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

Let’s hope it will be different from last year and likely it will. It is dependent on Greece and now Spain. If the worries are at least somewhat taken care of then we have a chance of what happened after it was temporarily solved before Christmas. He decided most clients would like him to chase a situation rather than get in early. He knows the names he would like to buy if the time comes. Took a little off the table in energy and precious metals and would be prepared to put that back on.

Gold: You would think we would know that European governments are printing money. It has to be inflationary and good for gold. In the first sign of panic, investors don’t go to gold. We have not solved everything yet. Doesn’t see $2000 any time soon for gold.

Markets. It is obvious that Europe is heading for a pretty deep recession. Unemployment in Spain is 25%. This has implications for us with probably lower oil and commodity prices. North American economy is okay, not strong, but is slowly picking up. Consumer data is indicating that people in the US are more confident than before the crash.

Rare Earth sector. The problem is that most of them are produced in China and any time someone finds a viable deposit outside of China, China floods the market and kills the price.

Gold. It looks like people of France and Greece have voted against austerity measures, which basically means they want to continue to run budget deficits and spend beyond their means. The only way they can finance that is by printing money and in the long-term, this will be very bullish for gold. Current weakness in gold is very reminiscent of 2008 where everybody was selling everything and asking questions later on, at the same time, they were gearing up to do an awful lot of printing which was incredibly bullish for gold.

Markets. He is looking for the TSX to be in a range of $11,000-$13,000. The materials sector, one of the 3 big sectors, has broken down. The oil sector is getting there. Financials are what are really holding up the market above the $11,000 level. Pretty well exclusively holds dividend paying stocks for his clients. 10% of his holdings are in materials and 30% in energy half of that being in pipelines. His game is less volatility and growing dividends. Thinks dividend stocks will continue to be popular.

Markets. Between now and the November elections in the US, we will be in a high degree of uncertainty. June 10 and June 17 are the next key dates in Europe with the 2 French runoffs and they Greek election. Doesn't look like the Europeans are going to get their act together financially. Expects that the expiration of the US tax cuts will be postponed and will kick it down the road until after the new Congress comes in. He has been selling his holdings and is cash position is getting higher.

What would be an alternative to an annuity that would be stable, preserve capital and pay a decent dividend? In order of priority, he would look at Inter Pipeline (IPL.UN-T), Enbridge (ENB-T) and Pembina (PPL-T). In REITs, he would suggest Chartwell Seniors Housing (CSH.UN-T), H&R Real Estate Inv Trust (HR.UN-T).

Markets. Greece is the primary concern. He believes that sooner, rather than later, Greece will leave the union. It shouldn't have been there to start with. This will cause a severe recession in Europe but will be good for Greece. There will be a severe impact on financial markets but will be more in Europe then elsewhere and more in the wine drinking countries as opposed to the beer drinking countries. His cash is in the 10%-5% area as opposed to 30% in 2008.

Oils. Canadian versus US oils? He is actually looking at gas stocks because the potential upside in gas stocks will far outweigh the potential upside in oil stocks.

Bonds and GICs coming due soon. Because of low interest rates, should he continue in this area or put more into equities? You have to ask if you would loan your money to a company for 10 years it about 2%? Not likely. Wouldn't go out much further than 5-7 years. He would start to move more money into equities but would still keep a portion in bonds but would go beyond 5-7 years. Also would not put money into GICs because they are not liquid enough.

Natural gas. Eventually the price of natural gas is going to rise and that is really supply and demand. There have been 2 major problems for natural gas. 1.) With all the new shale gas discovered and produced, it has pushed down the price. 2.) This is a domestic commodity and this was a very mild winter throughout most of North America.

Canadian Banks. Doesn't think this is a fabulous period for Canadian banks. Valuations, compared to a lot of other countries’ banks, are pretty high. Doesn't see a lot of growth here. His favourite is National Bank (NA-T) which is totally domestic and will probably be the next bank to raise its dividend. (See Top Picks.)

Economy. Segments of our economy are doing well but others are not. Employment is improving but is the manufacturing, economic and employment growth strong enough that the central bank could actually raise rates? He doesn't think the economy could justify that right now. Started scaling back in mid-February on his riskier exposure to certain global markets.

Scotia Tower in Toronto was sold to REITs such as Dundee, H&R. Cap rate is amazing, about 5.2%. Debt for 7 years at 3.8%. Over 99% leased. North American economy is doing well. It may not feel like it but it is. Valuation is reasonable, almost cheap. Interest rates are at historic lows. Greece is most likely going to default. If you won Canadian Banks, utilities, telcos, etc. If Europe breaks up you will still be baying your bills.