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

GOLD/SILVER: He would err on the side of it being a buying opportunity. Gold is sometimes seen as a safe haven but in the last 12 months it has been the US $.

We are in for some rough waters ahead. There is more to come out of Europe and it is serious. Generally in North America we are seeing some strength in our economies starting to take hold. If things go off the rails in Europe that can really take the rest of the world with it. The Canadian Market is being punished a little overboard but that doesn’t mean there couldn’t be more setbacks. He is seeing some attractive valuations among some material and energy players. You have to have a long-term perspective. Over the next few months we are going to see some excellent opportunities to establish positions.

When you look at the future of Canadian oil production, the future is in the sands. In terms of long term, it is tied to the oil sands. Companies in conventional oil often sell at a better valuation. You need a significant oil price to be able to justify the production of oil.

There are pockets of strength within the markets. REITs have done very well and he argues that the balance sheets have never looked better. Excess cash is being used to improve balance sheets and to make acquisitions. Good companies go out and acquire their competitors.

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.