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

Market. The TSX hitting a high is a relative thing compared to the rest of the world. Weed stocks are not stocks he has invested in for his clients because it is a business that is in its infancy in Canada. No one knows what it will look like in 2, 5 or 10 years. He does not know who the survivors will be, the winners, etc. Lots of money managers have not invested in these stocks. Most companies are getting in the beginning into the medical marijuana business. It is not based on science like regular drugs. There is not a good substitute to use as a bind placebo. You don’t know how much of the product will come from private grow-ops where it is not taxed.

US Bank Recommendation. He favors US over Canadian banks right now. See his Top Picks today. A second one is BKU-N. It is based in Florida. It is mostly commercial and real estate loans. It is well run and has a great future ahead of it.

Utility Stocks. See his Top Picks today. Every portfolio should have a portion in utilities and regulated companies. You own them for diversification and dividends. They outperform when other stocks don’t do well.

A Japanese stock that can be traded in North America? The one cautionary note about Japan is that the Bank of Japan has been the heaviest buyer of ETF's in Japan for the past year. That would give him cause for concern. They are propping up the market by being the biggest holder of the Japanese ETF's.

Market outlook for 2018? Thinks the tax cuts have already been priced in, so it is time for earnings to start to grow. If earnings can grow beyond the 8%-9% that economists are forecasting, then you'll probably get a positive market in 2018. If the earnings don't grow at that rate, we’ll probably see a correction at some point. This is why he has a cash on the sidelines. To him, it is the best of both worlds because he has been able to outperform, not being fully invested, and if the market falls he doesn't have to sell into a falling market.

(South African investment?) The Rand has rallied back big time in the last 2 weeks because of the recent election results. There are a couple of ways to play south Africa. You can go into the consumer or banking with any of the companies. It is doubtful if you are going to be able to get them on an ADR, so you may want to go into South Africa on an ETF. You may also want to get an interest in the supranational bonds. If you believe the economy is going to turn around and improve, there are bonds with coupons running around 8%.

Model Portfolio for 2018 Look at individual companies, specific fundamentals, and individual drivers and build a portfolio that’s diversified across industries, sectors and around the world when appropropriate. On the margin, they are generally seeing better opportunities in Europe and Asia. Opportunities like the UK who are undergoing their negotiations for Brexit is where a macro event is creating some specific opportunities. Tax packages in the US are definitely going to be a tailwind for earnings in 2018.

Industrials Impact of the Technological Revolution Industrials are one of those areas that the benefits of technology hasn’t been fully felt yet. He’d rather see a diversified portfolio across a number of different industries and sectors. Financial Technology is also influencing the banking sector.

U.S. Dollar The Canadian dollar is probably getting closer to fully valuated and it's hard to see sustained upside. He favours U.S dollar at this time. Sees upside interests rates in the U.S. and sees the economy moving in the right direction. Leaning toward seeing 3 interest rate hikes in the U.S. in 2018.

U.S. Market Outlook He has been long & overweight on the U.S. market so he is very pleased with what’s happening in the U.S. Tax reform bill, proposal to repatriate several billion dollars in capital, low interest rates; the U.S. is becoming self sufficient on energy. What better things can you have for the market. He’s continuing to be bullish. He expects to see more of the U.S. market to trickle down, going to some of the smaller caps as well now.

Canada The problem with Canada is that we have to get those pipelines built. Can’t blame M. Trudeau for that, the Harper government had a majority and should have ramrodded these things through. He thinks we will be dragged along anyways. It’s just unfortunate they’re not making enough effort on getting the pipelines done. Build the pipelines and build as many as you can, otherwise we’re going to have an orphan resource, which could happen with the electrification of cars. We need to get that out of the ground.

ETF for European Asian Tourism? He doesn't know of a travel ETF, but you can look at Vanguard VGX. It’s an all European ETF. If there’s increase earnings as a result of asian tourism, that’s where it would be reflected. It’s very successful and quite large, and quite reasonably price with MER around 0.12 to 0.14%. That's one you can look at to capture some of the growth in the European market as a result of Asian tourism.

Binary Options Run from the idea. You can’t trade them in Canada. They are legitimately traded in the U.S. but there’s an awful lot of hype about this. It’s a great way to lose your money. There’s a huge difference between investing and gambling and that one is on the wrong side.

Leveraged ETFs suitable for day trading? He doesn’t touch leveraged ETFs because at the end of the trading day, there is always ajustement in price and you can be correct on the ETF but still lose money because of the adjustment on the price. He would look at the ones that aren’t leveraged. He would look at the inverse ETFs but not the double inverse ETFs. You can day trade with ETFs, depends if you want leverage. He doesn’t like leverage in general, he wouldn’t take a client that has a home equity line of credit (HELOC) for investing.

How to decide when to sell an ETF if you don’t have a manger? That is some of the risk an individual investor takes. If you are uncomfortable with that, then you should get an advisor. You either got to do it on your own or pay someone to do it for you. There's the robo advisors. He likes the robo advisors. The good thing is that it keeps clients out of the mutual funds hands and opens up an opportunity for them to get a managed portfolio. The problem though is that he has gone to some of the robo advisors and pretended he was someone else and some of the advice he got were quite frankly dreadful. He likes the robo advisors and thinks they have a role to play and they keep the fees low which is great.