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

We've had a fantastic run since the tariff tantrum back in March/April. Conditions still support further upside.

One of those is that we're expecting further rate cuts in the US, and likely one in Canada this month. As well, AI is still leading the group, but you have to be selective because things are getting a bit pricey. 

And then we have very strong seasonality tailwinds behind us at this point. Q4 for the last 10 years has averaged about a 5.3% return, and it's been positive 9 of those 10 years. Finally, look at all the cash on the sidelines in the US -- about $7.3T. With interest rates coming down, some of that cash might move into equities and other risk assets including bonds.

Right now, markets are forecasting at least 2 rate cuts in the US being highly likely. Then we'll have to see what comes through in the data.

A record amount. Not all of that will shift into equities and corporate bonds, but he's suggesting that at least some of it will as interest rates start to fall. Of course, some of that cash is meant to be there as proper allocation in a portfolio.

Financials and technology. Likes healthcare for its combination of defense and growth. Some areas of healthcare have not performed well, such as big pharma. Whereas names in logistics and distribution have done well. So you need to be selective.

Pharma at this point is a bit of a value play. But with rates coming down, growth continues to be more of a favourite area. In a falling interest rate environment, growth tends to outperform.

He's not sure you'll find bargains per se. You can find some relative bargains among the larger-cap names if you look at not just the PE, but also the growth in front of them. Some of those names look good, while others have a very expensive PEG ratio. Again, you have to be very selective. 

For growth, he looks for at least double-digit teens to maybe 20% earnings growth going forward. PEG ratios that are below 2 or 1.5.

We probably don't have as much dry powder waiting to be deployed. But gold has been performing very well, as has silver. He prefers silver, as it's outperformed gold this year. Banks have recovered very nicely so far this year.

When you look at the grand scheme of things, the US has more depth, different companies, and certainly more companies that are in the growth area. There are also opportunities beyond the NA borders.

He has most portfolio assets in the US, with some in Canada. Just a smidgen in international markets. He doesn't intentionally focus on a region, it's more company-specific. For example, he owns MELI, a Latin American company that's like a blend of PYPL and AMZN.

In general, they have the opportunity to perform because the USD has been underperforming relative to the rest of the world (not including Canada). So you get the upside in the currencies of the international markets. 

Certain international markets are cheaper than the US on a valuation perspective, no doubt about that. US is at high valuations. However, earnings growth continues to look good in the US. The aggregate earnings growth estimate for the S&P for 2026 is 12-13%, very conducive to more market upside.

Really likes the space -- a long-term mega-theme. A lot of companies in the space are a bit expensive right now, and spending can be quite cyclical. The whole area is high beta. He's not in any names right now, too expensive, but will probably be back in some day. As an active manager, he checks names and trends on his radar at least weekly.

He wouldn't want anybody to load up on any particular commodity. They all go through cycles. Oil does it, gold does it. Silver will do it.

You want to own both, the best of each. Don't forget about the US banks. A name like JPM (which he owns) has done very well on the strength of the US economy, deregulation, and very strong management.

Crazy this year, and for the last three. Pretty amazing the impact that the tech run is having on the market. Since the middle of April, the QQQ (benchmark of the NASDAQ) is up 40%. It's truly historic.

Doesn't think so. JP Morgan came out with a research study -- claims that there are 41 pure AI stocks that have contributed 70% of the returns this year for the S&P 500. The other 459 stocks have contributed the other 30%. Just wait until the buildout is done by the vendors, and then you have the end users who are going to be using the built-out AI infrastructure. Still a long runway.

It can sort of feel like a shell game. Rubber's going to hit the road come 2026 after all this spending for the last 2-2.5 years. That's when we'll find out whether the vendors are going to be making money. 

But he thinks that, more importantly, it's whether the end users that are going to be using this AI infrastructure are going to be making money. So far, he believes the answer is yes for both sides. For the infrastructure, there's still a heck of a lot more to be built out on the hardware, let alone the software. And the end users are the ones who are going to benefit.

Definitely hitting the healthcare side, speeding up R&D on biotech. Definitely impacting entertainment business; one of the reasons NFLX is doing so well is because they've really embraced AI. It will filter down even into manufacturing.

He and his team believe that robotics are going to be a big, big deal in 2026. But robotics only work with the AI infrastructure. 

There's a lot more to come.