Mike Philbrick

He doesn't know that we are heading for a recession, and we're getting conflicting data. Employment has remained particularly strong, which is unusual in the face of all the other data. Consumer confidence surveys are unexpectedly worse than normal. 

If we look to the bond market for some indication of where we are in this whole scenario, we're missing a couple of things for a pending recession. The yield curve -- instead of steeping it's re-inverting. Credit spreads in high-yield are widening, which is a risk-off scenario. The silver and gold ratio is spiking, again risk off.

Is this a normal growth shock, and you should buy the dip? Or this a real recession where you get real damage to growth portfolios in the 30-50% range? There's no confirmation of the latter yet, so he's still marginally on the side of the bulls.

The time to prepare for the earthquake and get insurance is before the earthquake, and there's still time. But today it's incredibly important that investors make sure that portfolio risk aligns with their risk tolerance. Need to have sufficient liquidity in the short term to withstand volatility. 

Be diversified by asset class like gold and geography. Perhaps today isn't the day to get into gold, though. Drawdowns have been far less in Europe. As well, not as much pain in non-market-cap-weighted US securities. Managed futures are also a strategy that does well in recession-type declines.

Most importantly, stay engaged. The tendency during these declines is to stop watching what's going on. Volatility often creates opportunity. Now, if you're one of those laid-back investors who never sweats the daily moves, keep on doing that ;)  Whatever your playbook was before, don't just disregard it now.

We had this huge 10% day, along with a spike in volatility, which can often happen within bear markets. There's a possible opportunity there. But we haven't see the follow through yet, where the bottom's in and then some days later there's another surge in volume with maybe a bit more breadth across the markets. Those types of signals would be a little more green for him.

US long-dated treasuries. Very good compliment to your growth stock portfolio. During crises, bonds spike because it becomes more about return of capital rather than return on capital. Long duration means it's much more volatile; for example, in 2022-2023 there was a peak to trough loss of about 40%. See his Top Picks.

Industry leader. Cap-weighted. MER is 22 bps. In today's climate, good to look at something with less volatility than a market-cap weighted portfolio. See his Top Picks.

Prioritizes dividend yield. MER is 22 bps. Yield is decent in the 4%-range. Nothing wrong with this one, though you may want to tilt away from energy right now. Energy exposure is higher than XDV. If Trump gets his way, there will be more oil and gas and the price will struggle. You'll want to be in an area that makes its money on volume, not on price.

Basket of Canadian stocks with dividend quality. A good choice.

Portfolio of the 6 big banks. Really high distribution, with a covered call strategy on the full 100% of the portfolio. Covered calls cap the upside to get income; they work in sideways markets or those slightly up or slightly down. Consider pairing this with ZEB.

Because there's no covered call strategy, if we get into a bull market you get full advantage of the upside. Upside hasn't been "called away" to provide an income stream. Perhaps lower income, but more capital appreciation along the way.

In the area of the market that's quite stable, mainly because utilities are regulated by government. They do become interest-rate sensitive. Recently got caught up in the AI hype and all the power that will be needed, so got a bit ahead of themselves. Low beta. About as safe as it gets in the stock market.

When the sector outperforms, that's a warning signal. And we've had a couple of those days. Great place to hide, good yield, getting the covered writing premiums. Challenge is that because utilities are so low volatility, that premium is less.

Have seen an expansion in the spreads, which means the credit risk has caused the bonds to deteriorate in price. Second-largest high-yield ETF in Canada. MER is 61 bps. Acts more like equity because of the types of companies that tend to issue high-yield debt, but it has more yield too. While it is riskier, you have a better entry point here.

XEI has more energy exposure, and he'd skew to less energy at the moment. But it's a difficult call, as that can change. Jury's still out on energy.

Largest in the category. ZBK is unhedged, but there's a hedged version as well (ZUB). He'd opt to start hedging risk away a bit more, given what seems a concerted effort to weaken the USD. Gives you diversification in the US banks, instead of Canadian banks, as it's a different market and different economy. 
 
Banks are very sensitive to the economy, and we're in a recessionary period. He'd wait for positive market follow throughs before allocating capital. If you're in it for the long term, you could buy this on the pullback. Interestingly, US banks are down about 21%, whereas Canadian banks (as in ZEB) are down 9%.

Largest in the category. ZBK is unhedged, but there's a hedged version as well (ZUB). He'd opt to start hedging risk away a bit more, given what seems a concerted effort to weaken the USD. Gives you diversification in the US banks, instead of Canadian banks, as it's a different market and different economy. 
 
Banks are very sensitive to the economy, and we're in a recessionary period. He'd wait for positive market follow throughs before allocating capital. If you're in it for the long term, you could buy this on the pullback. Interestingly, US banks are down about 21%, whereas Canadian banks (as in ZEB) are down 9%.

Not devastating, but there are other things to do with capital. With the current macro economic situation, keep this allocation smaller. Follow through in the markets and some outperformance in energy would be encouraging. It's probably going to be a volume game, not a price game.