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

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.

Sell Canadian banks now, hold cash, then buy in the fall sell-off to buy the U.S. banks or utilities? Hard to predict where the market will go. He can't advise selling the Canadian banks. It's also too late to buy the utilities (bond proxies), because they're run up to record highs. A Canadian bank pays a good 4-5% dividend. Anyone who's held them for 20-30 years has done well.

We're at the end of the bull market. Valuations have peaked and earnings are flat...China does manipulate its currency to some extent...Powell calls the latest interest rate cut an "adjustment" which is an insurance policy, but time will tell if it works....He prefers the US over the Canadian market, because the American one is broader and Canadian is narrower....Most Canadian consumer stocks are actually international like Alimentation Couche-Tard.

The allegation of the Chinese government manipulating its currency China supports the Yuan by pegging it to an official rate. The only way to push it down is for investors to sell the Chinese Yuan and demand the US dollar. But Chinese has so many currency controls about converting, so there's no real free flow. Meanwhile, international participants are wary about betting against China's next currency move. China has huge reserves of USD and can buy up their own Yuan.

Gold outlook He's not a gold bug and he owns none. His issue is that gold often doesn't react the way it's supposed to, though it is currently (market uncertainty). Charts of 10- and 20-years show gold going up and down, so he'd rather buy dividend stocks.

Key sectors are starting to see a bottom, such as energy and pot stocks. Starting to see consolidation as well as companies that have failed. It's becoming difficult to compete.

Marijuana. Will start seeing more mergers and acquisitions starting in 2020. There are some hold backs by the state but he expects large multi-state and national operators to emerge.