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

Markets. We are seeing an appetite for yield in these markets and this is manifesting itself in a whole host of ways, most obviously in the sovereign debt market where 7 to 8 countries have negative yields. This reflects a fear on the part of large institutions who are looking to park very large amounts of capital into something that is reasonably safe and liquid. High dividend paying stocks have done fantastically well and he expects that will continue to be the case. High yield debt and investment grade corporate bonds will continue to do very well.

Where are you looking for growth in this economic cycle? He can't point to one area of low hanging fruit in the equity market where growth outlook is absolutely certain, valuations are fantastic and dividend yields are high. You have to look at things on a company by company basis. Look at the organic growth rate of individual companies, which is a pretty powerful testament to the quality.

Markets: The ECB has been disappointing us for 4 years so he didn’t know what the market was expecting. He suspects they will not do anything that will impress the markets. Earnings have been OK. It is a news driven market and sometimes it makes you pull your hair out. He wants to look for fundamental value. If a stock is weak people kick it out of their portfolio. He would only buy with the right name, valuation, etc. He tiptoes around the minefields.

Markets. Very dangerous to make an assumption that just because the market is not doing well and the economy is not doing well that the markets go hand-in-hand with the economy. We are seeing record corporate profits and yet a weakish economy. When all the bad news is factored into the market, there is a chance for it to go higher.

Markets: Companies with good earnings are moving up while others move down. People are fatigues with all this macro news. Junior resource companies that have done well have done well in valuation. When market gets tough you to back to the balance sheet and the fundamentals.

Markets. Kind of dreary. World’s problems are all still there plus a few additional quite serious ones. Always cynical about money being thrown at problems. Looking forward to November when the US elections start getting into gear.