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

Long-term view if a recession hits. You'll be okay long term. Don't do anything...unless you capitulate at the worst time at the bottom of a bear market. Have a 60/40 or 70/30 allocation in stocks/bonds or cash. Understand this before it happens, so you are strong and ready. As for bonds: you can lose a lot buying bonds now.

How to use the PEG ratio? If BCE trades at 15x and the growth rate is 15%, then the PEG is 1. Less than 1 is better. Those are the basics.

The US announcement of delays in tariffs to December instead of September is driving the market higher today. This shows it has been a real concern for the market. The other factor is interest rates. She does not expect tariffs to be lifted in their entirety, just that no new tariffs will be introduced. Business spending has been slowing because they are not sure what the trade picture would be. Corporate profits in Q2 grew by 2% when expectations were for declines. She is not proactively raising cash. They are taking some profits though.

Recession proofing? The first step is to make sure about your asset allocation of stocks vs bonds. Historically, stocks have always recovered back to new highs. If you have to draw from your portfolio, it is best to sell prior to a market sell off. Stocks should be ones with good yields that will protect you when a stock market fall occurs. Growth stocks would be hurt hardest in an economic downturn. Don't overpay buying in late in the cycle.

The markets reacted positively after Trump's announcement this morning about scaling back China tariffs. 2,946 is his S&P target. If so, then "game on" to 3,100 in mid-September. A new 4-year cycle is under way. Market sentiment last Thursday revealed very high bearish attitudes that hadn't been seen since March 2018 and December 2018. He also looked at the put-call ratio, which saw elevated put levels, which means investors are scared that markets will go lower. The market is trying to form an intermediate low, and he feels the market will go higher. He's not defensive now. His longer-term bias as to the upside to 2021. Closing at 2,946 tells him we're off to the races.

The Dow Index's direction He still likes it, a bellwether chart he looks at everyday. In 2015-16 and 2011-12 it was muddling, but when it breaks out it moves higher. He expects further upside into 2021.

The S&P since 1993 Sicne 1993, it had an uptrend, then went sideways, then for over a decade a steady climb. This reflects human progress in, say, computers. So, the long-term trend in his eyes is up.

Market. Trump has accused China of currency manipulation. China is moving toward a free floating currency. The 7% level on the Chinese US is a big Psychological point. He thinks we are slowly going to go up. It will stress financial markets a little. This is a big factor in the commodity sector but he would not focus on it. China has been slowing for almost 15 years now. The trade deal with the US is what matters. The S&P has no business being where it is right now. We should get a re-test of the December lows later this year. His geopolitical risk monitor has never been higher. He is concerned.

ETF for parking US, Canadian and Australian $ to be used at short notice. With interest rates as low as they are you are not going to get a low risk yield and take it in. In the high yield space there are some options but they have equity-like risk. Putting CAD$ in a foreign currency, it is attractive to hold US$. The DLR-T gives you a money market type yield. FXA is the Australian dollar ETF.

Top 4 ETFs when a correction starts, with a 15 year time horizon to retirement. You need a core position in the S&P. It is 40% of the world equity markets. He likes technology and cyber security and emerging market technology. EMQQ is like a NASDAQ exposure. ITEQ is Israel Technology. Put small amounts in these areas. Underweight Canada. Wait until we have dropped 25% before moving into these. We will get to 40% in the upcoming correction.

Educational Segment. Gold with negative interest rates. Gold with negative interest rates. Gold is an attractive asset class. GDX-N is an example. Gold peaked out at US$1900 in 2011 and there will be a lot of resistance at $1525. He thinks we have a date with gold at $1900 again. It's at a 35 year low and is a no-brainer. He thinks this ETF could double.

Oil. Thumbs down before it goes materially higher. We are going down into the $30s in the next recession.

Market. He is not concerned about the markets being off so much. This happens every August. You have trading desks lightly staffed and staffed by younger people who have trigger fingers. We have the dog days of summer right now. He expects that we are in a correction right now. Events always have an out-sized impact in August. The Yuan was a big deal. He always has a problem with them deciding to set their own rate. We have some leg room on the DOW for it to come down before getting nervous. The US 10 year yield has dropped. We are working through things.

Lots to worry about, starting with US-China trade tension. The market is worrying about it again, making it hard to trade day to day because you never know what Trump will tweet. He expects a deal to be reached at some point. Bonds are not attractive now because of low yields while high-dividend stocks are, especially those with potential to grow in the coming 10 years. He always holds some defence: this year he has been accumulating cash to 15% levels (which is high for him). He's also buying gold through ETFs (he's not a mining expert). He also has some short positions. He prefers gold to silver; he doesn't have a price target. Gold is a hedge to volatility.

Canadian vs. American banks in the coming 6-12 months It's out of favour. He prefers American banks, but the Canadian ones offer good value. Bad press about the housing market and shorting by some investors hasn't helped, but our lending rates are still low and the banks' trading multiples are still healthy. Since they're out of favour, now's the time to consider.