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

Continuum REIT IPO. This IPO should close in the middle of November. Really interesting opportunity. Most GTA-focused REIT. If you think the Toronto rental scene is hot, this is the best way to play it. Yield will be around 2%. Quality assets, good management.

What does Encana's being re-domiciled to the States mean for investors? It's concerning. Encana's explanation is more of a valuation call, so don't read too much into it. But oil stocks have been horrible, and people aren't stepping in because of our government. Still, Canada is one of the safest places to invest your money.

Market Outlook The Bank of Canada has left some room for further interest rate increases, despite keeping rates flat today. Western resources are hurting and they will have to deal with that eventually. If the US cuts rates, Canada will have higher rates than the US -- helping the Canadian dollar. This will hurt some Canadian company earnings, but we have come to live with currency in these ranges. Q3 earnings were pessimistic, but revenues have surprised along with earnings. 70% of reporting companies have beat their estimates thus far.

Canadian banks? It is not a bad time to buy. They have lagged, especially in Q3, but seem to be finding their stride. They have stable profits and good earnings trading at cheap PE ratios. TD has lagged, because of their Ameritrade share trade, when brokerages in the US went to zero commissions. He would still favour buying TD.

Cannabis? He is fortunate that they have not participated in the cannabis space over the past year. It is just too difficult to determine who will be the winners in this space just yet. A lot of companies will short on cash. ACB has a $200 million debenture coming due in March 2020, which will have to be refinanced as the strike price is well above current prices. Stay away from ACB. He would not buy anything in the space.

A big day today. Nobody expected Canada to cut rates, and everyone expected the U.S. to cut rates (but will pause). Both happened. And the markets lifted. Now, if the US and China don't get a trade deal and Brexit fails to happen, then the Fed could get negative like Japan and Germany are. As for the Canadian interest rate, he expects that we will close the gap between us and the U.S. given the Canadian economy.

2020 outlook It looks like we will avert the worst--a full-blown trade war between US and China. Neither wants to go into 2020 with very bad trade news. Trump has a lot to lose, because he wants to get re-elected in 2020. China doesn't want to roll the dice and face a Democratic president who may be tougher on trade.

The U.S. is doing better than we are, because Canada has a resource--and now, a gold--drag. Gold has pulled back recently like yesterday. Some TSX sectors are cheap. Financials are fine, for instance; Canadian banks do well in recessions as they manage risk well. So, you will do well with banks, long term though they haven't done well in the past 18 months due to flat rates and mortgage worries.

The street expects a 50-point cut tomorrow from the US Fed though a 25-point is more likely. An accommodative bank help assets. But abroad, things are less rosy, such as Germany where PMI (manufacturing) is contracting. The overall investing picture is confusing. A lot of investors, given their age, know only low or lowering interest rates. He believes U.S. rates will go lower as growth slows and companies become more profitable. If we see a growth shock, there will be lower PEs and big bear markets. Yes, stock prices are reaching all-time highs, but earnings are not. Be careful of over-confidence. Utilities and growth stocks make up a big portion of markets, like the S&P. Think about bonds. He's buying bonds. The returns may be low, like 3%, but they avoid drops on stock prices.

Preferred stock ETFs as interest rates decline Preferred stocks are like Jekyll and Hyde: they're rosy when markets are calm, but act like stocks, not fixed income, when markets go sideways. They're not a bad idea, but be careful with a preferred ETF. Many Canadian preferreds are rate-reset preferreds, so when rates go lower, their yields are reset lower. It's a tricky asset class. Be careful here. Not for the faint of heart. He prefers preferred that are perpetual, not rate-reset.

How do you decide which ETFs to buy? He likes ETFs because they grant access to markets you could not 20 years ago. What areas of the world are underexposed in most portfolios? And do you want a deep value ETF or something that tracks closely to an index like S&P? Market cap ETFs are the lowest cost. Low-vol ETFs are low risk, but higher-vol pays potentially better returns. How solid is the provider? Is the ETF active or passive?

Value-based ETFs VT-N is a global market-cap ETF, and VMOT-N is a very deep-value global ETF. VMOT can give you excess returns, but also massive tracking error. Buying value works. How much tracking error is there? Another deep value ETF is SBEA (grant manager). VT has outperformed VMOT hands-down VVL is another consideration; behaves like the benchmark.

A regular S&P ETF and one that's CAD-hedged? When you buy the S&P and don't hedge, you own both the S&P and US dollars. So, if each rises 5%, you're up 10%. But if you're hedged, then you're up only 5%. The opposite occurs if the US dollar falls.

Market. BREXIT delays: The can is getting kicked down the road but he thinks we are closer to resolution. It is part of the polarization that too many people want different things as an outcome. A third election in four years in the UK is a failure of government in his eyes. A big, high level, communist meeting in the communist party of China occurred and they want to notch up their leadership in the world from technology through to trade. Technology and the 5 G networks are key things. This is what the US trade war is all about. The market is excited about getting a really watered down deal as a sort of phase one of this. But there won't be any more progress on this unless Trump throws in. The US election 2020 is the biggest thing investors should be thinking about. The S&P is at an all time high and yet the fed is cutting rates so he can't get excited about it.

Canadian High Tech ETF, not currency hedged and using a covered call strategy recommendation. There is only one. He likes the strategy if you want to play technology in a defensive way. TXF-T is the ticker.