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

The BoC and US Fed are optimistic and so are driving both markets, but he himself has some doubts. For instance, Italy gave us a scare last week and their problems will linger. This week saw some pent-up buying. The Eurozone has one currency for everybody, a one size fits all approach, but not all these countries are the same, namely Italy. This is his doubt. In Canada we face a possible trade war. Trump wants a 5-year sunset clause, but this hinders long-term business decisions. It's better to have no deal than a sunset clause. Investors should find stocks that will perform well regardless of NAFTA. Own the best and skip the rest. The big U.S. tech stocks aren't cheap, so you may not see company earnings for a while; meanwhile, they are volatile, subject to regulation.

What's the outlook for crude oil based on technical analysis? Crude oil broke a key support level on the daily chart. In the short term it's bearish. Since mid-2017, it's been in an upward channel and looks good. Hold on.

Market. The fundamentals underlying the economy are in good shape now and he expects this to continue into next year. The tech space, as seen in NASDAQ, is in record territory but looks to go higher. The fundamentals look great. The companies are growing well, the profits and balance sheets are there. This is an area that all companies will need going forward, so this will be a continuing theme. The TSX reflects a tougher situation. It is based on energy, financials and mining. The energy space has come up, then down a bit, but the overall record has been positive. The financials make up the bulk of the index. The results are very good but there is an overhang from consumer debt levels and house prices. It is tough for the index to move when the banks are not moving. Much of the excellent recent profits of the Canadian banks are based on mortgage loans, and with the new regulations, this growth might not continue as quickly as it has in the past. He prefers to invest in banks outside of Canada at this time.

Market. Trade wars are hanging over equities. It hangs over Canada more so than the US. Canada is a lot cheaper than the US in terms of price to book (40% cheaper than the US). It is due to financial stocks. They are cheaper in terms of their upside potential. They are 30% of the index in Canada. Very expensive stocks are refusing to correct and this is an ominous sign. Unfortunately the outcome of this tends to be dismal. Until we get a sell signal from the markets, we have to say that it is in a nice trading range.

Market. Either the ECB will come together and assume everyone's debt, and he does not think that will happen, or the European union will be over eventually. The markets are very much underplaying the risks around this. The policies of the new Italian government are to spend, spend, spend. They are proposing a mini currency, which is paper like a treasury bill to pay at the institutional level. The markets are also underplaying the risks related to the tariffs from Trump. They are going to break things before they get fixed.

Debt. We are choking on it globally. We are at 90% debt to GDP here in Canada. You have to include the provincial debt. The bigger it is, the more it makes interest rates difficult to raise. He thinks this problem is going to continue to get worse.

RESP Diversification. He would not just have banks. ZWU-T, preferreds, floating rate notes are good, too.

Funds of ETFs and who pays all the management fees. The quoted cost of the fund includes the costs of the funds within it.

Educational Segment. Chinese 'A' share markets. It's always been a closed market. A couple of years ago some ETFs gave you exposure to these shares. They are now getting into the MSCI emerging markets index. This is going to become a bigger and bigger part of international markets. It will add some volatility as well. ASHR-N is the first Chinese 'A' share ETF. In 2015 there was this big run-up in that market and then it collapsed back down again. In the next number of months if the 'A' share market gets back into its range it will look attractive.

Canadians really need diversified portfolios. Investors don't appreciate how unique 2017 was: volatility was a low 6.5, the second lowest in 84 years, which bred complacency. This changed early this year. Canadians need to diversify their sectors and geography. Home-country bias: we're second only to Australia, with 59% of stocks in Canadian when it should be one-tenth of that. To hedge or not to hedge CAD: follow the 50/50 rule.

What are covered call options? An institutional desk can manage these more efficiently than a retail investor. For example, you sell a $10 stock to a speculator who wants to put up only 50-cents and own the stock anywhere above $11. He has ownership of that stock over $11, but you're betting the stock will rise above $11. You give up the upside, but get a little of the downside and pocket that little premium. Options decay in value quickly near the end.

Why is a dividend ETF considered income and not a dividend? It's a function of an individual ETF, depending on the holdings within that ETF. You will see a mixed tax treatment. Held within a TFSA, you're good, but outside you will be taxed.

Better to buy a country or a sector? It's a tie. It depends on the country and the sector. Example: Canada which is dominated by natural resources and banks. Consider the momentum factor instead--what's performed well in the past 6 months. If that momentum is in a particular country or sector, that's fine.

Market. His company is a portfolio hedge manager in the global technology market. Black Swan Dexteritas came from BSD, which in Israel translates to “great prosperity”. They watch over 700 technology companies and sees technology being the combination of intelligence, data, and merging the virtual and real worlds. He sees the 5G market growing to $1.23 trillion by 2026, with today over 6.5 billion wireless devises growing to over 20.8 billion by 2020.

Digital Twins. His research has lead him to think that a physical object could be digitized and put on screen, creating a virtual representation of that object. From there, you can gather data and hypothetically test it to see if you can run it more efficiently. It could be a machine, factory floor or even city. Singapore brought in a company to build an avatar of their city with sensors and cameras to gather data to change things like traffic flows or even sewer flows for maintenance. Hardware, software and end-users will all play a role for future investments.