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

Price of gold? Broken above an important technical ceiling, so there's more upside. Holds 3-4% gold as a hedge against what else is happening in the other riskier assets in the portfolio.

Today's record high was a "melt-up." If it continues to go, then this melt-up will be driven by FOMO, rather than stock fundamentals. Likely, we'll see more interest rates cuts in the US of 25 basis points--but we don't need this. There's a ton of investment money out there already, so we don't need that cut. Potentially, trade tensions will ease. Nothing happened at the G20, really. The new NAFTA signing faces a 50/50 chance to complete, given the political turmoil in the States. He expects the China-US trade agreement might happen next year, yet maybe not. Trump has long been playing the trade card with his base, based on trade deficits--which aren't as bad as Trump is leading people to believe. Manufacturing has left the U.S., but the US economy is NOT manufacturing, but high-end service. He's dumbing down issues to play to his base.

Convert ETF bond funds to rate reset preferred shares? They reset the dividend at some point on the yield curve, maybe 1% above the 5-year rate on Canada bonds. The benefit is that if interest rates go up, they will raise their yields which will stabilize their price. They are being impacted by those resetting their rates today as interest rates decline. That's negative. Preferred are better than bonds only if the preferreds are good quality; preferreds pay a better yield and offer a tax advantage.

I'm 90 and love banks, but what happens to the money I invest in those banks. Should I stop investing? You buy a bank GIC that pays under 3% annually for 5 years or you can buy a bank stock that pays a higher yield, offers tax advantages and rises in share price. Which is better? Keep investing.

I'm concerned when funds keep issuing shares over time. Is there a risk of too many shares in a regular stock and the chance of a rollback? No. They are issuing more shares, likely for institutional investors. So they would buy more of the underlying product to support the ETF.

Market Outlook He likes to buy on the contrarian side, when things look really out of favour and sell when everyone gets excited. He needs to be patient sometimes, but he is also willing to cut losses. He will hold for years, especially if he receives dividends to wait. He thinks investors are not patient enough and that leaves them vulnerable to noise in the market. Active funds have been found to have poorer results than passive funds and the fees can kill you over time.

OPEC will extend cuts. OPEC did what they had to do. They can't increase production or else prices fall. If they decrease, then US shale is around for a lot longer. They are caught in a vicious cycle. Slower economic growth hurts oil, too. Christine Lagarde will head the ECB, just announced. She's intelligent and can run the ECB, but she's a lawyer, not an economist. Will she understand the details? Then, again, Powell is a lawyer too and seems to be doing well. Likely, she will keep rates low and maybe do a round of QE though several nations, especially Germany, want higher rates. Overall, lower rates will help stocks.

He looks for under-the-radar stocks that show (the potential for) outsized growth. One sector he follows is cannabis, which has pulled back a lot since April and suspects it is nearing the bottom, so he's starting to buy again.

Oil sector Canadian oil and gas have been in a very tough space for the past three years. If you own these stocks, don't sell them. Sentiment is depressed, so when that sentiment revives, these stocks will probably move up fast and suddenly.

What do you see out there? Little flourish right at the end of today, which was encouraging. Most gains in the first half came at end of first quarter. In the S&P, we're reaching a top again that we saw last year. We're either going to break out with the volume, or fall 5-10%. He'll be watching the markets carefully next week.

Meeting between Trump and Xi Jinping. People are feeling confident, because they were buying rather than selling off. We'll see how it goes. They're short-term effects in any event.

The earnings season about to start. Right now, it's a bit of a technical mark because we're at the peak. Instead of looking at the indexes, look at the underlying industries. Bottom up stock picking is more appropriate right now than buying or selling the market.

What do you do with all the Fed headlines? Monetary and fiscal policy affect the markets. There's a lot of momentum in the economy. Not concerned about big interest rate changes one way or the other right now. Canada might be more of a concern because the differential has a bigger impact on our dollar. Our low dollar has really been helping our economy. A fine line to tread in Canada on interest rates. Canada has never faced a housing bubble as they have in the US.

Can investors put their brains in park for the summer? You always have to pay attention. There are some big trading moves. Continue to diversify. Don't let one position ruin your day or your year.

Market. There is a tremendous amount of concern around trade, the economy, news flows and there is incredibly defensive positioning in the market. In 2018 we came in hot and the rate hikes cooled expectations and we discounted some slowdown in trade. The fear at the end of the year was really over done and it was a bull market correction. We are now facing some positive catalysts: A friendlier Fed. There are concerns built into the markets. Defensives are roughly twice as expensive as they have historically been. Cyclicals are cheaper than they have been since 1980. He does not know of a bull market that has ended with everybody defensive and sitting on the sidelines. The market has discounted a slowdown. The pain trade is that which hurts people the most. People are positioned too far in one direction. This market takes out these highs with any measure. The pain trade is what the market can do to people on the wrong side of the market. Defensives are pretty expensive. Railroads or semiconductors are trading high. The market is not telling you that you are heading into recession.