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

Markets. European central bank sees no growth next year. He focuses on two sectors – precious metals, gold and natural gas. Feels the latter two will do well with negative or no growth. Nat gas is detached from global demand. US election was one little pin point that is no over with. The next thing is the fiscal cliff by year end and they are not cooperating on many fronts. Europe is voicing concern about 2013. Market is looking for concrete steps.

Markets. News is not affecting his investing strategy. Markets have not been kind following the election. Markets are worrying about how we get through the fiscal cliff. He will believe that the sides work together when he sees it.

Mutual funds. He has found through history that actively managed funds lag the benchmark. Asset allocation and other passively managed funds are different. He does not have a problem with them.

Can ETFs be overbought or oversold? No. ETFs replicate the underlying securities. It cannot be overbought or oversold more than the underlying securities. He thinks they are misnomers and that there is no such thing as overbought or oversold.

RESP: Can you contribute more, earlier? Yes, but you don’t get more than the max grant. The money grows tax-deferred.

Transfer stocks into TFSA? Yes, you can do that. But when you contribute the security, you still get hit with the capital gain.

CFA: is a great designation and pretty hard to get but it is for people that are dedicated to security analysis. He believes markets are highly efficient and so not a lot of time should be spend worrying about a penny or two of additional inherent value. CFP deals with a bigger picture.

Principle Protected Notes (PPNs): They are a structured product. Hard to sell until they mature. They would have been great in 2006 but in 2008 it was like closing the barn door after the horse has gone. If they are the only way to get you into the equity market then they make sense.

Low Volatility ETFs: Several companies have come out with them. This is one way for people who can’t stomach volatility to enter the equity markets.

TFSA What happens to dividends? You don’t pay tax on dividends or capital gains but you can’t claim a capital loss in that account.

Anything that a Mutual fund can do, an ETF can do as well. Get a good handle on your tolerance for risk and invest accordingly.

Markets. The outcome of the US election is not going to change the way the world is going to unfold over the next few years. Still fairly optimistic on the US economy. He is seeing some leading indicators pointing in the right direction. Quite excited about housing in particular. Increased housing demand will feed into jobs, which will, in turn feed into the economy.

Markets. Markets seem to be a bit disappointed with Romney not winning the US election but on the bright side of things, you won’t see a political vacuum with a lame-duck government. He is comfortable enough to rotate out of some of the defensive stocks such as healthcare and consumer staples, which has done particularly well. Now rotating into some of the more cyclical areas because price opportunities are there. Also, seasonality factors are coming into play. Still holds about 17% cash, down from 25%. Prefers US stocks, which have outperformed Canada over the last 2 years by a very, very far margin. They have greater breadth and also feels relative strength is stronger.

Markets. Historically, just before the US presidential election, the market reaches a very important low, then goes higher right through until the following February. On average the Dow Jones industrial average goes up about 4%. Technicals are lining up for it to happen once again. October 28 is historically the low and the US market hit it on October 25 with the S&P 500 at 1,402. Canadian market actually happened on October 15 at 12,137. Markets have been going up slightly since that time. A word of caution; usually the markets go higher from just before the election until February except for the year 2000 with George Bush and we didn’t know who the president was going to be until the end of December to the end of January. That’s a possible scenario for this election as well.

Auto industry. Seasonality is very strong. People buy new cars in spring and that is when you get the best seasonality. Right around January through until March/April of each year is the time to be in the auto stocks.