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

Market. For broader markets the Fed is the biggest influence. NAFTA is also a factor. The Fed may be guiding toward higher inflation. With respect to Canada’s budget, it may be a much to do about nothing. They are waiting until next year, election year, to do a lot of spending. We need to wait for the details to come out but it may not be that interesting from a market point of view.

Market. It is getting more difficult to find attractive opportunities. The stock market has run up a lot faster than earnings (about double) over the last few years. That is in the US. The TSX has not gone anywhere. The problem is the valuations across the board. You have high valuations across all sectors. You need to be selective. He has stayed on the sidelines with Bitcoin and Block chain. He sees it as a way of facilitating transactions but not being a currency. He thinks there will be too much supply in the cannabis industry.

NAFTA and Canada / Mexico Pullout. It is highly unlikely that Mexico could pull out of it. Canada also is highly unlikely to pull out of it. The uncertainty of how NAFTA plays out is a negative on the markets.

What charts and moving averages does Larry look at. You tend to want to look at a timeframe one greater than the timeframe you are going to invest or trade in. If you are going to trade once a month, then you need to look at the annual chart. If it is daily trades then look at weekly charts. He likes a 21 day average (a month), a 63 day average (a quarter), and a 200 day average (a year). He likes to look at quarterly trends vs. annual trends.

Gold and Silver. The Euro has gotten stronger but will not get much stronger now. Gold came up to key resistance levels. We have not broken through them. He has material positions in gold equities and thinks we will get a break out in 6 months to a year. He has not given up.

Trading from a moral standpoint, rather than a capitalist standpoint. There are ETFs in the US that address such things as females in the C-Suite (SHE-N), or child labour. He is not sure if they outperform the market index.

Educational Segment. Economic scenarios most likely in the coming year. Interest rates will most likely rise. Earnings may go up or may not. The recession probability forecast from the Fed is not high at the moment. So don’t price in a recession. Inflation concerns are building. Hourly wages have ticked up to the highest point since 2009. The Fed may be increasing their tolerance for inflation. You need increasing yields and price protection. Horizons have a bunch of ETFs to address this. Floating rate ETFs hold bonds that give a higher payout as interest rates move up. They are good to have. Floating rate notes give you a stable return. You want to be more conservative on the fixed income side.

Market. U.S. equities will under-perform, though he likes sectors like banks. Post-2009 crisis, performance of these equities has been astronomical beating most other indices around the world. Today, American markets and currency are very expensive with a change in U.S. fed policy. We're in an emerging market cycle that will last for several years after bottoming in 2016. Recommends in U.S. equities, he is negative the oil space, but likes healthcare, though it's expensive now. There's better value in EM than the U.S. We're at the end of the 36-year bond bull market. Central banks are committed to gradual interest rate rises around the world. And inflation is finally here.

What ETF to buy for the S&P? If you're a very long term, buy-and-hold, investor, ZEUS is good to track the earnings potential of U.S. corporations. But he prefers to be overweight in certain sectors he picks.

What is a good ETF for Europe? Europe has been very demoralizing to investors for a long time, dogged by EU break-up threats, deflation and the Euro decline, for instance. He likes Europe. VEU:AMEX (Vanguard FTSE All-World ex-US ETF) is a core, affordable building block, but prefers a past pick, EUFN-Q (iShares MSCI Europe Financial), because as Europe recovers and earnings come back, you want to hold European banks.

What will happen to the CAD? He looks at currency like a stock--it can get overvalued or undervalued, though currencies behave differently from other assets. During the 2008 crisis, assets classes suffered, but only currencies were actually stable. Fair value for the CAD is 85 cents, though oil could pressure that. He's VERY bullish on EM currencies and neutral USD, both via-a-vis CAD.

Buy mutual funds or ETFs? Disclosure: he runs both an ETF and mutual funds. He doesn't like the active vs. passive distinction. There are active (and passive) ETFs as well as mutual funds. The big benefit of ETFs is that they've made accessible obscure asset classes, such as Chinese bonds, that weren't available before. Both vehicles are useful tools, though ETFs have built upon mutual funds.

U.S. healthcare ETF? A long-term supertrend in the U.S. but is that reflected in the current price? He's held XLV-N (S&P 500 Healthcare Sector SPDR) for a long time, but it's no longer the bargain it was a few years ago.

Which global fixed-income ETF to buy? Bond markets in the west are in a bear market. So, you must look abroad. Many investors have gone into dividend equities, but they increase risk in a future bear market. So, he looks for income sources. He holds LEMB-N (iShares JP Morgan Emerging Markets Local Currency Bond ETF) and off-shore Chinese bonds through DSUM-N (PS Yuan Dim Sum Bond ETF) which has been up 7% YTD while bond funds have been decreasing. The Chinese renminbi has been stable.

What South Africa and India ETFs to Buy? He doesn't know of South Africa, but for India, go with iShares MSCI India ETF (INDA:BATS), a classic cap-weighted ETF or the PowerShares India Portfolio ETF PIN-N which weights companies on earnings momentum.