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

Owning REITs vis a vis interest rates. Common misconception that rates are rising and you need to exit all of your REIT positions. In times of material rate hikes, US REITs have generated positive total returns 75% of the time, and outperformed the S&P 53% of the time. With Canadian REITs, since 2000 they've both generated positive total returns and outperformed the TSX 100% of the time. When rates are rising, you want to shorten your duration such as for apartments, hotels, and industrial. For long-term leases, you wouldn't be able to capture that growth in the economy. Thinks interest rates are going to be pretty low globally for quite some time, and for REITs that's good.

Northern Ireland property, residential and commercial? Concerned about northern Ireland, because of Brexit uncertainty. Prefers Dublin to Belfast. It's the booming city, especially for the tech sector. Dublin needs over 30K homes a year to keep up, and there's a significant shortage. So homebuilders are also a good bet.

Market Outlook It is difficult to sell all your stocks because you fear a trade war impact on the market. Don't move stocks into bonds as yields are too low. Diversification is key. Look for holdings with above average dividends. He still holds Apple and Alphabet. The FANG group has really taken it on the chin, but he will continue to hold. Apple employs 1.4 million people indirectly in China -- they are far from a massive restriction on them. The US election will take centre stage as Trump wants to focus on the success of the economy. At the end of the day he expects Trump would back away if it threatened US markets.

Current market turbulence. The equity shoe is beginning to drop. Bonds are really stretched in terms of this is the beginning of a recession, and assuming Fed rate cuts, but he doesn't see any evidence of that.

Concerned about the yield curve inverting? Not really. Used to be seen as an indicator of a recession. Fed is not over-tightening. Next best thing to negative yields is the US 10-year and so investors pile in, plus China trade, and so we get yield curve inversion. Probably not a sign of a recession in the next few months.

Concerned about retailers like Canada Goose getting pummeled in the markets? Stock lost a disproportionate amount of its valuation because of missed earnings. Market is supposed to be forward looking, while central banks are backward looking. Interesting that now the market is extremely bearish based on past experience.

Short sellers on Canadian banks. Loan loss provisions will grow. A very extreme position put forward by the short sellers on the banks. Far-fetched, and the numbers don't bear out the thesis.

How vicious will the US-China trade war get? It's already escalated. He agrees that it's brought the timetable for a recession that much closer. US could just put tariffs on everything coming in from China, which could backfire, impacting earnings like Walmart. Whereas China could dump a lot of US bonds, drive yields through the ceiling, and create a recession. Imposing export reductions is a nuclear tool that experts didn't think would happen.

Why did defensive utilities fall today when the market also went down? Market today had a risk-off sentiment. Doesn't always hold that when rates go down, my interest sensitive stock must always go up.

Arguably are looking at needing another correction. Revenues compared to last year are relatively flat. We are seeing a clear slow down in growth. So probabilities of correction seem to be increasing. Global growth is slow. We don't have China growing the way it used to. China was a driver to the global economy.

Diversification within a sector? It makes sense to diversify within a sector. There are different business within a sector, however, they are correlated. Should limit one's exposure to a sector. We do not have more that 25% in one sector and no more than 5% in any one name. It is also important to look outside of Canada.

REIT's vs owning real estate. Can access housing, commercial, industiral, senior housing through REITs. They are very liquid, so if sector changes and you want out, you can easily get out of the sector. Not as easy as owning real estate. Would not look at owning real property versus REITs as the same thing. They have very different risks and exposures.

high dividend names vs growing dividend names? There is a high correlation between raising dividend and share price going up. Generally you see a preference to companies that grow their dividends as opposed to high dividend names, is because you normally see share price appreciation as well in the names that continually grow their dividends

Market Outlook - The stock markets is quasi-ignoring the yield curve as the traditional signal (the 2-year to 10-year curve) is still not indicating a recession and paying more attention to the trade war. Going forward is going to be choppy but it will go up again. For Donald Trump the primary measure for him on how he is doing is the market. The bond market often signals trends before the stock market. Scotiabank missed but it was a very small in the big scheme of things. He is not worried. The rest of the banks exceeded expectations.

What is your view on Gold? - It has been flat for a year. A reserve in case Donald does something really stupid. There is a catalyst that he doesn't see for gold to go back to $1900 that was 6-7 years ago.