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

What kind of investment for a new grandchild? You should be investing in stocks and be broadly diversified. He would recommend the iShares MSCI World Index Fund (XWD-T) consisting of global stocks. This gives you global exposure in the RESP

Reverse mortgages? This is just like a mortgage, but in reverse. You sign your home over and instead of having 20 years of you making payments, the institution makes regular monthly payments to you. At the end of the 20 years, you have to go because they take over the ownership of the residence.

ETF's. Really tough to be an investor these days. Fixed income market gives you next to nothing. Believes there is a lot of better economic news coming out. Market is trading at 13.5X forward earnings, historically 19X. If we get to 16X, the markets are going to be up 19%. People don't want to hear good news; they just want the doom and gloom of the whole situation. The objective with ETF's is to find an upcoming trend in the market place, buy the trend and when the trend is over, you are out. You check when a trend has been broken by technical analysis with moving averages, volumes, etc.

Japan ETF? 22 years ago, half the stock market value in the world was all Japan and yet now it has been in a bear market for about 20 years. Cheap markets at about 10X earnings so he likes it. There are a couple of good ETF's out there such as iShares Japan C$ Hedge ETF (CJP-T) and iShares MSCI Japan Small Cap ETF (SCJ-N).

Gold. 60% of position in XGD-T and 40% into ZJG-T late summer, early fall. Good strategy? Good strategy but he is not very bullish on gold, as gold companies are having some issues environmentally and social issues. If you look at gold in the recession of 07 and 09, gold did not perform very well at all. Gold does not like recessions but performs better after difficult times. It performed well from 09 to the present because of the Feds QE2. If we see QE3 gold will go higher.

Interest rates. GDP numbers were disappointing today indicating a contraction in February which dampened expectations that the Bank of Canada would be raising rates anytime soon. For a fixed income person, this is all pretty normal and is part of the cycle. Feels that we are 12-24 months away from the Bank of Canada doing anything substantial.

Would you purchase zero coupon bonds for a retirement portfolio and are they safe? When looking at these, you should 1) look at the term i.e. how long they run and 2) the credit rating of the company. Most of these are pretty safe.

Perpetual versus Callable Preferreds? Given the background of interest rate increases, he doesn't think there is a lot of danger in perpetuals. About 40% of his fund is geared towards perpetuals.

When do you sell for a gain, a Reset Preferred resetting in 2014? As you get closer to the reset date of 2014, the company will have an option to call it back or redeem it from you. Up to that date, it will start eroding back to $25. A lot of people have started trimming them off already in order to lock in their capital gain.

Is it a little early to get into floating rate bonds given that interest rates are not likely to rise? Yes that is correct. Use these in a rising rate environment.

Markets. This is a market where investors are continually searching for good news and overreacting whenever there is any positive or negative announcement. GDP growth is very slow and we are coming out of a financial recession. Consumers are paying off debt which takes a period of time. Unfortunately, our governments are going further into debt. Expect we will continue to see very choppy growth in employment. Value investors will be able to pick their spots as markets retreat from time to time. People should be prepared to take profits when action is on the positive side.

Gold. BRICS Countries (Bazil, Russia, India, China and South Africa)) recently stated they will be setting up their own banking system. Gold will give these nations a monetary constant, which they need to do business among themselves. We are seeing a breakup of the current monetary system that no longer works. The only way to keep the current system is to print money, which is very good for precious metals. What is happening to the BRICS nations is even better, because no one is paying attention to it.

Molybdenum? Used for rust prevention, especially on pipelines. In order to replace old pipelines, we need more molybdenum.

Markets. Last year Europe was not on most investors’ radar screen. Now everyone is hunkered down and ready for it. Also thinks the policymakers are a little bit further along. Any sort of weakness you get from Europe, at some point you are going to want to add to quality positions. There are a lot of supportive factors such as the Fed yesterday, China that has widened their currency band and earnings in the US have been great. Valuations are still relatively attractive.

Sentry Canadian Income Fund? Claim they can take some of the volatility out of investing but still returning their dividend income monthly. MER is over 2%. Thoughts? Mutual funds can be a very good way to go. If you have good active management that can really identify the companies that are more likely to grow their dividends, it is worth it to pay for that active management.