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

Talked about his book coming out entitled 'Bull Shift', bull meaning market that's rising and shift meaning diversion of attention. Financial Services Industry tends to divert attention to the optimistic side of things but we need to be aware of potential problems in today's market. Advisors should be alerting clients to these problems. Markets today are especially worrisome since they have been high for some time. He has been expecting a pullback for some time and believes that it will happen when rate hikes actually happen. Is advising clients to consider emerging markets and gold. Also products that pay a regular income but not necessarily part of the market.

Has just put together a structured product related to inverse participation in the S&P 500. It goes up when the market goes down and down when the market goes up. This would be as a hedge against a coming pullback which he thinks will be more in the U.S. since the market is higher there.

Caller asked about Canadian banks. He considers them very resilient and able to provide a steady and growing income stream. Maybe they won't do astonishingly well but are good long term. Not as worried about them as he is about other areas.

Question was Ultra Pro (PRO). Didn't have enough info. Not sure but probably an inverse product, therefore for trading not long term.

Question on housing. Rate hikes will affect housing. We are in an 'everything bubble'. Feds have had our backs for 21 months and when they start to normalize this will mean concern for the markets.

Question on inverse ETF's. 'Trend is your friend'. These are trading products. Markets go up and down daily and you have to reset every night.

Question on a new ETF product called SHE. This is in the gender diversity area and holds companies with more gender diversity which have been shown to do significantly better. It is a niche product. He likes it - hold to a maximum of 5%. It's overdue and will continue to be proven.

Question on Mutual Funds or ETF's - which is better. He prefers ETF's since they are more rigorous with their holdings, have a ticker symbol and are generally cheaper.

sports betting stocks Last Saturday, online sports betting went legal in New York state, the most populous state for sports betting. But sports betting stocks has been dreadful; Draft Kings was the worst stock on the 2021 S&P. Why? This industry is too competitive. Also, marketing costs in New York state are very high. There needs to be consolidation in this space before you should invest.

Educational Segment. How can U.S. engineer a soft landing? Inflation pressures are building and Feds are behind the curve on that. Ability to ease has never been more challenged. 10-year U.S. bond yields are rising. A yield of 3% would in his mind crush the economy. If the yield curve remains steep, general conditions remain ok. If it goes flat to inverse, it pretense a recession. Keeping the yield curve steeper is going to be better for value over growth.

Believes investors should not be concerned about small interest rate increases. Marginal increases in interest rates won't affect business decisions. Rising interest rates is a good thing, as it signifies a recovering economy.

Investors should continue to focus on good companies with quality products & services to prepare for rising interest rates. Semantics about "growth/no growth" stocks won't affect quality companies over the long term.

The Fed will have to move quickly to contain inflation, but that will pressure stocks, as we saw today, especially the Nasdaq. Stocks without earnings are getting hammered, no surprise, while those with tangible sales will fare better. Housing stocks are already getting hammered, but higher rates are good news for the banks.

Disruption to markets by the Fed. 2022 will be interesting. Expect more volatility. The last couple of years have provided exceptional returns, and we shouldn't expect the same. Yet there's no reason not to expect a good year, as corporate profits remain very strong. Though the Fed is positioned to raise rates, his base case is we'll see a lessening of inflationary pressures. This will let the Fed ease up on the brake and not be quite so aggressive in raising rates. Minutes yesterday were not any different from what was telegraphed in the fall. They are more hawkish, and we can expect increased rates in 2022, but not to the level of extinguishing a very good economy. Have to be careful that the Fed doesn't make a policy mistake in being too aggressive, putting the economy into a recession, though likelihood of this is low.