Mike Philbrick

Particularly in Canada, the word "tariff" is hitting home. He believes the skepticism is misplaced, as there are underappreciated tailwinds. We have strong household and corporate balance sheets, and there's potential for a pivot to a dovish monetary policy. These things can surprise to the upside.

Starting to see tariffs work their way through negotiations. The lack of clarity is being cleared up. Layer on top of that the accelerating effect of AI, which can both increase productivity and exert a deflationary force across industries. The long-term case for growth becomes pretty compelling. Odds of a recession are overstated. 

You have pretty unprecedented amounts in money market funds sitting on the sidelines. It's true in Canada, and in the US that amount is $7T. Those funds are collecting the yield, but if yields were to drift lower then those assets would start to flow into risk-on assets rather than risk-off assets. This is where he thinks most people are under-anticipating the opportunity that things might actually work out better than they expect.

It's an under-owned bull market. 

If things start to resolve positively, it would seem that many investors are underexposed. This market has been a lockout market, not letting people get in. Pullbacks have been very short and have prevented folks from buying the dip. This situation is probably going to continue.

Important point that yield does not equal total return. 70% exposure to the big 6 banks with an option overlay. Covered calls work best in sideways to slightly up/slightly down markets. Sacrifices upside. Up 23% over last 12 months, including dividends. 

But what was the cost of writing those options? ZEB, BMO's equal weight bank ETF, is up 33%. That's 10% upside given away because of the way call-writing works (get income today, but give away upside).

Not really for growth-focused investors, more for income investors. One strategy would be to hold some of this, but blend it with an ETF that doesn't write calls.

Important point that yield does not equal total return. Covered calls work best in sideways to slightly up/slightly down markets. Sacrifices upside. 

But what was the cost of writing those options? Compare it to XUT, which is up 21%. Whereas UMAX is only up 7%. Because of the lower volatility in utilities, you have to write tighter options (closer to where the price is today). This results in foregoing more of the upside.

Not really for growth-focused investors, more for income investors.  One strategy would be to hold some of this, but blend it with an ETF that doesn't write calls.

Good exposure to the space without using covered calls (which sacrifice upside potential).

Good exposure to the space without using covered calls (which sacrifice upside potential).

Really, really likes the sector. You're not late to the party at all. How can you not like AI, war, aerospace, and cyber all in one? MER is 50 bps. Top holding is PLTR, which has been the true market leader of this market (AI + war). That area will probably see continued benefit moving forward. 

This is more an "explore" piece of your portfolio. This sector is pretty bullish; pullbacks are few and far between, so gaining a position can be tricky. Start small, and build a position as it becomes profitable for you.

Very interesting play for global diversification, off the beaten path a bit. Globally, we see a lot of the world outperforming the US. Australia is, much like Canada, a resource-based economy. And those economies should see a bigger uptick if everything goes as we might expect (bit more growth, bit more demand for commodities).

See his Top Picks, for an idea to get away from US markets.

Single-stock, high-income, covered writing. Probably see some pretty good yield. There are also versions for AMZN, NVDA and the like. Launched in US, mimicked in Canada. Challenge of these in the Canadian version is that they're pretty small at the moment, and it's just a single stock. Will have volatility, much higher risk. 

As well, you'll be taxed on the income. If you just own the stock, don't necessarily have to take the gains on a regular basis.

Dominated by core US large caps (top 20 market cap), plus covered call strategy. Doesn't see any issues with the component stocks, future looks great. The more income you take, the more you limit the upside. MER is 85 bps, higher because of the options strategy. Small position only.

In Canada, unless it's a corporate-class-structured ETF, it will distribute the income and capital gains every year.

In the US, there's a different tax structure. They wash the gains out through market-making, and you don't get the capital gains distributions. Instead, the unit value grows; upon sale, you report that capital gain. This is an advantage (not very well understood) that Canadians have in buying an American ETF. In Canada, the corporate-class ETFs tend to do the same thing.

Many times, the fees of an ETF in the US are lower. But not by much anymore, and it's not always the case.

If an estate is very large, owning US securities can subject you to some estate-law rules. But the estate has to be pretty large for that to happen.

Double exposure to the natural gas market. Canadian and US stocks, in general, have a volatility of about 15%. The volatility of nat gas is in the range of 80%. So this one is a wild monster to deal with.

He's actually a bit bearish on energy because of the stated intention of the US government to pump oil and nat gas to lubricate the economy and economic growth. More production will hamper price increases. Secular pricing will be lower, spikes will only be cyclical.

The other side is that we have lots of AI power demand. Longer term, we could maybe see so much demand that prices get up off the floor.

Absolutely stick with this idea. Story for gold has actually gotten stronger. Central banks have been buying 1000 tons of gold a year for the last several years; up significantly since Russian invasion of Ukraine when US confiscated Russian assets. That event motivated many countries to look for a new reserve asset beyond treasury bills in US dollars.

Fragile geopolitical landscape lends itself to owning gold as a diversifier. Potential USD weakness is also a tailwind. Bullish trend for gold has lots of legs. 

See his Top Picks.

Waiting for the market to broaden out, as it would if the tariff tantrum subsides and the Fed eases. Higher interest rates are really deleterious to small- and mid-cap companies and their funding requirements. AI wave will also provide productivity boosts. Stick with it.