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

Semiconductors. The industry will be the building block of growth going forward. SMH or SOXX are good plays across the board. INTC is going to be building its own facility. Supply shortage has been a wakeup call to companies, and many are now going to produce their own chips domestically. A lot of earnings misses this year have been due to those shortages.

Wealth managers took profits on tech stocks today after tech's recent rally. The rest of the market today saw a catch-up in the Dow and S&P to tech, and this catch-up will continue..Jerome Powell's nomation by Biden to continue as the chair of the U.S. Fed was no surprise. You could buy on tech weakness, betting that those stocks will sharply rebound, but he'd rather buy companies that reporting strong quarters recently.

It's crazy that Americans sell stocks when there's a lockdown announced in Austria just because of some vaccine hold-outs. Sure, Covid remains a threat, but Americans can now get boosters and we're in the late innings of this pandemic. Those who sell open opportunities for buyers, particular in travel and leisure stocks. Sellers will get left behind, because markets will grind higher to the end of the year.

We have seen a lot of market top out earlier this year. There has been internal correction since then. Large companies were seeing all time highs. Now we are seeing changes in technical attributes. Small caps are seeing more interest.

Cannabis. Entering new markets through new states legalizing it are a tailwind. There seems to be some move on the federal level to legalize cannabis in the US. Other markets like Europe are seeing some moves. Germany has moved to legalize recreational marijuana. Canadian companies will be able to capitalize on their expertise.

Technology-healthcare combination will continue to move forward and accelerate. This will provide better health outcomes and optimized care.

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Strength in consumer spending. Consumer is quite strong. It's never been an issue of demand weakness; it's always been a problem of supply. Pent up demand from being locked inside for so long. Corporate earnings have been excellent, up Y/Y by 39%. Operating margins are close to a record high. This says that companies can either offset or pass through inflationary pressures. If you look at a 2-year chart, there's been a huge 25% in earnings growth since 2019. Corporations haven't missed a beat, and this is supporting higher prices.

Neglected areas of the market. Some areas are presenting opportunities, like industrials. The growth metrics get you excited, and the valuations get you even more excited. See his Top Picks.

Considering exchange rate and low CAD, sell Canadian stocks and buy American for long-term profits? Don't move from currency to currency looking for a foreign exchange gain. That's a tough game. But when you move to US equities, you move beyond the shackles imposed by an economy that represents only 3% of the wealth of the world. US has huge breadth and depth and exposure to many sectors not available in Canada. Have a broad, geographically diversified portfolio. Build your portfolio, with Canadian and US stocks, 20 of each, with a 2.5% position for each.

US equity allocation TFSA vs. RRSP. When you move to US equities, you move beyond the shackles imposed by an economy that represents only 3% of the wealth of the world. US has huge breadth and depth and exposure to many sectors not available in Canada. Have a broad, geographically diversified portfolio. Build your portfolio, with Canadian and US stocks, 20 of each, with a 2.5% position for each. Put the most aggressive stocks, with most capital appreciation, into your TFSA. Use your RRSP for a more balanced approach. Tax implications for TFSA include a 15% US withholding tax, which is not recoverable. Whereas in an RRSP, there's no withholding tax on US equities. In a cash account, you can recover the withholding tax when you file your taxes.

Fintech opportunities. 75% of millennials don't have a credit card. They pay by other means. AMZN just shut out Visa UK. This may be the thin edge of the wedge. Lean more towards fintech, but be careful, as they are pricey. Wait for a good entry point. PYPL may be approaching that.

Homebuilding cycle. Cyclicals don't last forever, but the homebuilding cycles tend to be longer. Demand is still very strong. Millennials are moving from cities to the suburbs. Interest rates are low, even if the Fed raises. As a cyclical, you always have to watch for it to turn.