We’re 10 years into an economic expansion and bull market. There is slowing global economic growth now. There’s been a run on equity prices while earnings haven’t risen as much. Therefore, valuation is quite high right now.

He isn’t calling for a recession, but valuation multiples are going up and risks for investors are up as well. He is more defensive, looking into consumer staples, dividend payers and those with strong balance sheets.

The rush of mergers and take overs recently is a positive sign for equities for organic growth. Interest rates are low so companies can get good financing. He has a number of companies in his portfolio that grows through mergers and acquisition. Organic growth is hard to come by since the economy is growing more slowly.

Markets. What a difference a year makes. Markets were collapsing, but he felt it was driven by macro, not fundamental, issues. No doubt about an upcoming Santa Claus rally. He's seen a lot of underperformance of active management as they held a lot of cash, so to catch up, look at the bellwethers like Microsoft and Apple. They'll probably stay strong till year's end. Russell 2000 has reached new highs, a positive signal. You want to see broad based participation. The January effect is another positive factor.

The Fed has provided a lot of liquidity. In 2018 4th quarter, 28 central banks were raising rates. Now there are 56 lowering rates. Very accommadative global policy. Also, Trump is really concerned with appearances and cares about how the Dow and the S&P are doing.

China announces intellectual property protection This is the critical part of the trade deal--great news. Bottom line though, Trump keeping tariffs on remains a big problem for the world economy. Meanwhile, markets keep marching higher; we're in a manic phase. No one knows where this could go. There's FOMO now. The combined market cap of Apple and Microsoft is twice the size of the US energy sector. This shows how mammoth these two corporations are, touching everyone's lives. There is concentration risk here, speaking to anti-trust issues. As for oil, it could be a value trap (though it will have rallies, especially if the TransMountain pipeline is built in Canada), because ESG is a growing force.

Will the CAD rise to 80 cents vs. USD? No, he never said that, though he added alot of USD exposure as the CAD rose to 77 cents. The CAD will likely fall to 70 cents in the next downturn as Canadian oil prices weaken. So, he'd buy ETFs that have USD exposure.