Larry Berman CFA, CMT, CTA

Likely have reached peak inflation. What will the new base rate be? Possibly higher than the Fed would want. They would then overcorrect and cause a recession. Markets will probably stabilize in the next few months. No new highs.

What is the best ETF to buy? Need to determine what will be the core of your portfolio. Could be a world index like VT-N, could be the S&P 500. TSX is only 3% of the total world market so not a good idea to make it the core of your portfolio. Starting with the world is a good base. Can diversify from there by adding more specialized ETFs.

Best ETF to get exposure to 30-year Treasury bonds. Trades 20 to 30 years fixed income. This is the one he uses. More aggressive option with 25+ year maturity remaining is ZEROZ-N. ZTL-T is also an option in Canada that can allow to hedge the currency risk. Keep in mind that if inflation wins and Fed misses, you don't want to hold long bonds.

Half of the companies in this index don't make any money. Only works when speculation and economic growth is in front of us. Not the moment to buy. Mid-cap companies ETFs like the S&P 600 are more interesting.

How are long-duration bonds different from long-duration equity? Night and day difference. From day to day like now both haven't been doing well because of inflation. While inflation is a driving force, not a good idea to buy. When protecting from recession, you want federal long bonds and not equity. That's the main differentiator.

Canadian banks have always been a good investment. Don't see this changing now. From a trading perspective, should see a bounce soon to around $39 and then another drop. Can buy low and hold for 5 years. Dividends are probably going to continue to grow.

Get paid a rate of inflation plus a small coupon. How much future inflation is priced in? Unless you know, can't buy and expect to be protected against inflation. Would not recommend individual investors to buy it. Need to be very sharp on technical financial aspects to play with those.

Energy stocks are likely to hold firm in the coming months. Not interested in the long run because of green energy. Interesting in the short term. Good for trading, look more to solar and wind for long-term investment.

Educational Segment. Should you include crypto in your portfolio? Called Bitcoin a Ponzi scheme last week. Was incorrect, it doesn't fit the definition of a Ponzi scheme but gets boosted the more people get involved in it. The difference with stocks is that we cannot value crypto based on real principles. It is valued based on its scarcity (there is a limited amount of Bitcoins). You want to add something to your portfolio that has uncorrelated returns. Historically, correlation between Bitcoin and stock market was low. Since Covid, correlation has increased. Low correlation of Bitcoin comes at the cost of huge volatility. These are the points to keep in mind when deciding to include crypto in your portfolio.

Has been a hold for 20 years. Was the stock to own in the late 90s. Hydrogen fuel cells technology have come a long way but the trend is down. Still want to be present as there will be rallies down the road. More of a trading stock.

Opinion on GICs Yield linked to interest rates. Expects the Fed and Canadian Central Bank rates to stay very close over time. GIC rates could go up to 2.5% but not much higher than that. Sees longer-term inflation in 4-5% range. GICs will not yield enough to safeguard against inflation.

Good moment to buy Canadian banks? In positive scenario, can expect S&P at 4700 at the end of the year which would be good for Canadian banks. In recession scenario, S&P at 3600. Question is will there be a recession? It is likely and markets haven't priced that in fully.

Is it a hedge against inflation? Fundamentally worth 0. Probably biggest Ponzi scheme of history. Can be traded. Can be correlated to an inflation hedge from time to time, but do not recommend to buy for diversification.

Underlying holding is futures markets. They have forward premiums which erode net asset value in the long term. Not ideal for long-term holding. More a trading asset. Useful to have efficient carbon pricing markets. Good idea to invest keeping those caveats in mind.

Educational Segment. What will be the catalyst to turn the market? Stimulus coming from China often plays that role. Currently China is having issues with Covid but hight pressure on the government to be stimulative. China's credit impulse should be coming in next 6-12 months. US 10-year yield is currently at 3.2%. If it breaks past 4% it could be really tough on equity markets. There will possibly be a tradable rally soon but a rally that will fail. Almost certainly a down year for US equity.