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

Tech stocks. If you look in the US, he struggles with Amazon's valuation. He is currently looking for tech exposure outside of the US. Looking at semiconductors in Asia, such as Samsung. Use your money wisely and look at areas of the world that has been traded less. There are lots of opportunities.

Consumer stocks. Added Louis Vuitton recently in the international portfolio. They recently acquired Tiffany. Other consumer names have had a nice run as well. An interesting space. Everyday staples have also done very well. Many of these companies are bond proxies.

Biden announced a major stimulus package, but markets rolled over Friday. Puzzling--the market got what it wanted, yet sold. Why? Biden met, not beat, expectations. Also, bank earnings disappointed Friday.

How will the pandemic change your investing style? Not likely to change his strategy. These disruptions happen. It's been hard on people, but there have been pandemics before, and there will be again. Currency, interest rates, and commodity prices all go up and down. Choose companies that have resilience, with a business model that can survive adversity. He selects quality companies. Investors will have to spend more time doing due diligence.

Science is telling us there may be a worse virus to come. The 1918 influenza epidemic had an impact on the economy. Influenza in the 1950s and again in the 1968 recession both affected economic activity. Businesses need to be able to adapt. For example, a media company's business model is more resilient since people can work from home. This allows these businesses to take market share. There are always concerns: SARS, Covid, terrorism, recessions.

Index ETFs. He would never recommend an index ETF, because you have to take the good with the bad. So you get a company like Intel, that keeps surrendering market share. He'd rather own companies that are taking market share or pick and shovel companies that help others take market share.

Will there be a recovery in the economy? It's going to be a bumpy ride. Covid is in control socially and economically right now. Markets always look forward 6-9 months, so he's optimistic of a path towards good returns for equities, despite bouts of volatility.

Interested in retail or travel? Some of the cyclicals, including retailers, consumer discretionary, travel, leisure. They've moved higher since the vaccine announcements. Going forward 12 months out, they'll be positive.

Are dividend stocks vulnerable with the bond yields moving up? He likes dividend growers over dividend payers. As interest rates move up at the long end of the curve, that can affect some of the flat dividend payers.

The market is hostage to the Covid vaccines--Trump has made too many steps to distribute vaccines from the manufacturers into people's arms. The Feds have no real plan. (He just got his shot today.) Biden could deploy the army to help vaccine. We have enough vaccines, but a poor supply chain.

Take profits Millions of young investors have started buying stocks, not just because of zero-fee Robin Hood, but these folks are having fun buying tech like Shopify. He's been waiting 20 years for retail investors to return, but he's torn seeing these young investors embrace stocks. The last 9 months have seen a strong bull market, but remember that things can't always stay this good. Are we seeing mania in investing? A bubble? King Midas in Reverse. For instance, EV stocks will get too big and run out of juice. Discipline trumps conviction. Discipline means taking some profits off the table instead of letting it all ride. No, don't dump your entire position, but don't be greedy. No one ever got hurt taking a profit.

Markets started the year euphoric and he sees 10% upside to spring and summer. The election and vaccines mark good news, bad news out of the way. In US, retail investors are throwing money at momentum stories, which is a big vulnerability. He wouldn't be surprised with a pullback. Bond yields increasing: he sees the yield curve climbing steeply. Doesn't see negative rates. After Covid, this economy will be incredibly strong driven by pent-up spending (savings rates are up). This leads to inflation and reflation which he hasn't seen in years. He sees a risk to bond prices as rates climb--the short end will be low while mid- and late-term will be higher. This could lead to inflation that we haven't seen for decades.

Real return bonds Inflation will go higher, so bonds are a great way to participate in this. Remember that when you buy this, you buy a negative yield which offsets inflation; if inflation returns, these bonds will rally. It's complex.