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

In mutual funds, what is the difference between the ones banks offer and other options? There is not a big difference in the pricing of the bank products versus the others. He would recommend that instead of a mutual fund, you find a good index fund.

Difference between iShares MSCI EAFE IMI Ind (XEF-T) and iShares MSCI EAFE (Cad Hedged) (XIN-T)? They are both EAFE so both are tracking Europe, Asia and the Far East. XIN is currency hedged and XEF is not. Both are excellent products. (See Top Picks.)

Oil and gas ETF or own the stocks? He generally does not like the oil and gas sector right now so wouldn’t want to recommend any of them. Feels oil has seen better days and we are now range bound at around $90 a barrel. However, he does like energy infrastructure.

Markets. Looking for Short, Sharp and Shallow pullbacks to continue in the US market during 2014. Markets are relatively fairly valued. Competitive asset classes aren’t that compelling. Also, people have seen a Bull Market for the last 5 years so they want opportunities to move in. When they see the market correct back 4%, 5%, 6%, they start to think about entering and that keeps the correction contained. While we are rewarded when markets do well, we have to understand that uncomfortable parts of the market are part of the market. To react in those uncomfortable parts of the market, the worst thing is to think they are not going to occur, which would just set you up to be hurt. As we see the cycle getting a little old, earnings growth is going to be a little more subdued which we are seeing coming into 2014. At the beginning of the quarter, the market was expecting a 4% growth in 1^st quarter earnings over last year. By the time we got into the quarter, it had actually gone negative. Often people guide down and then the market outperforms and surprises on the upside. Expects we will end up with a 2% growth year-over-year of earnings in the 1^st quarter, but there is an opportunity for that to increase as the year goes by, pretty much on the back of revenue growth which seems to be increasing by a little bit more.

Markets. We have seen outperformance in Toronto versus the S&P 500 and he thinks this will continue. The S&P outperformed the TSX for over 2 years up to last summer and we had been outperforming it since then. There has been recovery in the energy sector and the banks, starting in the early part of last year, started to perform a lot better. Also, infrastructure type companies in energy have done very well. Expects this outperformance to continue for the balance of the year. Certainly the decline in the Cdn$ will also give quite a boost to many Canadian companies. We could have a short-term correction this summer, but looking for a strong finish for the end of the year.

Markets. There will be a little bit of cycling out of the more liquid REITs since we had such a run up this year. There is more value if you go down in the size of REIT, as long as it is good quality. We are not at risk of a major decline. Foreign investors are coming in and buying REITs as well as properties. Canada shines as a place for stable returns.

Markets. Thinks stocks will continue to do well, despite ‘Sell in May and Go Away’, although it will be more volatile. He would look for a pullback and then the market goes back up. Thinks rates will go up a lot slower than people think. The US is in a faster recovery than Canada. People went through a massive recession unlike anyone had seen and they want everything to quickly bounce back like normal. We have slow growth,, but companies are in better shape and you will see top line growth in the next couple of quarters. It will be a bumpy ride over the next little while, but the outlook over the long term is very good. Dividend stocks are important so he favours them and likes consistency in companies also. Some of the dividend stocks are trading at the high end of the range so won’t move up as fast as they have over the last 3 to 4 years.

Markets. CPP – taxes need to go up and benefits have to go down. Around the world, most government retirement plans are grossly underfunded. The vast majority of people are not saving enough for retirement.

Educational Segment. Financial Literacy. BMO partnered with an educational organization to talk to grade 7 students about money. It’s about knowing what costs you are incurring (fees and interest) as much as about attitudes toward money. Http://TalkWithOurKidsAboutMoney.com

Markets. Stocks are still the best option for the year. Economic growth globally is picking up. Thinks we are getting closer to a pullback. He has scaled back on some of the areas where he would tend to want to buy back into on a pullback, e.g. bio techs, internet stocks, high tech, energy. We are seeing a flood of foreign money come into the energy sector. Nickel has probably been the commodity of the year. Global manufacturing looks good. There is plenty of risk: Valuations are high, the interest rate backdrop, political risks and the seasonal – ‘sell in May and go away’.

Markets. US economy is slowly improving as he thought it would. The only breakdown in markets is that the NASDAQ went through its 50 day and approaching its 200 day moving average. It will probably hold, but you never know. If it broke he would be more cautious. Russia and Ukraine are the biggest wildcards. Europe and Japan seem to have faded in the mean time. He looks at water, industrials and agriculture as being the most promising.

Russia / Ukraine sanctions and their effect. Ag stocks could be impacted if the crisis is long. He feels they will do as much as they can until the US mid-term elections. This is his one major caution on markets.

How to take advantage of new US legislation regarding rail car safety. WAB builds locomotives and rail car safety equipment. ARII-O, KLS-X and TRN-N are in that business also. He believes keystone is dead.

Gold. Feels it will go higher. Russia meddling in Ukraine will help this. $1400-$1500 is doable this year.

Markets. He is bullish on the markets, but the whole "Sell in May and go away" thing may come to fruition. The market wants safety and yield. It is setting up for some sort of correction. He is at about 20% cash.