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

What is your favorite option strategy in this market environment? Anywhere where he can make money (laughs). the first thing to do is what options need to do for him. He likes covered calls because he wants to create tax efficient income. Some traders buying options to leverage their position. It is a good way to lose money. So you have to be careful. If he feels the market is overheated sometimes he buys puts.

Can you recommend a tax efficient ETF? On thing about ETFs is that if it is an index-based ETF is that the only time that you get a trade is when a stock is replaced on the index. So it is very tax efficient. If you don't need the income then you can look at the total return ETF of Horizon because they don't have distributions as they use swaps. There is a little bit of risk but they never had a problem and he doesn't see that probable.

Market Outlook She thinks US earnings met expectations for 15% growth over the year. Dove comments from the FED and improvement in trade relations has allowed for a 15+% recovery in US and Canadian markets since the lows in December. Going forward the market will again need earnings growth to continue rising. She does not see a recession on the horizon, given good employment numbers. The FED announced in early January that further interest rate increases will be driven by market dynamics -- which soothed market concerns that rates would increase regardless. Canadian growth will lag that of the US, because of rising interest rates here causing a cooling of the housing market.

2019 earnings were supposed to be up 8-10%, but investors' expectations have come down among fears of a global slowdown. This includes the U.S. economy. Yelp's data shows a slowdown in parts of the world (Yelp reported positively today). The U.S. created an unncessary fear in markets by raising interest rates late last year. America can't afford to go into recession, because rates are already low. He thinks the Fed won't do anything for a while. It's dicey now, and the wrong decision could tip the U.S. economy into recession. The Fed may even lower rates. Also, there are so many political issues, namely the US-China trade war. That said, he's bullish about 2019.

How to look at guidance when you invest Look at all the variables, like events in the world that cause periods of lower growth and lower numbers. He's concerned that the stock market plunged in December, then has since run back up, yet earnings have fallen a lot. There has to be a reset before you can buy the stock market again.

The markets won't return to last year's highs. He's cautious and conservative according to the metrics he's seen. A mix of negatives and positives. Bearish on commodity prices, but this actually benefits economies because interest rates will stay flat. This is a positive. Wait and see. If things slow down too much, it's a negative. But the sweet spot of low rates is also possible. US-China trade talks resolving will be very positive, removing market uncertainty.

It's excellent to see today's sharp move up. He was caught off-guard with how ferocious the sell-off was the last four months. There was a laundry list of worries. There needed to be a shake-out on valuation, like Netflix. This correction was simply a correction. We're still in a bull market and that was a blip. These bad bear market don't happen much, like 11 years ago. We'll see a little consolidation now, but we'll see a rip-roaring rally if US and China sign a trade deal. He's bullish and optimistic. He'd rather pick stocks than buy ETFs in this market.

If China and the US sign a trade agreement, what sectors here would benefit? Cars will skyrocket. Canadian financials, no.

The use of stop losses. They detatch you emotionally from a stock, so you don't cling to one. Stop losses are more art than science.

Sector allocation when the yield curve changes and the effect of U.S. interest rate moves on Canada. Canadians pay too much attention to American news so that we think that what happens there, happens here. No. Canada has its own problems, like high debt. Also, our economy relies so heavily on our banks. We see-saw between Western oil and Ontario manufacturing. Buy quality companies that buy a decent dividends, and be a contrarion.

Market. He is attending 'Inside ETFs', the largest ETF conference in the world. Active vs. passive is a trend being talked about there. The fastest growing area in the ETF space is the active management ETFs. China: We saw last week the market got up to important technical levels on the S&P. There were questionable comments about would we get a China deal done. The markets are hyper sensitive to this deal. Tax rates were high once upon a time for the wealthy. It did not have a detriment to the economy. We really need policies today to lift the bottom half. Taxing wealth is not the right solution, however.

ETF of ETFs. VCNS-T, VBAL-T, and VGRO-T are good examples. He would have a look at them.

Non-FANG tech stocks. IGV-A and FNX-N? There are lots of great tech ETFs. Those two are great but he prefers ITEQ-N. See his educational segment today.

Real Estate as an investment. He is not an expert but prices fluctuate for many reasons. Interest rates will stay low for decades to come. Regulations will curb a lot of the speculative nature of the market. He sees a cooling period. In a recession would see potentially a bigger hit.

TFSA Investment of a Tech Fund for new ventures. TDEC is a disruptive technologies ETF. There are a lot of great names and it has great long term potential.