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

He's finding recently that we're starting to see rotation within it. Some parts are starting to level off and even have corrections. But the parts related to AI are still doing well.

Small caps, too, are doing well. The mega-caps have run so far for so long, that now some people are taking profits and are looking at small- and mid-caps. Those areas haven't moved up as much and have room to catch up.

What was interesting about September was that we had a great move in resource markets -- Canada, Australia, Saudi Arabia, South Africa. The other part is in the Asia-Pacific where China had a good month, as did Taiwan and Korea.

Rally is pretty broad-based, but most of what he's seeing is that countries sensitive to technology and metals are doing particularly well right now.

At his firm, they do relative strength analysis. This involves head-to-head battles of stocks/indices/sectors against each other -- billions of calculations every single night. It tells them who's winning these battles. Gives insight into where $$ is going in and where it's coming out. The result tells them who's outperforming on a relative basis, or if it's a case of the tide lifting or sinking all boats.

For example, starting to see energy stocks come up in the RSI rankings. Particularly intriguing because the price of oil isn't doing all that great. Last week, looked as though it wanted to move; this week, not so much with the uncertainty of the OPEC+ meeting coming up. ADP payrolls came out yesterday, and people are wondering how strong, really, is the outlook for demand.

When you're wondering, technicians historically say that stocks tend to lead commodities. In this case, even though oil isn't doing well, the energy stocks are starting to do really well.

Global markets have been on an upswing. It's especially important to look outside NA on a currency basis, because big moves up in the US stock market have coincided with big moves down in the USD. So if you're a Canadian holding US stocks, there's been a lag in US performance because of the currency. Whereas on a more common currency basis, Canadian and international equities have done better than US ones.

Several decades since we've seen this. Gold has played a major role in shifts in reserve currencies. Investors are looking more closely at gold, and at gold equities, as an investment alternative.

Gold has doubled over the last 3 years. Up 47-48% YTD. Things really kicked off when Russia invaded Ukraine, and sovereign countries realized that no assets are safe. So it's been a steady move, with significant velocity picking up in 2025. There's been increased geopolitical uncertainty this year with Ukraine and the Middle East, as well as around the Federal Reserve and Trump trying to assert his influence.

There's also diminishing comfort around the US dollar, retail demand for ETFs, and insatiable Chinese retail demand. Gold bullion and gold ETFs have become easier to own in China.

Velocity and momentum in gold should continue.

Investing 101: Willingness to Accept Risk vs. Ability to Accept Risk

Willingness to accept risk

An investor's willingness to accept risk relates to whether they are a risk-seeking individual or not. This piece caters more to the psychological side of things such as how much volatility they can withstand and what kind of returns they expect. It also looks at what an investor wants to get out of their portfolio.

Ability to accept risk

This piece focuses more on the facts of one's financial situation and less on the qualitative side. This looks at items like age, knowledge/experience, portfolio size, employment status and salary. Someone who is more able to accept risk is someone who is young, gainfully employed, understands investing and has a large portfolio to begin with.
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The focus has shifted from tariffs to rate cuts. The Canadian and US central banks have delivered cuts that kicked off a new cycle. Initial reaction was mixed, but that's not unusual as investors recalibrate the path and pace of future cuts. We could see a bigger pullback from all-time highs, but not a break from this uptrend, led by the tech giants, consumer discretionary and utilities. On the TSX, materials and financials continue to lead. Bank stocks are climbing (she's bullish). Industrials lag, waiting for a clear outlook.

There's a lot of focus on interest rates. In his business, he finds that it's more about the stability of rates than about the direction. The past 6 months have seen greater stability in interest rates, which lets transaction activity pick up. That should lead to price discovery in the sector, and makes him bullish on some key themes.

REITs have come off. If you look at a chart of real estate stocks in the S&P 500, valuations are at their lowest levels relative to the rest of the S&P. This group has really been unloved, with the big chase in tech. 

As a result, you have great businesses, a great store of value, with growth that's being completely overlooked. Public real estate is trading at a very wide discount to the NAV of the private market. Should be a lot of opportunity heading into 2026. It's a typical environment where you can imagine M&A activity picking up. Great time to look at the space.

Dividends in the sector are growing because the property fundamentals are so strong. It's a very bullish sign. Great sign to see cashflow increasing and, with it, the ability to pass it on to unitholders. 

Online markets are betting on the odds of a US government shutdown. Around noon today there was a 75% chance and now 79%. The longest shutdown was a couple of weeks and makes no impact on the long-term US economy or stock market.  At most, the market corrects 3%, then snaps back. So, a correction happening now would be caused by something now. You will see fear in the options market where people take bets strategically, mostly putting on hedges. 

September is the weakest month, but markets are up. When this happens, usually you don't get the seasonal rebound. Markets are richly valued and there could be a correction. Be ready: have your favourite picks ready to go. He loves long-term cybersecurity, AI and uranium, whether companies or ETFs at your time horizon (i.e. 2 years). Warren Buffett would say buy an S&P ETF.

He likes collar strategies to manage market volatility. Find a high dividend stock or ETF and periodically put a cashless collar on it to buy protection to pay for it. It the market corrects, your collar is profitable and benefits capital gains. However, watch the emotion side of executing these in volatile markets. Not for investors who don't watch markets every day.