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Market. There may be a looming banking crisis here and in China. We are the two biggest countries at most risk from a consumer debt level. This is one reason that interest rates cannot go up a whole lot. The consumer is much leveraged to small increases in interest rates. He thinks the economy will slow a lot. We will see how the markets handle that this year. There is job growth in the US but not much growth in wages. There are pockets of inflation pressure building on the wage side.

ETF Diversification. Two or three products for diversification. VBAL-T, VGRO-T, VCNS-T. You have to know what your comfort level is and what category you fall into. In a retirement situation a balanced fund would fit the best. The cost on all of them is just 22 basis points. The question is if you can handle the ride. Bonds won’t protect us like they did in the past.

We are heading for a recession as the next economic cycle and this may be the fear-of-missing-out stage. He would not chase things. Be more conservative. The BMO covered call ZWE-T – more than 6% yield. It should be a good holding for the next 6 years. ZWC-T is also good – more than 5% yield.

The withholding of tax is done before distribution. The ETF gets some rebates. Interest sensitive stocks that are low volatile have squeezed profit margins. Most of the time this is a good strategy but interest rates are rising so it does not mean it will not go down.

One of the best growth stocks in Canada in the last year. This is a momentum investment. He is a value investor so it does not fit him. The 12 month target is $180.00 and we are at $190, so not a lot of optimism. A lot of this year’s news is already in the stock.

He uses ETFs like GDX-N or ZGD-T, and G-T is a big part of both of them. We are getting some false alarms but this is a bit of a break out. Inflation pressures in the coming year would be good for this stock. Inflation numbers are what are going to drive gold this year.

He likes a couple of ETFs. KRE-N is regional banks and has broken out already. While revenues go up revenues should increase for banks but the profit margin is worse if the yield curve is flattening. There is a momentum trade on US banks right now, however. The yield curve could flatten further later this year.

An Inverse ETF. Only unleveraged ones are recommended. He would use SH-N for the S&P, PSQ-N for the NASAQ and his favourite is RWM-N for the Russell 2000.

Educational Segment. Guest Tim O’Brian from DBRS. Credit ratings try to look at the most likely scenarios. They also stress test. They try to get a reading on what the fundamental business strengths and challenges are plus financial risk profile. From this they come up with ratings. A stock can go up based on fundamentals but the credit rating may not change. You can go to their web site to see all of their press releases on credit rates of companies.

Market. Dividend stocks are out of favour. NAFTA has a lot to do with this. International capital inflows are impacted. A negative outcome could send the Canadian dollar down. This applies to all Canadian stocks but includes dividend stocks. He suggests to just stay the course. The US market should smooth out. You are getting a lot of opportunities to get into these stocks. You can get a yield of 4%+. He has been increasing his cash position from fixed income and is redeploying some of it into capital markets such as into ENB-T.

He is constructive on the oil price. As demand season picks up here and as differentials narrow, it will be good for them. The free cash flow is going north. They are through the Horizons build. They had a 20% dividend increase. The stock is down year to date, so it is a good level to be accumulating. (Analysts’ target: $51.94).

There are a lot of things to like with a company that has done 12% total return since 1952. It is a spectacular opportunity to own it at these levels. A 10% dividend increase is at the low end of their guidance. The interest rate impact will be temporary. (Analysts’ target: $56.42).

Underlying everything it is a great business. It has been building a base since 2015. This is a good level to be buying the company at. They continue to diversify in brand and geography. It is about parts and service, which is recurring revenue. Almost a 10% free cash flow. (Analysts’ target: $26.00).

(A Top Pick Jun 27/16, Down 18.16%) It was interest rates. They need to sell some assets for their funding plan. The market has never been better so he is not sure what the problem is.

(A Top Pick Jun 27/16, Up 0.24%) The oil price is up 10% since then, so this is surprising. He would be looking at it at these levels.