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

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.

How long should you watch a new ETF until it gets to an appropriate level of liquidity before buying? The key thing is the viability of the fund. Usually within a year if the fund does not have $30-50 Million in assets than it won't be making a lot of money. BMo does not have that concern. When new ETFs come out, they have lots of runway. Usually ETFs have the liquidity of the underlying holdings.

Educational Segment. The Energy Sector. The TSX is 18% energy. The world is 5% and the US is 5.85%. Canada has a big bet on energy. It is 39% of the index in Norway. The energy sector in 2012 was 26.2% in Canada and a little over 10% in the rest of the world. It means that sector has been under performing and he does not see any change. In 2011 the US shale fracking boom started. It has been a struggle ever since for oil prices. He believes that oil is going to be centered around $50 for a long time to come. US pipelines are the place to be as they will be full for years and years to come. Canada will under perform because our governments don't like pipelines.

Market. Recession fears were overdone last December. Recessions don't happen as much as they used to in a service based economy. In the US they have only ever seen the economy go 10 years without recession, but in other countries around the world, the UK for example, has gone 15; Australia is in their 28th year of economic expansion.

Uranium has been a very tough place to be. Don't buy the companies. He would just buy the Uranium participation units (UPC-T). At some point it is going to rise.

We shouldn't be fooled with the current big bouce off December sell-off. We are creating a top now and then become choppy, but we're at the top of the range now. The first stop in a pullback would be 24,000 on the Dow, then 21,000 is the BIG drop-off, but he does not expect that. The Dow may fall 1,000-1,500 then will regroup. He would take profits now. Reward yourself with some victories. Boeing was down 5% today after the Ethiopian crash yesterday. He expected a deeper pullback for Boeing actually, though the company isn't out of the woodwork yet. Apple was up 3.5% today, and tech also had a big day today. Tech still looks great. Apple is underperforming compared to peers. SNC Lavalin: buy it now after being beat up. It's oversold because of politics.

Besides support and resistance levels, what technical indicators do you use to pick entry and exit points? Also, what volume indicator to follow? He looks 50-, 100- and 200-averages, plus 19-year charts. Volume is big. He needs to see a confirmation of volume. Always watch the spikes.

Gold? It's been in a range of $1,100-1,400 for years. Exit at the top end and buy at the low. Now, it's stuck at $1,300. Gold isn't a safe haven anymore, but rather trades like a stock now.

Oil is down today based on weak US job numbers, Chinese trade data, and the announcement of the Norwegian State Fund selling a large portion of energy investments. This contributes to negative sentiment. We are in a market still where people are looking to not invest in the sector. Oil is up 25% YTD (excluding today) and yet some stocks are still down YTD. This has been a challenging sector for too long. Companies need to start doing significant share buybacks. The valuations are the lowest he has ever seen, they are insane.

Market. It is a big change from how we ended the year. He is on the more cautious side. It is great to see a 'V' shaped recovery but he thinks a there is not a lot that has changed. We were overdue for a correction. The strength of the recovery makes him say that we are back to the point where we need another correction. The US market is healthy. When you break it down you find it is a small group of stocks. He thinks it is healthy that those stocks have retreated.

Early Forties, no debt. How to construct portfolio. Start with investing in what you understand. Keep it to a time tested recipe. Time-tested dividends are the way to go. ETFs are recommended. Keep it simple. Start with the US market. As capital grows start to become more customized.