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

How to take advantage of a recession? There has been a great run in the market. He would buy into an alternative offering that allows the manager to be long or short or to get an active manager. You need to be disciplined on your entry and exit levels. His minimum to get into his fund is $50k. He could suggest two ETFs: IGV-T and FTN-N. He thinks it is dangerous to get into a long only ETF at this stage of the cycle.

It's been a funny summer. Earnings growth is merely okay. The China-US rift picked up after some tweets. The growth picture overall hasn't changed. It's been tough to manage money. He's been buying REITs and utilities--more defensive-as interest rates trend lower. Globally, rates are going negative. It's not a fun environment if you hold high-beta stocks, but fine if you invest safely. The inverted yield curve is still an accurate indicator of a future recession. The market is pricing in a cut, so if Powell doesn't deliver, then there will be serious volatility at the end of the year. Interesting times.

Market Outlook An extremely volatile month with an average 1% intraday move during the month. Sentiment Trader reported the average is only 10 occurrences a month for this type of volatility. The Trade War is not likely to be settled soon and it is exacerbated by comments from the US President, he feels. Market sentiment is so poor presently. We should not head for the hills. Don't make any drastic moves in your portfolio, especially if you hold good quality companies. Bonds are up 20% this year. If interest rates go up when things stabilize, this could become very volatile as well.

Lack of stock splits? Stock splits are really non-consequential. They really were seen as a way to bring back investors and to allow some into the Indices. You will see fewer and fewer, especially now that trading commissions are so low.

Tweet wars President Trump tweeted how other companies take advantage of the US in the export markets. The tweet is being blamed, by the editor, for causing another almost 1% drop in intra-day trading for the S&P500. This should not be played out in the public social media arena, he thinks. Rates are lower in other countries as they deal with their own slowing economies. Investors should not get caught up in the rhetoric and do anything drastic if you already hold a high quality portfolio. This only creates noise and does not change the fundamentals of good companies.

Trump's tweeting is a bit of a nightmare. He attacked Jerome Powell today for not cutting rates more. But we've had a string of positive days including today. He remains optimistic about pockets of the market. The inverted yield curve, historically, leads to a recession. He's moving some stocks into fixed income and cash, some preferred shares, but he isn't exiting the market. He expects low rates for a long time. There's no inflation for the time being. And pockets of the market can do really well, namely REITs (he sold lifecos and banks to buy REITs); utilities will continue to do well; healthcare and consumer names; telcos. BNS's numbers were okay today, but BMO was not. He isn't worried about a market collapse, but volatility yes.

Replace a floating rate, preferred share ETF with a US treasury ETF? Yes, if you believe interest rates will go to zero. He believes rates are declining, but you don't need to go to a US treasury, but rather a corporate bond for more yield. He owns some of these rate-reset issues as a hedge that pays a 6-7% yield with safe credit quality and won't default. It all depends on the positioning of your portfolio and call on interest rates.

[Berman's Call was pre-empted by G7 Coverage]

Market. He is bullish on oil by year-end. The bottom was in Feb'16. He thinks we will head down below $50 because it is summer. A pull back will continue as inventory builds but then when winter creates demand, we will see inventories come down. Between now and October we could come down to create a great buying opportunity. Determine the names you want to own, determine the price you should buy at and then watch.

There isn't going to be a quick and easy resolution to the trade war, and some of it was already priced in. With another layer of tariffs, there is more uncertainty. This leads to more volatility, and that's why major indexes are down today.

Federal Reserve is more dovish, but the market is pricing in rate cuts, probably 2 - 3 more this year. The chairman is more dovish but Trump is starting to get frustrated with the lack of movement and putting more pressure.

The energy and mining sector is slowing down. More pessimism and people are more conservative, making less big business investment. The East is humming along, and the West is lagging a bit.

GIC vs Bonds. GICs are safer than bond funds. Bonds have more price fluctuation. Bond funds have been doing well, with interest rate going down. It's not normal for the bonds to perform so well. If yields keep going down, bond funds will continue to do well. GICs are the safest way to go.

The Dow Jones average is down today due to tariff concerns. We'll probably start seeing algorithms kick in and a higher volume. The volatility we're seeing is normal in this current environment.