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

China is a great example of healthcare spending expansion. In 2002, spending was around $250USD per capita. Now it's around $850. The expansion just has to continue at the pace right now.

The healthcare sector has been the whipping child of the election campaign. However, the macro environment is important. Last year, healthcare was under a lot of pressure but this was sentiment driven from macro politics. There was a shift in sentiment in Q3 earnings where any misses were bought, and beats were rewarded. Sentiment is now positive.

Market. Getting out of Bombardier: He has been one of the major sellers. He uses stops on every position. If it doesn’t work out then he is gone. This is a position he cut back some time ago. It was a big position for him. In the end he looked deeply at fundaments and price was not doing what he thought it should do and it was ultimately the stop loss that took him out. If a stock gets hurt in a bull market then there are other things to do. Don't try to pick bottoms. There are an army of unhappy shareholders that just want to get their money back out of the stock. Many markets, unlike the S&P are only just breaking out of multi-year sideways choppy markets. France Switzerland, Taiwan, Japan, for example. More and more markets are joining the rally. He would fully expect a 2-5% correction over the next few weeks. The risk/reward is in equities.

He likes software. Technology as a sector is a theme he will continue to like. IGV is an ETF you can buy to get a basket. He would like LRCX-N this time of year. These are more economically sensitive than others.

Stop Losses on Banks. He uses a point a figure chart. It takes a long time to learn how to read them. For a longer term investor, use a 150 day moving average. If you are trading above this line then it is your friend.

Banks. He thinks that this year financial services will do well but he prefers US banks. The multiples are less than Canadian and they are global behemoths. He does own two Canadian banks, however: BMO-T and NA-T. He would prefer BAC.N or JPM-N.

Where do we go from here? He's a technical guy, so the trend is his friend. Can't argue with this trend. A bit overbought right now, so we could see a minor pullback in the next few weeks, which he'll treat as a buying opportunity.

S&P 500 chart. A bit like 2017, where there was very little volatility. This ended up with lots of volatility in 2018. Looks like this again, but this time the Fed is keeping monetary policy stimulative. Unless the Fed makes a change, there's no technical sign that things are coming to an end. He's keeping a little bit of cash to buy the dip.

How do technicians deal with macro events? The trend trumps all, along with breadth. The other side is sentiment, and flows of money. He's starting to follow Twitter feeds. Short-term movements can definitely be influenced by Twitter feeds. There's no absolute answer. His view is stay with the market right now, though there may be a short-term correction.

Measurable sign for a correction. He created a rule of thumb that if a stock, market, or sector gets more than 10% above its 200-day simple moving average, it's not a sell signal, but it's another sign that things are getting extended. Reversion to the mean. Keep an eye on it, and expect a correction.

Cup and handle explanation. Everything is either trending or consolidating. Often the handle brings us back near the old resistance point. Cup and handle is just a consolidation. As soon as it stops retracing, you have to buy. You can see the formation in any timeframe, whether day-trading or over a few months.

Market Outlook He thinks the 1982-2000 rally of the Dow from 200 to 1400 points is looking much like what the market is poised to do again. You should participate, don't go fully into cash ever, as this market could march higher for years to come.

He's constructive about real estate, seeing supply-demand balance in most geographies, and things are better than a year ago with more stability in the trade environment. There's less market risk and the real estate market is solid. REITs were strong in 2019, solid; he had a 20% return. He likes the US sunbelt, apartments, and e-commerce-related real estate. There are land constraints in Vancouver and Toronto, so no surprise that single-family homes are going up. Affordability is an issue here and in condos. Also factor the strong influx of 350,000 immigrants yearly, plus students, plus overall high population growth across Canada. That's why he likes apartments.

Which percentage of REITs should I hold in a balanced portfolio? 20% is decent. Retail investors are increasing their real estate holdings. There are many advantages to owning real estate on the stock market than directly, including liquidity, diversifying holdings easily (around the world) and not fixing plumbing late at night. Also, you can buy real estate cheaper in the stock market than in the property market.