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

GICs - Interest Rate Outlook. If you buy GICs over equities because of volatility, they make sense. If you buy them for cash flow, GICs will not give you the same cash flow as equities if you can live with the volatility. There is not the opportunity for share price appreciation in equities over the next few years, however. He likes the real estate space in private equity.

Market Outlook - It has been a long term trend running deficits since the Financial Crisis. Populist programs, like the one Mr Ford is trying to do, make rating agencies nervous. It doesn't seem to be a problem now but it could be one down the road (5 - 10 years) if interest rates move up and interest costs eat up a larger part of the budget. The market is creating a lot of opportunities. Interest rates have been moving lower since the return of volatility. The economy is robust. Income levels continue to grow. Trade tensions are backing off a little bit. Underneath the surface, there are very good companies growing rapidly and trading at reasonable multiples. Like Google is down 20% from its highs trading at 18 times earnings. You don't even need to try to guess where the bottom is. There is value out there and if you have a relativity long term horizon (say 5 years) you can make nice profits.

What sector would you select to invest money now? - Financial in the US is in a bear market. People are worrying about yield curves and all that non-sense. If you have 5 years view, being paid 3plus % yield with a growth above market rates and a strong balance sheet and diversified platforms. Quality businesses that are on sale and trading at reasonable valuations. You can expect to make 10%/year over the next 5 years.

Opinion on Canadian Banks - They own Bank of Nova Scotia (BNS-T) which just bought recently. Canadians are heavily exposed to financials and real estate. Canadian Banks have to find new avenues for growth as they just can't keep lending to Canadians that are one of the most indebted people in the world more and more money.

Do you believe we are entering into a bear market ? - The S&P 500 is not down 20% so it is not technically in bear market territory. But who cares? In certain areas we are. But profits are going up, interest rates are low, the economy is strong, employment is strong and stocks are trading at 14-15 times earnings. That is not unreasonable. Don't seem to see any sign of a recession in the next 6-9 months. Could it go lower? Sure, we could have a flash crash. He invests in good companies for the long haul. he doesn't have a clue what is going to happen in the next three months but you can buy some stocks and make a decent return with a five year time horizon.

What is your opinion on REITs for a long-term investor? - If you want to have income REITs are fine. They can't grow any faster. Some are stuck on stuff. You have to be careful with some. Some are trading above NAV in the real world.

Market Outlook In October and November he saw concerning technical indicators. This is both in Canada and the US markets. He watches moving averages and tracks technical monitoring service companies views.

It's been a rollercoaster lately. It's been tough. But always take the long-term view. He's a "decade" trader. This year could be a write-off, the market this fall having sold off January's highs. It's a buying opportunity--he may wait until January to buy. The market fundamentals say the economy is doing well across the board. It comes down to investors feeling nervous who are overreacting to headlines. Fundamentals say that there's still room to run. PE ratios are lot more reasonable now. He would put money to work now. Buy into weakness. There are definitely some good stocks out there. Green investors are less interested in the state of the market, but rather the state of the enivoronment and climate change. They feel pessimistic.

Canadian-dollar hedged green ETFs? Aside from the global water one, CWW, there isn't one on the TSX. (Mackenzie does offer a mutual fund in the F series.) Green ETFs are traded on US exchanges--Google Nobert's Gambit to lower the cross-border conversion fee.

Corporate profits need to lift this market. U.S. ones have had a strong YTD at over 20%. In 2019, they will increase 8%. That's positive if that happens. Markets will be higher a year from now, but the trade war is a serious overhang. Seeing car tariffs removed will certainly be positive. The detainment of the Huawei CFO is an obvious negative, so we must keep an eye on that. Executives are now hesitant to travel. Consensus is that Powell will raise U.S. interest rates next week and three times in 2019. But Powell has said factors could slow the economy and he'll be data-dependent. Now, the BOC has adopted a dovish tone. This means that interest rates in both countries will not rise as quickly as expected.

Today, we gave back impressive gains in the morning after Trump had a closed-door meeting today. That rattled investors after the day opened strong. We finished flat or in the red. Investors are now amplifying any bad news and muting the good. That's in contrast to earlier this year. For investors, don't emotional. He holds a lot of cash, from 40-60%, though it isn't fun to hold this much cash. Markets are unnerving now. Breaking news: Huawei's CFO is granted bail. He certainly didn't like reading that Huawei news last week or today's news of a Canadian citizen arrested in China. Canadian companies like Lululemon could face serious resistance selling in Chinese markets. But he thinks this is all a lot of fury that won't stick, and creates buying opportunities.

Huawei CFO just released on bail; she must stay in Vancouver It doesn't help resolve US-China trade talks, despite White House denials that it is. This is already spilling over--Bell and Telus have invested a lot in the Huawei 5G wireless network and it could cost a fortune to rip out.

Are algorithms controlling volatility? He's suspicious. The last few declines including the brief one in January was an algorithm-driven trade. At 10:30 or 2:30 every day is how the market will close. It's like the retail investors trade until 10:30, then the big institutions come in 10:30-2:30--there are many theories about that. That January day felt really well-organized, enough to trigger his suspicions. Regardless of the cause, you're losing money. Use stops. Alogorithms will rule this volatile period until at least February 2019. He also suspects alogos in Twitter feeds which are activated whenever Trump tweets (but he has no evidence of this).

Market. BREXIT: The UK cannot afford a no-deal exit but like all of these things, it will go down to the wire. There is uncertainty and markets don’t like it. You want to be long the British Pound. With China there is the arrest of the CEO of a major telecom company from China. There is no solution to the trade issue and this is just more of the problem. The Fed will raise rates in the US on the 19th. The global economy is still strong. The S&P is undercutting the October low. Some think we are one foot into the recession starting. Perhaps the lows will be broken in February.

RESET Preferreds. Now the expectation is that the next BOC move could be a cut be he doubts that. We will likely get two raises into next year, and in that case he would be worried about the reset preferreds market. It will probably be a bear market for the for the next two years.