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Prior to the weekend, he'd never heard of DeepSeek. As much as AI is front and centre, there are always the "unknown knowns". That is, you know there's going to be something to upset the market from time to time, but you can't predict exactly when or what it's going to be.
The market's a bit frothy, as we've seen recently, and a lot of the bulls will dismiss that. But something comes along, and people start asking a lot of questions. So there's the DeepSeek noise today. Then there's the Trump administration, where one day there's less tariff risk, the next day there's more, then less.
A lot of uncertainty in front of us. For him, it's an environment where you want to be a bit more cautious than aggressive. A bit of de-leveraging in the next few weeks or months would not be at all a surprise to him.
We learned during Trump's first administration about his style. He can be belligerent in how he approaches the market, but it's a negotiating tool and it does get people to the table. He was pretty effective last time using that as a tool, which tells you that he's likely going to double down this time around to get what he wants.
Covid accelerated a lot of his bearish concerns about debt in the world. The US debt situation isn't getting any better, and there's no scope for it to, given demographics and government promises over the years.
The idea of a DOGE and getting more efficient is great, but if you look at the numbers, they aren't going to be able to move the needle too much. All the spending that he wants to do because of tax cuts just adds more debt to the system. Eventually, the market cares; you just can't time it, and that's the problem.
Any sale triggers either a capital loss or gain. It depends on the election you made with CRA on your exact tax treatment. Capital gains are the most efficient tax treatment.
Benefit of CRA and dividends only comes from Canadian companies. So, even if you have an ETF that pays a distribution that comes from European or American companies, that dividend is treated as income even though it comes through a Canadian ETF.
He very much likes the Global X series of corporate class ETFs. They give you broad exposure to markets but don't have those distributions, so they're a bit more tax-efficient. Now, there are some additional costs in there to create those structures. As well, it really depends on your tax rate whether they're a really big benefit to an individual. More benefit to those in higher tax brackets than in lower ones.
Any sale triggers either a capital loss or gain. It depends on the election you made with CRA on your exact tax treatment. Capital gains are the most efficient tax treatment.
Benefit of CRA and dividends only comes from Canadian companies. So, even if you have an ETF that pays a distribution that comes from European or American companies, that dividend is treated as income even though it comes through a Canadian ETF.
He very much likes the Global X series of corporate class ETFs. They give you broad exposure to markets but don't have those distributions, so they're a bit more tax-efficient. Now, there are some additional costs in there to create those structures. As well, it really depends on your tax rate whether they're a really big benefit to an individual. More benefit to those in higher tax brackets than in lower ones.
VGRO and XGRO are going to give you broad, market-cap-weighted exposures.
The Fidelity factor-investing ETFs are going to get rid of some of the companies that they believe are going to underperform. In theory, the Fidelity ETF should give you a better longer-term outcome. He likes factoring a lot.
The problem with all of them is the bond side. Helpful that interest rates have normalized. But, going forward, fixed income is just not going to give the average investor the best risk mitigation. He encourages people to look at the BMO line of buffered ETFs, which give you the potential of equities with the risk mitigation that most are looking for.
VGRO and XGRO are going to give you broad, market-cap-weighted exposures.
The Fidelity factor-investing ETFs are going to get rid of some of the companies that they believe are going to underperform. In theory, the Fidelity ETF should give you a better longer-term outcome. He likes factoring a lot.
The problem with all of them is the bond side. Helpful that interest rates have normalized. But, going forward, fixed income is just not going to give the average investor the best risk mitigation. He encourages people to look at the BMO line of buffered ETFs, which give you the potential of equities with the risk mitigation that most are looking for.
When you're using factor-based investing, you're trying to filter for some of the attributes you want and exclude ones that you don't. The Fidelity ETFs are going to get rid of some of the companies that they believe are going to underperform. In theory, the Fidelity ETF should give you a better longer-term outcome. He likes factoring a lot.
The problem with lots of ETFs is the bond side. Helpful that interest rates have normalized. But, going forward, fixed income is just not going to give the average investor the best risk mitigation. He encourages people to look at the BMO line of buffered ETFs, which give you the potential of equities with the risk mitigation that most are looking for.
The problem with lots of balanced ETFs is the bond side. Helpful that interest rates have normalized. But, going forward, fixed income is just not going to give the average investor the best risk mitigation. He encourages people to look at the BMO line of buffered ETFs, which give you the potential of equities with the risk mitigation that most are looking for.
Two big factors when you talk about emerging markets. One is currency exposure. Some of these markets that have much higher inflation are going to see a natural erosion of the currency weakening every year, as they have to have higher interest rates.
If you look at what's cheap in the world, a lot has stayed cheap because their economies just aren't growing relative to the US. It's always a question as to when is a good time to get into a particular economy. Many have pointed out that EMs and Europe are structurally cheap compared to the US market. He likes them from a very long perspective, perhaps 5-10 years. But he can't tell you, with any precision whatsoever, when the market is going to realize that.
Today's not a great day for markets such as the US that are being led by big-tech, overvalued AI names. But they've been leaders for a couple of years, and that's not really going to change, despite today's volatility.
XEI will be a broader basket, while XDV would be more concentrated in the top 60 or so names. The question is do you want a bit more diversification away from the banks, energy names, and lifecos that make up the larger companies in Canada? He's always an advocate for broad diversification in portfolios. Each individual investor has to decide what they want.
XEI will be a broader basket, while XDV would be more concentrated in the top 60 or so names. The question is do you want a bit more diversification away from the banks, energy names, and lifecos that make up the larger companies in Canada? He's always an advocate for broad diversification in portfolios. Each individual investor has to decide what they want.
He has a small position, accumulating on weakness for the better part of 2024. The whole sector of alternative energy has taken a back seat with the Trump administration. The whole ESG segment has been underperforming. So it's definitely challenged. He doesn't know when a catalyst might arrive and bring this back to life.
With a name like this, you have to think about a 5-10 year horizon. As Buffett says, when there's blood in the street, that's where the opportunity is.
On energy, he's a longer-term bull in the sense that we have supply constraints. He can't tell how short-term world issues will be resolved. But as we electrify the world, the world gets more power-hungry. The need for energy production, on all sorts of levels, is huge.
Likes the natural gas exposure in this name. At this level, fully valued. Gets interesting below $40. Above $50, he's neutral. Accumulate on weakness, trim on strength. An income play; don't expect it to be a major growth part of your portfolio.
