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

Weed Sector Outlook No one knows where this sector is going forward. He sees this area like agriculture and science combined -- but there is a lot of uncertainty. Prices are very strong and it makes the metrics very expensive. You are only seeing cash burn at this point. Until there is a normalized margin for the space, it is not worth his risk-reward evaluation.

Time to invest in the Utility Sector? The sector should do better than 2018 with the expectation of flat interest rates. If rates to up it will be negative for this space. He would prefer to own a select few strong companies, rather than a diluted ETF. The ETF yields about 4.6%.

Ron Joyce, co-founder of Tim Horton's, dies at 88. Good long life, and a successful Canadian business. He remembers the Tim Horton's from the 60's. Hugely successful over time. He will be missed.

Big market gains in January. The volatility is amazing. December 2018 was the fourth worst month in 100 years, so all we've done is get December back. There was some panic. The Fed has really helped with stopping tightening and slower rate raises. We had good job numbers this morning, and earnings are co-operating. Mid-year, if the Fed raises rates, is the market going to panic? He hopes the economy is strong enough to take measured increases. It should help valuations. It doesn't look as though there's a recession on the immediate horizon, so markets can go up from here.

Is it good that investors are not looking to hide now that the market's more buoyant? We stopped worrying about higher rates, which were pressing on all the yield plays. If rate rises are slower, the places to hide look more attractive, as they're cheaper.

Market. The Fed has given the market a clear signal that they will not get in the way of the market short term. It rallied 400 points higher yesterday and is going higher today. Don't be afraid of owning stocks. The drop in the S&P was the worst last month for a December. By year-end he thinks we will hit 3000. Earnings drive stocks so an accommodative Fed should ease credit pressure. M&A will happen and stocks can be valued at a higher level with lower interest rates. It will not go up in a straight line in the next 11 months. We face headwinds for earnings, China and the Fed: two out of three have been check marked and it seems like we will get some kind of agreement with China.

Market Outlook - Amazon.com (AMZN-Q) issued a Q1 guidance a little weak and perhaps that indicates slower consumer spending. Consumer spending in a rising interest environment is a theme going forward. Interest rates are still rising even if the US pauses for a while and the global economy is weakening at the same time. That is going to affect corporate earnings. We are seeing also wage inflation that we haven't seen in a while. On this kind of environment you want to really focus on valuation. The safe sectors are consumer staple and health care in case the economy falters.

Any mid-level oil producers? He has not stepped back into the energy sector yet. He needs to see oil sustain higher prices. Longer term, the valuations are very enticing. When investors return, it could move fast. He would suggest starting to pick away and add to them as they prove things are sustainable.

Big rally today after the US Fed held interest rates, doing a 180 from what they talked about just a month ago. The market wanted this. Earnings are a little uncertain. The recent sell-off lowered expectations, which is good. Also, there's a global slowdown, but not a recession. Then there are the US-China trade talks. Both sides have an incentive to achieve something. They should reach some sort of agreement like a short-term solution, but the deep-seated problems will take longer to resolve. Don't panic in these markets. Make adjustments to your portfolio as needed.

After the recent 20% decline, investors are now taking on risk. The rebound has happened. Buy the dips is still the mantra. Over the last 11 years, the US market has been the *only* game in town. Canada and MSCI are small in comparison, dead money really. That said, the darling from the previous decade won't be the darling in the next. Where is the puck going? Over 20 years, Canadian returns total 583% vs. the US 209%, both is USD. Problem those Canadian returns haven't happened in the past 11 years. The lesson: diversification is key.

What are the benefits and costs of ETFs? Are they like GICs? Better than stocks? ETFs allow investors to diversify, the greatest innovation in investing of the past 20 years. They are magic. ETF's have reduced fees, certainly cheaper than mutual funds. Use these to diversify. For example, you can buy the entire Chinese stock market. Yes, consider ETFs.

Core ETF with a 25-year horizon? Risk parity. This mean you have assets exposed to all four of the market regimes, and you're balancing your exposure so you don't any more risk in any one particular market regime outcome. A risk parity ETF will give you a smooth ride. But the challenge is that it'll be very low risk, whereas with 25 years, you can absorb more risk and earn more. Look at VGRO and other Vanguard ones. Also consider iShares.

Should I buy an inverse ETF on the S&P? This is really shorting. The problem with shorting is that financial assets have a positive risk premium--you must overcome not only the fees you'll pay (50 basis points for exmaple) and 2.5% dividend, plus the risk premium (+5 on average). The upshot is: this is really, really hard and a retailer investor shouldn't try it. Instead buy the 7-10-year US treasury (see his Top Picks today) or the 20+ year US treasury. This acts like a short, when you expect market duress, but you got positive risk premia. You'll get the 3% yield and you will gain if the market falls. Look at USD-denominated bonds. Don't short the S&P.

Nice to see Apple returning to December levels (just announced earnings), but it has a long ways to recover 2018's high. There will good volume but may hit resistance at $175. Apple is a driver so it'll help the index traders. US-China trade war: certainly important in relation to the markets, but earnings in the coming weeks and interest rates are bigger drivers. Now, there are many discounted stocks, but the markets in the past year have been confusing with emotional panic buying involved. This results in unusual whipsaw moves. It's difficult to trade this. More certainty would encourage buying. S&P pulled pulled back today. We see support around 2,700 which is a jumping-off point. He's short-term bullish meaning the next few months. Be diversified with hard stops and exit points. Sell into strength. He's slightly bullish.