It is good the momentum trade is down. It has been a overcrowded trade and doesn't distinguish the good from the bad or valuation very well. The best trade now is the low to no debt companies with positive cash flow. It is perfect in a rising interest rate environment as long as the PEG ratio for them is decent.

Like all banks they always project the optimistic even if they know the future is not optimistic until they can't deny a downturn. In reality, the bank of Canada is worried about a real estate price decline and rightly so. Canadian housing has been undergoing asset inflation for years now without a dramatic raise in rental price increases. This leaves Canadian real estate as a very risky play. More risky than US real estate.

Home prices continue to be unaffordable. Sadly the rising interest rates lower home prices but keep them unaffordable as the discount is eaten up by higher interest rates. Eventually this will give way to lower home prices, but it will come with an economic downturn. Thus less people will be able to buy houses then. Eventually the leaf will turn and we will be in another expansion.

As you can see, housing doesn't get better in an end cycle for a very long time and home prices don't get affordable for years. I'd stay away from housing and semiconductors until they both go through a down cycle.

The market will sell off and go into another cyclical decline eventually, however, this is not the case yet. There is potential though and the market is reacting to that. The cause is a vast widening of a trade war in which it is clear to any rational person is not benefiting the US or China. Sadly it's not even helping US steel companies. This is forcing the Federal Reserve to fight inflation caused by tariffs and the dislocation of manufacturing.

I am hopeful action will be taken to prevent this easily preventable problem. I guess I am an optimist. That said, if this impediment is removed or at least tamed down the market is good for a bit more of a run as is the economy.

Needless to say, cryptos will not protect you from economic declines.

The issue is as interest rates rise it hurts gold because gold doesn't pay a dividend or interest and there is a carrying cost. I don't expect gold to perform extraordinarily well although foreign countries will keep buying it to hedge against their even worse currencies which are falling to the dollar and gold.

Whether a recession will happen or not is up to the Federal Reserve and Trump. The trade war with China is biting into US steelmakers as well as Caterpillar and US manufacturers. It is also forcing the Federal Reserve to hedge against inflationary pressures caused by tariffs. The Federal Reserve's rate raising can cause a recession, but their hands are a bit tied due to the trade war and due to Trump looking like he is trying to manipulate the Federal Reserve which would undermine the Federal Reserve's position if they look like they are kowtowing to him.

Indeed, Trump and the Federal Reserve announcing at least a delay in the trade dispute or even a reversal of some tariffs and the slowdown or stopping of rate increases would be good for the economy, good for both parties, and good for the market. It would be a true win win. What we are seeing right now is the lose lose situation which sadly is not shrinking the trade imbalance with China, not helping US steelmakers, hurting the global economy, and causing inflation.

It is good to see some correction in FANG stocks. I'm not sure how long it will last, but I expect Google to lead them upwards given it has most reasonable valuation of the bunch if you don't add Apple in it.

It is true there are a lot of dumb people with dumb reasons to be in any given stock. If he is a long term investor he will make out well with his investment. Is that luck? Maybe. Needless to say the biggest and an even worse reason for holding Google is that it is in FAANG. There are lots of good reasons to hold Google and hopefully they will be realized sooner or later like having a great PEG ratio, being incredibly cash flow positive, having a huge cash hoard, having an incredibly stable and growing revenue generation business, being king of the hill in its market, and always aggressively looking towards the future and investing in it.

The guy couldn't have picked a better stock so kudos for his lackluster reasoning. At least it was enough for him to pull the trigger and invest. I wish him luck. I think he already got a boat load with his pick.

It gets scarier the higher rates go and the bigger their debt load gets without them being profitable. This is why Apple and Google are better buys. Low debt will define the long term winners as interest rates rise.