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

What to do with cannabis stocks once cannabis is legal? They're like mining stocks, which start with a run-up in price afer people recognize that there's a reserve of the mineral. Then you do an environmental study and raise money, but then people get bored until the mine goes into production. HMMJ-T ETF peaked at end-2017 then pulled back in early-2018, but now that we're approaching the time when the rules will come into play (legalization), we're seeing M&A and a lift. This group is now interesting. He holds a 4% in the cannabis sector.

Overview. He doesn’t sell everything in May, or even most of his stocks, but he does his tax-loss selling now and prefers to buy in August / September when prices are more likely to rise. This is a good time of year for stink-bids, in which he offers a low price late Friday and sees if someone fills it over the weekend or on Monday. However, he does not use put options because he prefers not to force himself into timing issues after he has bought a position.

Uranium. This sector has been out of favor. Cameco (CCO-T) and GSE Systems (GVP-A) are his picks in the sector.

Silver. The silver sector has not done as well as the other commodities. It was more interesting a few years ago.

It's odd that we're not seeing good Q1 earnings reflected in stock prices both in Canada and the U.S. Doesn't know why. Facebook and FANG stocks have recovered from the winter dip/scandal. The U.S. has a healthy economy with low unemployment, and so it can handle faster interest rate increases to 50 basis points. The U.S. 10-year yield has cracked 3%, but it's still historically low like interest rates. In Canada, he's sold half his stocks, because he sees no resolution of any issues. NAFTA and TransMountain are up in the air. He doesn't see a lot of money coming into Canada. Canadian bank earnings this week: he likes Canadian banks because they have exposure outside Canada, though he doesn't see big growth in them.

He's not interest in any cryptocurrencies, including Bitcoin, but he's interested in the process of blockchain--that's real and growing.

Are ETFs what a retiree should invest in? It's a very good idea. He buys them for his retired clients. The question is the bonds/stocks balance. Also, you can invest globally through Canadian ETFs, hedged to the CAD so you're protected.

What asset allocation do you recommend for a retiree? A typical retiree should hold 40% bonds and 60% stocks, but he stresses owning at least some U.S. and limit Canadian exposure. Too many Canadian holds too much Canadian equity and zero American. Also, don't fiddle with your portfolio. Let it ride and leave it alone during volatility. Be CAD-hedged for safety.

Should I switch from mutual funds to ETFs in my RRSP? Definitely. Mutual funds underperform the indexes because of high fees (2.25-2.5%), whereas an ETF can track the TSX for 0.08%. He wouldn't touch an ETF that charges say 1.00% MER. Bond ETFs are pricier, starting at 0.25% for some reason.

Is there a preferred time of year to rebalance a diverse ETF portfolio? Every six months sell some of the stocks that are heavily weighted in your portfolio. Also rebalance to your original asset allocation when there's an event trigger.

Deltas and options: Delta is the price of the option in relation to the stock. It's complex, so if you're looking at deltas, you're a pro trader.

The TSX has been on a run lately. There's a lot more to come. The recent run-up is largely due to the rise in oil prices. XEG has another 8% upside. A slow-down in production by Venezuela is one reason. He's buying more oil. He guesses 15-20% more room to run in oil stocks. These companies will buy back stocks, pay down debt and/or raise dividends. Rising oil and gas prices will hit Canadian consumers, of course. Rising interest rates and new laws constraining real estate will dampen real estate. But overall he sees at least another good year for the stock market.

Market Outlook. This is historically the part of the year when you want to become more defensive. Typically, that means going to bonds. This year we are in a rising interest rate environment so maybe you don’t want to be there as inflation still keeps coming up. If the Fed keeps on raising rates Poloz will have to follow in suit. 2.2% increase in mortgage expenses for Canadians just year-to-date. Gas up 14%. Inflation needs to be stabilized.

Timing the market is not a good idea as most experts but seasonal investing seems to work - He runs the website Timigthemarkets.ca so he is for it, but he just wouldn’t advocate anybody to do it. Seasonality should be seen as a tail wind for stocks but should be seen in conjunction with fundamentals and technicals.

Rising Interest Rates did not do any harm since January. Why not buy dividend stocks today? Some are interest sensitive names. He owns some, knowing interest rates are going up. Many are negative year to date. EMA-T, for example, down 14% YTD. You have to look at it with a longer term perspective.