A Comment -- General Comments From an Expert (A Commentary)

OPEC to cut production by 2 million barrels a day Long-term, energy and healthcare make sense. Earnings season will be difficult. Last week may not be the bottom. Be diversified in energy--in oil, natural gas, producers, refiners and pipelines. There is conflicting policy globally, creating a lot of stress on future supplies that can't endure. We've never seen this.

She and the market are concerned that companies will guide down in the coming earnings market. She's also keeping an eye on the US Midterm elections. It's a mixed story in the coming weeks. She expects continued volatilty, so she's cautious, until we see inflation move down.

OPEC to cut production by 2 million barrels a day She's slightly underweight energy, but is targeting the oil refiners. Also, the integrateds are a steady way to play energy.

Markets. Challenging year. During times like this, step back and look at your time horizon. Not time to panic and throw in the towel. A lot of the work should have been done ahead of this 20% drawdown to make sure you own high-quality businesses, lots of cashflow, still paying or growing dividends. Next few months are going to be quite volatile.

Deploying capital. If your time horizon is north of 5 years, this is a great time to start adding to your portfolio. A lot of names he's followed for years, but they've now come back into that valuation range that he considers the Buy zone. Have to be patient. Hard to call the bottom, difficult to time the market. Macro picture is still murky. If you're not in a hurry, you can sit back and wait for some of these prices to come to you, which they still might.

Cash weighting. Higher than normal. He looks at broad asset allocation, not just equities. For the first time in many years, cash is a reasonable alternative. GICs are paying reasonable rates, and fixed income is looking quite attractive. You can find some high-quality, low-risk bonds that are paying north of 10%. Periods of stress create interesting opportunities. He's looking to lock in some income over the next little while while volatility remains high, which should result in both income and some capital gains.

Canadian banks. Never likes to tell clients to sell their banks. But if you're sitting on cash, waiting to deploy, it depends on your time horizon. If your time horizon is greater than 5 years, this is a great time to invest in bank stocks. Yields are very attractive, valuations have checked back. But the Canadian banks are going to have a rocky ride for the next few months. Likely to be more estimate revisions on the negative side, with the rapid tightening of interest rates. We haven't seen the impact yet of higher rates. Going to be some tough months as people renew mortgages. This will potentially increase credit loss provisions, capital markets have been very slow. Tough for banks to generate above average returns. You could hold off for a few quarters to see how things go. But he'd tell a young investor with a long timeline to start throwing some money at the market, as it's so difficult to time.

Stocks without dividends. It depends on the strategy. He has an all-cap portfolio that doesn't require dividend payments. One of the common threads across his 3 strategies is to own companies with good balance sheets that generate lots of free cashflow. If a company doesn't pay a dividend, there's going to be more volatility with the stock that you have to pay attention to.

Stock buybacks. Tax-efficient way to give money back to shareholders. He'd prefer that companies deploy capital on acquisitions or internally to generate a higher ROE, but it's a reasonable way to provide capital to shareholders.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Historical Changes in the US Dollar and What to Expect Going Forward. The US dollar index has been screaming higher this year amid rising interest rates and global economic uncertainty. Although, this is not the first instance that the DXY has risen ~20% in any given year, and in fact, previous instances that have seen this type of increase have been associated with major global economic events. Clearly, when the dollar is rising, traditional asset classes are going to witness headwinds and strain. This strain on traditional assets is quite evident with the S&P 500 down (~25%) and the US dollar up ~20% this year.

You need a strong stomach in this market--stocks, bonds and real estate have been falling in unison, not since 2008. Central banks were misguided in thinking that people would come off the sidelines and return to work, but many are not coming back. Hence, the banks are creating demand destruction through rate hikes. He's staying defensive.

Believes US Federal Reserve will slow the rise in interest rates now that the USA 10 year bond yield has reached 4%. USA 10 year bond yield of 4% provides stability to market. Energy prices will also weigh on US Federal Reserve decision to raise/decrease interest rates going forward.

Educational Segment. Market equity indicator - "Berman's Call Pro-Eye" indicating the market is oversold. First time equity market has been oversold since Great Financial Crisis. Short term (2-3) months - now is a good time to buy. Risk is low given indicators and market is setting up for a rally.

In the future, current equity prices will be seen as a buying opportunity for high quality business models. Inflation, war & rising interest rates putting pressure on markets, but also creating buying opportunity. Good time to be entering into the markets for the long term investor. Believes timing is most difficult part of investing successfully.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. What is the US Dollar Index (DXY)? There has been a lot of news and headlines this year around the strength of the US dollar and its negative impacts on risk assets. The value of a currency can only be measured relative to the value of some other currency or asset, and the forces behind that typically depend on the strength of the economy backing it and that nations interest rate. For example, the USD/CAD exchange rate measures the strength of the US dollar against the Canadian dollar, and if this exchange rate increases it means that the US dollar is strengthening relative to the Canadian dollar. The reasons behind this strength can depend on the robustness of each economy and the interest rates that they have to offer foreign investors. The US Dollar Index (DXY) measures the value of the US dollar against a basket of six foreign currencies. Those foreign currencies include the Euro, Swiss franc, Japanese yen, Canadian dollar, British pound, and the Swedish krona. The euro is the largest component in the basket of currencies, representing just over half of the basket. The index started in 1973 with a base of 100, and the values since then represent the US dollars’ strength/weakness compared to this base.