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

Is GOLD a secure investment all year round? Gold is not a safe investment. It carries volatility and risk. You can lose lots of money. You need to hold it and not trade it and you need to hold it in the right cycle. He feels this is a right cycle. He has a 7% weighting. GLD-N and XGD-T are two ETFS to consider.

Canadian Banks – Buy? Which names? At some point we have to go through a credit cycle reset. He owns them but he is light. Those more leveraged to the Canadian credit markets are trading at lower valuations. He owns CM-T, for example, who have a bigger exposure but is trading lower. TD-T and RY-T would be his recommendations, although he is not pounding the table.

When to build an income portfolio. Trying to time it is risky and dangerous. You can’t invest in growth until the day before retirement. You want to have the majority of your portfolio generating income well before you retire. Don't go growth until the last minute.

At 30 is it safe to invest in tech and the like. It comes down to how much time you have for research. If you can do due diligence, then build a portfolio of stocks. Otherwise you have to hire someone to do it, or just invest in equities over the long term. You have to be diversified. The biggest risk is an investment that significantly erodes capital. You can use a mutual funds or a US/Canadian ETF. It is just a matter of being in the game with a diversified portfolio.

Market. We are into a new investing era, but it is old. It has been so long since we experienced the good AND the bad in equity investing. Volatility has come back. Oil and commodities are the main drivers in Canada but in the S&P it is more balanced in terms of sectors. When you look at returns from the market, they will not be as meaningful in the next 5 years. Investors look at things on a day to day basis. Having that information provokes you to take action more frequently.

BMO-148 Monthly income fund mutual fund. He does not buy mutual funds. The traditional monthly income funds have had an asset mix of 60/40 and that is what you are investing in. Not all mutual funds that appear the same have the same risk. You have to look at the underlying risk. He would rather manage money for his clients himself.

Market Outlook. Rates have gone up. There is always a negative slant associated with this but that is more based on history. We don’t know how markets are going to behave going forward. Tax benefits are affecting earnings positively. There is a seismic shift also on how business is done with the Internet of things, AI and other technologies. There is a big shift in the way data is disseminated and analyzed.

Signature Diversified Yield CI Funds. He typically doesn’t respond on funds as he doesn’t know their strategies. Better proxy than owning some of the dividend yielding stocks. Good asset base and diversification.

General Market Comment. There have been many new ETFs developed. Any new theme will cause the launch of a new product line such as block chain and cannabis. Low cost, beta funds were particularly popular last year in the US. The funds make money on low MERs by taking advantage of economies of scale. He thinks ETFs will likely save the fixed income bond product environment, especially as rates are beginning to rise.

ETFs and Withholding Tax. He is not a taxation expert and suggests you seek expert opinion. A withholding tax will have only a marginal impact if the yield is low. Some registered account may not allow for all this to be recovered. When it is a US ETF that holds foreign tax, then it becomes even more complicated.

Swap based ETFs taxation. He is not a taxation expert and suggests you seek expert opinion. The total return swap based ETFs don’t hold the underlying stocks, which introduces counter-party risks of the derivate swap sources. There is no dividend income from a derivative based ETF, so this does offer a form of tax deferral. Corporate class ETFs offer other advantages because it holds a mix of Canadian and US stocks, but they are sometimes classified as a Canadian holdings thus avoiding US withholding tax issues.

Block Chain ETFs. There are now three block chain ETFs in Canada, the first being HBLK-T, and there are more on the way. This space is in its very earliest development, which makes it challenging to build an ETF with good diversification and liquidity. Early investors may be taking on speculative risk and would not recommend it for a large long-term holding.

Canadian corporate profits looks promising--and overlooked by investors. Earnings are up 23% on the TSX from the same time a year ago. Earnings, oil price rises and less NAFTA risk have pushed the Canadian market up. Regardless of the state of NAFTA, we have to get on with business. It's possible we could have a deal at any time; the U.S. faces mid-terms in November, so maybe they want a deal locked by then. Tailwinds for oil: Venezeula is collapsing into chaos will tighten supply; Iranian sanctions looming; and U.S. shale was supposed to fill any supply gaps and drive down oil prices, but the U.S. is finding the same problem we have--lack of pipelines to carry their oil to market. Can Bill Morneau and the Liberals get the Kinder Morgan pipeline built? Today he took the soft, as opposed to hardline, approach.

Will debt-laden Canadians slow consumer staples stocks? Yes, rising interest rates and higher mortgage payments will take a bite out of consumer spending. But consumer staples aren't discretionary; there are groceries and prescription drugs. A real worry is consumer discretionary like cars and furniture.

There's talk of reforms forbidding Canadian banks from selling mutual funds beyond their own brand which will decrease bank stocks. There's long been talk about such reforms. Things move very slow in Canadian regulatory affairs. If this happens, the banks will find ways to recoup margins by squeezing the margins of the independent fund managers. Further, in Canada, we lack the animosity that American banks and regulators have. Canadian banks are stable, so your risk and bank dividends are safe.