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

Seeking value without questioning the P/E. Important to also look at the macro-economic cycle. Recently, banks and US energy have started to move higher. But he asks where we are in the cycle. Those aren't your usual names to move higher at this point. You really want to look at sector and where we are in the cycle.

Canadian ETF that holds only big US tech companies? No, not one in Canadian dollars. There are NASDAQ 100 ETFs that hold tech as well as consumer services and biotech. BMO has ZNQ and ZQQ. Horizons has HXQ. And iShares has XQQ.

To hedge or not to hedge? For the last several years, you wouldn't have wanted to hedge against the US dollar. He still likes the US dollar over the CAD, and how firm the US economy looks at this stage. He still wants to hold in US dollars and have that exposure right now.

Canadian small/mid-caps are neglected and undervalued, and could be acquired by private equity, while ETFs inflate large caps. Also, some tech stocks like Uber are going public at ridiculous valuations--the bubble is now bursting with WeWork.

August was VERY volatile, but he stayed positive and that worked for him. He had a surprisingly good August. A lot of people are worried, but we're already talking about the issues that worry us, so we are sort of prepared. There's Trump twitter fatigue, meaning the market isn't reacting as strongly to his tweets. We haven't seen value names participate, and energy has been tough. Tech names like Shopify are down a lot this week. He expects a 25 basis point rate cut.

Market. Brexit: He sees the UK currency adjusted to be very attractive. He is looking at money going to Great Britain at this point. There are always rules and deadlines. It is a bit of a bees nest. As things weaken and get cheaper he is looking at adding exposure. EWU-T is large cap British stocks & EWUS-T is for small caps, which he is tilting to.

Canadian Banks in a negative rate environment. Dividends are safe in a big downturn but there is price risk. Look at the ZEB-T over the last few years. The banking group has not had any gains and this will get worse in a negative rate environment. We could see a 30-50% correction in banks if we go into a prolonged downturn. He would not plow into the banks just because the dividends are safe.

Educational Segment. Interest Rate Market Globally. Germany just issued a 30 year bond with a negative interest rate. It makes no sense unless you think the currency will be worth less in 30 years than now. QE may not get the positive results in the equity markets that we love. Fixed income is going to be the most challenging question for investors.

Market. He has gotten really cautious. Volatility is building up. Trade wars are affecting companies, and the whole investment climate is freezing up in terms of business investment. We have a crazy interest rate climate. The last thing we want is another financial crisis. This is a time investors need to be really cognizant of companies they are investing in. It will become a very value driven market.

Glorious time for the markets? It's a confusing time to say the least. Throw out the playbook. Negative interest rates change everything. There's both a bull and a bear market going on. Global trepidation, yet the S&P is 2% off its high. Rare to see gold rallying when US dollar is strong. Now with negative interest rates, gold is looking attractive. When all paper currencies are depreciating at the same time, gold makes sense. Bitcoin has more growth, but doesn't have the same acceptability.

Next week's Fed rate decision. Market is 96% expecting a 25 basis point cut. They won't go a half point. Economic data's weakening, but not slow enough to justify an aggressive move, and they can't just do nothing. Fed doesn't like to disappoint the market.

How long can the US carry the rest of the world? Already breaking down the US economy. Consumer is touted as strong, but it's the last area to break down. Business spending is down, and profits have rolled over. Then consumer confidence drops, and the cycle ends. Hard to gauge, as negative interest rates add a different dynamic.

Market Outlook He is expecting a recession within the first session of the next US Presidency. Trade pressures abound, Europe and Asia are already there. There is a lot of pain out there. Consumer staples have done well relatively speaking as consumers always need to purchase deodorant. The US tech giants represent a large percentage of the typical US ETF and their valuations are stretched. When Tech corrects it corrects by 50% -- he would not put extra capital in this space now. He does not hold gold as you need to hold 20% in your portfolio to be meaningful and you can go years where it does nothing.

Argentina? He has never made money investing in Argentina. There are some companies there, but the government is suspect ever since bonds were defaulted on a couple of decades ago. Investors there push their money offshore -- that does not bring good feelings in his mind. Don't put any money there.

We’re seeing the most long term volatility he’s ever seen. We’re back to the top for most of the exchanges. With rates at a low, the market will hold. Any sell offs should recover.