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

Market: We got to a point recently where just over 70% of global stocks were participating in the rally, then markets except North and South America backed off. He prefers to stay with the things that are working. If you look at S&P without Appl, it is not doing that well. You want to be careful with some of the laggard groups.

He spends a lot of time focused on generating yield. Don’t look for the highest dividend yield; You make money on a REASONABLE dividend with growth over time.

Oil. Everybody is concerned about weakness in natural gas. Oil stocks are also going to get hit. Oil prices are around $103 and have been up to $110. Everyone has been building inventories because of disruption concerns in the Middle East if the Strait of Hormuz gets closed. US inventories are now up 12.4 million barrels. OPEC is producing about 90 million barrels. Aemand in winter is about 88-88.5 million. In the spring, demand goes down by about 1.5 million barrels. Right now there is about 3 million barrels a day production greater than demand. Everybody is getting to the point where their strategic reserves are full and their commercial reserves are getting to capacity. If OPEC does not cut back, there will be a glut of oil. Expecting oil will go back down to the mid-$70 this summer if there is not an incident in the Middle East. US has 97 days of inventory where they normally should have 82. About me another tough year in 2013 and once we get through this, there will be another energy cycle started. If demand grows to 1 million-1.5 million a day in each of the next few years,there will be much higher oil prices and also, hopefully, natural gas also gets resolved.

Natural gas. If a company is producing liquids rich natural gas, they sold the liquids and are prepared to give the natural gas away almost nothing. Everyone in the US that is producing liquids rich natural gas is getting about $2.10 and may be willing to take under $2. AECO is about $1.58-$1.59 and the price could break $1. Historically, you get a bounce between August and November and he expects that somewhere in that window there will be a bottom but it will be at lower prices somewhere below $2 for IMAX and below $1 for AECO. Heading into the winter of 2012-2013, we may see $4 in the US and $3 in Canada.

Liquid natural gas? This is a tough one because we still don't know about those pipelines. Native land claims are big issue. He doesn't know how you play this on the pipeline or pipeline construction. There will be lots of ways to play once there is a game plan. He would go to the cheap side right now, which are the companies that own the gas that might go into the pipes.

Markets. Feels the correction is here. After the run we have had in the 1st quarter, we will go through a bit of a normal consolidation correction phase. There might be a pullback of 5%-10% and a bit of consolidation over the next month or 2 and then expects the upward projection will continue. Doesn't expect an increase in interest rates in 2013.

Markets. It has been a wonderful start to the year and has been a tremendous quarter. Cooling off is pretty much to be expected. He is more curious about what will happen in the summer months. End of October - early November last year there was fear in the market and complacency was really pushed out of the market. That was a great time to be buying. Europe problems are no longer on the front burner. Because of complacency in the last few months, the market is not as attractive to a contrarian as it was.

Would you consider going Long one index such as the TSX and Shorting S&P 500? This is a strategy where you are betting on the difference on the fundamentals of the underlying country. Can't think of any particular scenario where this would be applicable. Doesn't think this strategy would be very useful.

Natural gas stocks. Is this a time to be getting in or is it a wait? Chart looks like a toboggan ride into the depths of Armageddon. Experts are expecting the price to be under $1 by the end of summer. If that happens, this will be devastating.

Markets: This feels a lot like last year: sell in May and go away. Last year it was risk on /risk off trades. This year it will be a repeat of last year: same sectors. This is a stock pickers market. He doesn’t like writing options this year because the volatility is quite low.

Options are taxed as capital gains. The premiums are a capital gain if you trade it are still capital gains.

Market. Government has announced no further stimulus at this time. This is an economy that may not need to hold the government’s hand anymore, which is pretty encouraging. Bond yields moved up indicating that the market doesn't know what to make of this. He doesn't expect any further stimulus from the US.

3 Books recommended. “Hot Commodities” by Jim Rogers. “The Quest for Alpha” by Larry E Swedroe. (Alpha is the attempt to try to beat the market.) “The Elements of Investing” by Charles D. Ellis.

What kind of mutual fund would be best to use in a new TFSA account with minimal initial investment for new investors? Attributes he would look for are those low in price, widely diversified and low turnover.

Conservative ETF with a dividend for a TFSA? Virtually every supplier has a dividend ETF. The one he tends to prefer is from the Bank of Montréal’s Canadian Dividend (ZDV-T), which tends to have the highest dividend payout.