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

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.

Economic data almost doesn’t matter anymore. The Bank of Canada doesn’t seem to be looking to cut rates. They probably won’t raise rates so the market will hang in.

A negative interest rate is a possibility in Canada, although it probably won’t happen in the short term.

Jobs data was fantastic, and the market is well. At the end of the day, stocks are holding. Right now, it’s a trader’s market and those looking long term aren’t getting a break.

Market. The recent ISM manufacturing report indicates a slowdown. There is a lot of uncertainty. It just takes slowing growth below the expectations of the market to give you a correction. You are seeing a flight to safety. Metal traders are taking a bearish look and getting insights from the orders they are receiving and books they are hedging. 85% of CFOs are now expecting a recession in the US in 2020-2021. You should be thinking about other asset classes beyond equities. There has been an expansion in the multiples, driven by lower interest rates. The bond guys are buying them but not selling equities yet. It is global growth that is slowing.

Looking for High Yield Bond ETF. High yield looks really calm in calm markets. When we get duress in the markets, then the bonds act like stocks, just when you don't want them to be. You have to balance the risks in your portfolio. He would suck it up on the low yield.

ETFs vs. Equities. ETFs re just an advancement in technology. To move between asset classes, you don’t have to make as many transactions. If you have a smaller portfolio you should make significant use of them.