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

The market before today's U.S. Fed announcement was down, then it bumped up. Everyone was expecting one rate hike for 2019, but the Fed today announced none, and only one in 2020. When the dust settled, the only negative was in banks--fundamentally this new is not great for the banks, because they need higher interest rates--the yield curve is flat. The stock market liked the Fed announcement today. Yes, global growth is slowing, but it is still growing. REITs, utilities and consumer discretionary did quite well today. The U.S. and Canadian 10-year bond spread has never been wider because the U.S. has massive budget deficits. The past six years have reversed the norm where Canada's interest rates are higher than America's. Canada is in good financial shape vs. the U.S. and predicts this outperformance for the next 12 months. This flies against common thinking. Also, oil is reaching for a new recent high while Canadian oil companies have reduced costs to be more efficient. The oil patch won't ramp up, but be stable. Overall, he's not negative Canada like so many. He's bullish.

Housing measure introduced in yesterday's federal budget designed to help first-time buyers. Ottawa spent two years slowing down the hot real estate market and now it's trying to reverse it in a targeted way. Why not let the market do its thing? It shows confusion. Real estate lobbyists are problem at work here.

Extended duration treasuries. These are 30-40-year treasuries, which were affordable last year, but expensive now. He'd hesistate buying them, because the U.S. government is creating a massive deficit, so any downturn will get passed onto any treasuries. He's far more bullish in Canadian debt than American. Also, he doesn't see inflation coming back. Too risky to buy. Avoid.

2,800 on the S&P has long been a resistance point and it's definitely blowing through. He started buying yesterday and will keep picking away, even though markets are a little overbought and many stocks are overvalued. He's picking up resources and materials, stocks that have fallen and are basing, not the stocks that are already rising. Can the S&P sustain 2,850? The market has finally cracked 2,850 after many attempts. It'll probably crack 2,900--and that will be pretty big. Though 2,900 will invite selling pressure, the S&P can continue to be bullish after that.

How do you use the RSI indicator? The RSI default is 14 days. You're looking at the speed of movement over a given time period. You want a stock to move up to achieve momentum. Like a baseball, a stock has a maximum acceleration before it slows and moves down. The time frame can vary depending on the type of trader you are.

The price of copper. He's been buying the base metals. Copper has stopped its downtrend, made a base and has just broken out. He bought upon the breakout. This could reach $3.50, certainly low-$3.

The budget was announced today. Apart from a measure to help Millennials (especially in hot markets like Toronto and Vancouver) buy their first home, the budget was market-neutral. Notley called the Alberta election for April 16. Surprisingly, she's done well to help Alberta during this oil crisis, and is likely calling the election now to take advantage of the high price of WCS. She could win. The China-US trade negotiations saw a hiccup late today and the market slid as a result. Hiccups are expected in negotiations.

The just-announced federal budget: $1.25 billion assistance from the CMHC to buy a first home. Millennials will be happy, but the assistance is creating only 25,000 new homeowners. On the deficit side, they had a bit of a windfall, so they will give it back to Canadians, which is what happens in an election year. Projected growth is 1.8% and 1.6% in 2020--these numbers will likely be wrong. We may have a recession in that time.

Market. It is rare that he focuses on Canada because it is 3% of the world, but a budget is important. Canada is underperforming dramatically so how governments invest tax dollars is important. Infrastructure is important and Trudeau has not been good at pipelines. Housing affordability is a big issue. He believes in stress tests to that any problem in an extended family does not put a home at risk. Punitive taxing helps cap escalating housing prices. Monetary policy has to be re-thought. Pushing interest rates to zero hurts the seniors/savers and helps the young people.

Real core inflation is when we have more money in our pockets and are willing to spend it. Right now we all wait for the sales. If they just started giving money to people for free the people would spend it and that would create inflation, but printing more money does not do it. Governments can't balance the books.

Gold. It is one of the bigger positions he has. It is less than 1% of the world and he has between 4 and 8% invested in it. $1350 to $1375 is where the resistance has been for years. It would take a big flight to safety for it to break out. He would sell into a rally.

Educational Segment. 12'th anniversary of his show. What was the return 12 years ago if someone bought the balanced Canadian market. The XBB-T had 3% return in bonds and 4% in stocks. After inflation it is 0 to 1 percent. He advocates for active investing.

Market. Feb 25th the market said it was too much too soon and so we are now in a consolidation correction. He thinks the US China trade dispute will be resolved. World indicators in 6 months should improve and there is about a year's worth of long term significant up moves in North American markets. Oil is trying hard to get above $60 and looks pretty good. He thinks gold will 'catch a bid'.

We're seeing a slow melt-up with supportive central banks, stimulus in China and the third year of a Presidential cycle of a President who wants high markets. Valuations are okay and earning expectations are at a low bar. Many de-risked in Q4 and are looking for a pullback to get back in, but are not seeing it, so we're grinding up slowly. We'll be up 3-5% more this year on the Dow and other indices and take out old highs. Decent gains from here....There's good and bad news for Facebook. Bad are the recent headline; the good is the move off their lows, their growth rates and pivoting from defence to offence last quarter. Their valuation is attractive. But any BIG stock is a target for politicians, like BIG pharma or BIG tech. That's a risk. But if you buy Facebook on a pullback, you'll be rewarded in 12-24 months. The Canadian budget tomorrow: likely not enough relief for oil and no lower taxes. There's growing talk about Canada becoming more competitive like the U.S.

Should a retail investor go 100% equities (with many dividends) and no bonds? This is fine IF you know yourself. Do you know what you'll do three years from now if your portfolio is down? Do this if don't need to sell stocks to finance your lifestyle. Many retail investors own 100% stocks. Also, it depends how much money you have at stake. Have a game plan and stick to it.