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

Risk. You have to know your sleep at night point. If the market only pulls back 5% if you are going in slowly, you get some at 3% down, some at 4, 5% and so on. The Fed tapering could occur in January and that will be an opportunity. But we may make gains before then.

US equities in TFSA? If you get dividends, there are foreign withholding taxes. You would not pay them with Canadian stocks.

Largest International Banks. ZUB gives equal exposure to US banks. EUFN is international banks outside of North America. He doesn’t think the crisis is over and EU could break up within 5 years.

ETF for American Banks in general. ZUB is currency hedged 100 equally weighted banks in the US. 1.5% dividend so it is about capital gains.

Educational Segment. Sleep at night portfolio is targeting 4% yield, and diversification. ZWA gives Dow with a covered call overlay so it gets the exposure but gets the yield up. It is a fund of ETFs. He is 44% US $ exposed. SDIV is a global dividend mutual fund that he is buying. About 7% yield. It’s beta to the world is about 1.

Markets. Believes we are in a place where we will have a global synchronous expansion. This should be good for Canada. Expects long term increase rates to increase. You want to be in plays with more growth. Consumer discretionary is a good place to be. Near term, the unemployment numbers are improving in the US. With Taper talk going from talk to action, she thinks it will actually occur in March at the earliest. Thinks this has already been factored into the markets. Crude oil she thinks will hit $90 and be an intermediate bottom.

Markets. It has been a pretty good year overall. TSX is up about 10% and the US is up unbelievably at 20% plus. If you look a little deeper into the markets, it is sort of a have and have not market. Resources, energy, materials and mining are not doing so well. He is participating a lot in the US and is continuing to expand his holdings there. When you have a market like this, there is always a concern about what is driving the market, is it just cheap money from central banks? However he is still pretty positive the way the underlying economies are still growing in the US, Europe and Japan.

Markets. S&P 500 had a 27% rally, which was somewhat surprising. A year ago, there were very few strategies who could see that strong a move. Market looks a little stretched right now but it is still cheap on a long-term basis, particularly compared to bonds. You can still make a long-term argument for stocks. Feels sentiment has gotten a little bit too placid. Too much complacency. You worry that there could be a pullback at any point in time. He is still overweight equities, but not as much. His average balance fund is maybe 110% of its normal equity weight. It was 125%-130% a year ago.

Economy. Likes the global dynamics. North America looks fine, Europe is recovering, China didn’t hard land like people expected and Japan is a wildcard to the upside. Emerging economies are not as bad as many people expected. Interest rates are going to stay low.

Markets. The gains in the markets are justified and there is no bubble. Probably in May of this year, we were at a valuation in the S&P 500 that was equivalent to 1992, before the bull run between 1992 and 2000. The US went down a lot and now it is coming up from the lows of March 9, and to everyone it looks like bubble because we have gone so far over a period of 5 years, but really in terms of valuations we have always been here in a normal market.

Economy. Thinks we are in a secular bull market on the US$. The last time we were in a secular bull market in the US$ was back in 1981 to 1986. Bull market inequities occurred between 1992 and 2000. The world of investing has become global. As the US$ goes up relative to all the other global currencies plus, then you’ll see valuations compared to all the other global markets and people are going to start allocating large portions of their portfolios to the US. This will probably come in the form of buying SPYDERS, which are large Cap Equities, which is his playground.

Markets. With markets at record highs, not so much in Canada, but certainly in the US, with profits at record highs, low interest rates, low inflation, and with potential for profits to go higher in 2014, markets are reasonably priced. He is finding great opportunities, mostly in the US. Canada is too narrow a market and he feels he is fully invested in the Canadian market. Likes companies with growing profits, companies that are trading P/E ratios less than the overall markets and companies that have been beaten down. Markets are cheap. He cares about corporate profits, low interest rates and low inflation.

Markets. Pretty excited about what is going on in the market. In the US, we are seeing a lot of economic indicators in the housing market and consumer sentiment and liquidity with the tapering not happening any time soon. Japan still has a stimulus program. There are also some signs in the UK. She is really focused on energy infrastructure. There have been some pretty positive announcements since she was on last. The Petronas Malaysian group has announced they are going to spend $35 billion in BC on their projects. Petronas has bought about $1.2 billion of Montne assets from Talisman (TLM-T) in the last few weeks, on top of what they bought from Progress Energy last year. Have about 27 rigs drilling for gas in the Western Canadian basin. 2^nd most active driller in Canada. The BC and Alberta premiers have come to an understanding of a framework for pipelines to the West Coast.

Energy Infrastructure Companies. This is in a very, very good sweet spot for 2 reasons. We have international companies coming in, but it is also because of the nature of the type of company versus the producers. In the Canadian energy space you’ve got the exploration and producers, which are kind of slaves to the commodity price. They go up and down with the drilling cycles. Infrastructure companies have a longer timeframe for their projects. They build projects, and get commitments from the producers of 7-10 years, which gives them the certainty of cash flow. They are a lot lower volatility.

Markets. Has been advising clients to load up the truck with equities. We are in the area now where seasonality kicks in and it’s a great time to be invested. There is that toxic US political machine that has taken a bit of a break now. Believes there will be another 10% taper in 2014, but this is in the market now, so it is not a big deal. S&P 500 is trading at 17X earnings and historically, it is not overvalued. If there is a correction, bring it on. It gives more opportunity to use a bigger truck. Feels Canadian market is in anti-bubble territory.