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

Markets: Dividends should be a bigger part of global dividends. Canadians know very well that there are two parts of return. Stock appreciation and dividend. As soon as he tries to invest outside of Canada he gets small, medium and large cap companies globally, but should take dividends into account. There is no tax credit but the returns out do the taxes. Buy growth/payout/sustainability stocks.

Indian Banks: Indian banks have avoided the sub prime crisis. Net interest margins have compressed so margins in Indian banks are not as high as they used to be.

Markets: There was nothing really fundamental when the selling started in the recent sell off. He blames young money managers or computers. You have to look at the market from a fundamental viewpoint. Something else was going on and he doesn’t know what it was. There were always skittish investors, but computers aggravated it. There is going to me more M&A. Corporate world is loaded with cash. The Greek situation got settled with a minimum of damage. That problem isn’t going to go away but a bunch of the debt got written down. We were prepared for the Greeks but not for Lehman.

Markets: Market is saying you have a pretty descent recovery going on in the US. Canada, not so. You have momentum behind this recovery in the US and much of the world. Tech, auto, industrials, base metals are good sectors.

Nat. Gas.: Could drop below 2 but will not stay there for a long time. You are going to find some good buys in this sector. Buy be a hero on this one. Thick oil production is still throwing off lots of cash flow. In the short term the trend will still be down.

Markets: A lot of the rally is triggered by liquidity. Finally Japan, who was the holdout, has come out and said they are doing QE. We have seen some better real economic news. This probably still has legs. The break out in bond yields is 10% up in yields of 10 years and 10% down in bond prices. That is really big news. This is the start of a sell off short term and may be a longer-term bear market. Economically sensitive areas have done well in which you should take some profits and there are laggards in the defensive area, where you should the proceeds to.

Markets: Thinks long term the market is on sound ground. Corporate profits are in good shape. Risk and fears of Europe and even the US have abated a little bit. However markets don’t go in one direction for very long and there will be a time when markets have to take a breather. There are cyclical risks and secular risks. China is slowing, but over time will grow smartly.

Markets: He thinks there will be consolidation in the telecom sector. His idea on telecom and cable is that it is all about data. If you can’t get the higher part of the data into your house you are not going to make it. He owns 3 of 4 major telecoms. US Indices have gone to new highs. It is picking up, vs. Canadian, which is range bound 11,000 to 13,000, and so you buy companies that keep increasing their dividends.

Preferreds: Depending on client, he typically holds 80% in dividends and 20% in bonds or preferreds. Likes preferreds, especially in taxable accounts.

Gold: It is a supply/demand situation. It trades off the US$. It is down today about $50 and he thinks it could go back down to $1500 without problem. His clients have 5% in Gold Corp as a long-term investment.

Markets: Equities are still an under owned asset glass. Markets are likely to continue to rally and pullbacks will be shallow as long as European leaders are constructive. The yield play is getting tougher. It is hard to find companies that are miss priced and are likely to raise their dividend. Protection strategies are protecting against systemic risk and the downside risk.

Markets: Hopefully the Rally will continue. Each year we have at least 5 drops of 5% or better. He is quite bullish on earnings and equity markets over the next 2 to 3 years. He won’t touch US financials until they can raise dividends. He is watching them carefully. Cyclical have an attractive entry point. US Mega caps are approaching or over par and people should take advantage of them.

Markets: A couple of weeks ago we got a lot of sentiment and momentum indicators said it was time for a pause. Sees that for the next couple of weeks and then we are back into the race. Right now, he loves the banking sector. Energy has been attempting a breakout and metals as well. Banks had a crummy year last year.

Bollinger Band: Volatility bands. A 20-day moving average and then the computer will calculate two standard deviations away from it. They should capture the volatility of that stock. When they move into the top or the bottom of the band. When the bands are squeezing, things are staying a little too quiet and so it will soon break out.

Silver: Charts are some of the best things to use when you are looking at commodities. Silver is an industrial commodity but gold is purely a chart based metal. Right now we are at a head and shoulders pattern in silver. You want to see a breakout of the neckline. It needs to stay there at least 3 trading days.