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

Higher WTI oil? It's a manipulated market; the Saudis are trying to create higher oil prices. The days of $100 are long gone. $60-70 is fine.

He has taken a contrarian approach on the market. You can't solve problems with more debts. The strategies he has taken is starting to yield some nice returns. The stock picking is working. Central banks are stuck between a rock and a hard spot. As debt rises, he believes gold and gold producers are the place to be. He likes the gold producers. This is a massive opportunity. Need to position yourself as debt levels rise.

Outlook on owning silver He would allocate about 2-3 % of portfolio to silver. A number of good companies out there that will have massive leverage. Silver is looking to have a massive break. Will be better rewarded by owning the producers versus silver itself.

Thoughts on Preferred shares of banks? Rates are flat. For the cash flow, he would play convertibles, or high dividend stocks with upside. He does not want to watch the debt covenants of the banks. Unless you are willing to hold on really long term, he is not interested.

Market. The populous governments that are getting elected don’t care about environmental issues. Environmental issues are not a priority. We are caught in this loop where people are caught up in the short term economic impacts of the green movement and the short term risks of building a green economy. We are in the middle of one of the best bull markets in history and now is the time we should be investing in the future. We should be taking this long term approach. Green technologies don’t need government support any more. Batteries are the last remaining piece of the puzzle of technology prices coming down. All it will take now is time. Trains will wear out and we will have to invest in new technology. Canada is so well positioned to take advantage of this position.

ETFs for Clean Energy like PZD- and QCLN-. There aren't any on the renewable energy index in Canada. There is the renewable and clean energy index but it has not been turned into an ETF yet. There is a mutual fund – Mackenzie global environmental equity fund. You might buy the 'F' series for the lower fees. This is the best option in Canadian dollars right now.

Social Impact Bonds. These are not publicly traded securities. These are things like community bonds & green bonds. 'Co-power' is a private placement for energy efficiency projects yielding 5%. A social impact bond is a sub-set of bonds focusing on preventative measures. In Canada it is with the heart and stroke foundation where they partnered investors with preventative programs. It has been successful and represents huge savings. It is only available to accredited investors. It can be tricky to get them into an RRSP.

Market Outlook - 2019 has started as well as 2018 ended badly. Are we going back down? that is the question clients should be thinking. Bank of Canada will more than likely follow the Fed lead. There are multiple levels of uncertainty, but the about the rates increases is kind of removed. The Canadian unemployment rate is the best it has been in 30 years. Some investors are saying it has been too good for to long, then people start looking for reasons for a recession. His team doesn't see one coming. Real estate has been moving up for years at a 30% per year in key markets. Going up from here in RE would be a challenge even if interest rates go down.

Ottawa has just grounded the Boeing 737. He doesn't own Boeing, but he doesn't know how big this issue will be, so stay away. Avoid it. The grounding has a significant impact. The FAA hasn't grounded the 737 and makes the US another outlier on the world stage. Air Canada is under pressure today. Westjet could take a hit due to this grounding. The trickling down will cost both airlines money. They may have to lease planes from other companies. A big problem. Boeing's competitors have their own issues as well...He's pretty comfortable about the current markets. December 2018 was an aberration, a terrible decline that perplexed many people including him. We've since had a very good earnings season since, with 69% of S&P companies beating the street....China and the US seem to be moving towards a deal. He doesn't see a return to December's pullback. Market valuation is fair at 16x for the S&P.

The S&P 500 hit a new high with a quite a return year to date of 12 after a brutal December. The markets are fairly valued given earnings and inflation, though he's a little cautious. The global economy is slowing, including Canada's, and earnings have rolled over. In 2018, earnings were up over 20%, but he projects only 5-7%. But market valuations are better and interest rates are down. Things are okay, but he doesn't see much upside. He started 2019 holding 10% cash and slowly invested it in defensives in energy, insurance and consumer discretionary; he's usually fully invested. He's not a big tech investor. He looks for dividend growth, which is not FAANG. The Canadian banks are a core holding, instead. He expects them to perform better this year with dividend growth. Yes, he owns energy--three pipelines and four producers; all are modest holdings that pay dividends, including Suncor and CNQ. Companies can make decent money if WTI trades between $ - 65.

There are many concerns about the US and Canadian economies, but overseas as well with trade wars and Brexit. Because of the latter, he is tilting more to Canadian assets. ETFs can offer anything you can shake a stick at it because ETFs are so volatile yet charge low fees. The hawkish signals central banks were giving us at the end of last year quickly reversed this year. Don't trust these signals; central banks can reverse direction again.

UK rejects another Brexit proposal today which creates further uncertainty. She suspects the decision will just got pushed back more. She invests in US dollars outside Canada, so the UK pound doesn't effect her investments directly. Rosenberg warns of recession fears: the Canadian economy is certainly weaker than America's but Canada's employment numbers last week were very strong. Also, the US shutdown in December-January distorted their economic numbers. The US service sector remains strong and has rebounded from December. Also central banks around the world, including Canada's, are holding interest rates for now. We're heading into an election year, so policies may be tweaked to help our economy. The OECD is still projecting world growth--albeit it is slowing, and the UK is a weak spot.

Okay to buy Canadian telcos with stagnant interest rates? And the effect of Huawei on telcos? Canadian telcos are defensive income stocks, sensitive to interest rate moves. They tend to raise their yield every year by around 5%. These kinds of stock belong in a portfolio (she own utilities instead of telcos). The telcos have done well--they keep adding subscribers, perhaps because customers are buying more than one phone and immigrants are fuelling demand. BCE and Telus are exposed to Huawei equipment, but not at their cores. She doesn't prefer any of the telcos, which are in an oligopoly which won't change.

Market. Saudi Arabia is really serious about clamping down on supply but the US is looking to become the biggest energy producer in the world. You can't forecast in this area. The Euro central bank has come out with a very gloomy outlook. They are changing leadership this fall and the past/present leaders are of completely different viewpoints. This is toxic for the banks. DB-N is now lower than the 2008 lows of the financial crisis. Growth is not strong in the world and the only reason for growth in the last decade has been negative interest rates and a massive accumulation of debt in the world. Fiscal and monetary policies are NOT working.

Bonds vs. Canadian Bank Equities. The risk in bonds to stocks is night and day. We are late in the cycle. This is the longest expansion we have had in equity markets. Now is not the time to move from Bonds to Equities. He thinks bonds will do well next year. Interest rates will stay low for decades to come. After the next recession Canadian Banks will be a phenomenal buy.