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

Energy. Every data point he has received up until now has been very encouraging. There has been very strong gasoline consumption and crude oil demand in the US. Price of oil has been over $100 for the last 15 months during which there have been many worries. None of these worries ever came to fruition. A very, very recent data point in the last 2 weeks indicates US investors are turning back to Canada. 2014 is shaping up to be a really good year for Canadian oil producers. There is still too much natural gas. Average rig count on rigs drilling for natural gas is down about 60%-65% from its highs. At the same time, gas is off 25%. He sees a ceiling price of about $4-$4.25 for several years.

REITs. Prices have been quite weak since the announcement of the tapering news, however real estate fundamentals have been excellent. While the REITs aren’t bidding for properties, there are lots of pension funds that are there supporting the works. Maybe not as many, but there is still good flow on real estate transactions. You have to be selective, but the falloff was overdone for many names. Many are showing good solid growth and trading at very large discounts to NAV. This gives you opportunities to pick up extra names and, as well, you are gaining extra yield. He is currently slightly overweight in the US due to the opportunities that are there.

Markets. We are finally seeing a welcome shift from people focusing on a little bit more than fundamentals. This is most evident between specific stocks, say S&P 500 and the TSX 300 for example. Correlations are spreading out, which is an indication that investors are actually looking at stock by stock and company by company. We are by no means clear of any macro situation, especially in the coming months right now, which traditionally are pretty tough. September correction that everybody always expects may have happened a little bit earlier in August. Germany’s election gave some clarity. Obama wants to take a diplomatic approach for the rest of his term. Some of the numbers out of China and the euro zone are getting quite a bit better.

Markets. Continues to be cautiously optimistic on the markets and economy. We are finally reaching the acceleration point where the economy starts to sustain itself. He thinks with stimulus restrained it will continue to grow slowly. The economy is doing quite well even though the labour market is slack. You should have a good solid portfolio of dividend paying stocks.

Markets. The three big events were Germany, not a good thing; the fed surprise last week, uncertainty; and the US debt ceiling now, an overhang. Nothing we have to run from, just 5 or 10 percent. You get an 8-10% correction every year. It is perfectly normal.

Banks. Seasonality positive form mid-Oct to end of year, as are most stocks. Banks are at the very high end of the range and so wait for a pull back to put money in. If you want the dividend, go to a covered call ETF. Otherwise step in when we get the correction ending in October.

Gold. Driver on gold was central banks and inflation but that thesis has been challenged over the last couple of years. There is probably more downside and pain in gold. He is positioned a bit long on gold and looking for a modest bounce. The best play for another month or so and then he sees another dip down.

Educational Segment. Sleep at Night Portfolio. He under weights the US. The markets have rallied now. There are three potential changes we can make now. SDIV had a good move but has high beta so look to trade it out. Replace with ZWA-N, a covered call strategy, reducing beta. ZHY-T was hedged into the equivalent US holding, JNK-N. He took exposure out of mid-term corporate bonds and got SCPB-N. If the CDN$ goes back to $0.95, which he thinks it will then he makes a couple of percent. He has less than half the volatility of the broader markets with his portfolio.

Markets. Expects this will be a reasonable quarter. We just broke through one of the previous highs of around $12000 and got closer to $13000. Today was a good example when New York backed off, but Toronto was able to eke out a small gain. Feels we are at a resistance level for the TSX right now and will have a hard time breaking through $13,000. If it does, the market could run a bit further. Not sure what will happen in October.

(A Top Pick August 24/12. Down 18.6%.) Sprott Gold Bullion Fund (Series F- SPR226). Reduced his gold positions substantially some time ago. He is still sold on the idea that gold is a good part of a portfolio. If gold had another bottom of $1300, he would step in and buy more.

Markets. He is bullish; however, thinks the market has had a nice run. Expects it will be higher than where it is now. It’s like 2 steps forward and 1 step back. Canada is relatively cheap and once we get the resource stocks moving, oil, gas and materials, our market will do quite well until the end of the year. Oil and gas are the 2 cheapest sectors. They are just not responding, certainly to the higher oil price. You have to be patient. He sees a lot of mergers, acquisitions and share buybacks.

Markets. She is advising you to be selective. You need a concentrated portfolio. Don’t be correlated with any main index. She looks at the biggest companies across N.A. and asks which ones are going to do well. We had a period of slow growth but she sees it picking up a little. She is not looking for huge growth, however. She is 50% exposed to US stocks.

Pipelines have been big yield payers and got investors’ attention. They have to raise a lot of capital to grow their businesses. The valuations are high because of people chasing the yield. She only has PKI-T.

Markets. People are trying to figure out QE. It is a bad thing for stocks but good for a part of the dividend market and it will help the market. The fed is telling us there will be lower rates for some time. In Canada if you take out the golds we really had a pretty good run. You need earnings to put acceleration under valuation. With dividend portfolios you have the lower yielding more cyclical stocks on one side and the more interest sensitives on the other side. He has been moving back to interest sensitives over the last little while.

US Stocks. Fairly valued. If you take $110 in earnings and put a 15 or 16 times multiple on it, that is kind of where we are. As an equity investor he is trying to figure out not how we got here, but where we are going forward in 6, 12 and beyond months. With the weak economic backdrop, how are equity investors going to gain going forward. That is a tricky question. He has a Neutral trading bias. Trimming names where they need caution. Finding opportunities is extremely difficult. Still thinks the US is the best place to be for equities.