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

Markets. Expect we will continue having a bumpy ride through the summer. There is complacency that we will see QE or some other policy move but realistically, taking interest rates from 1% to 0.05% to 0.025% has limited impact. He looks for companies with significant cash flows, defensive and yield property.

Natural Gas. This has been really weak. They’ve been finding lots through North America using new technologies. Recent bounce is probably weather related. This is still early for this..

Markets. World has become one over the last 10 years. Doesn't matter where the stock is from anymore, you just want to buy best of breed global companies. As markets became one, it was harder and harder for money managers to add value because of volatility in the market. Today, people are more comfortable buying condos Toronto than buying a good solid dividend paying global company. Fear in the market and apathy to equity investing has become so large that good fundamental approaches to investing, such as growth, payout and sustainability have been categorically abandoned. Canadians have done a pretty good job of buying the banks, income trusts and a lot of dividend paying stocks. Outside of Canada there are big problems. Canadian style should be exported globally.

European telecoms? He doesn't hold any of these or European financial banks. There is nothing wrong with them but he is concerned about sustainability of dividends.

Global dividend companies. 15% withholding tax on the ADRs in the US. Also, no 50% tax credit dividend that you get with Canadian stocks. This gives you less than half what you get with Canadian dividends. Comment? This is correct. Foreign companies have an approximate 15% plus withholding tax. For every dividend $ you get from global markets, you only get about $0.85 in your pocket. This is not bad if you are trying to diversify your income.

Global Industrials. Economic indicators are all decelerating. Looks like the US Manufacturing economy is contracting, which doesn’t bode well for future earnings growth. We’ll have to watch this earning’s season to see if earnings will continue to grow. Expects Europe will continue to muddle along with tiny baby steps. Her cash levels are anywhere from 15% to 40% depending on the type of investor she is dealing with. Prefers to stay with boring, defensive type names.

REITS. Good sector as she feels that rates will stay low for a couple of years. She looks for companies that have a good record of distribution, with refinancing so there is a long term to their debt outstanding, long term leases, relatively high occupancy rates and little chance of hiccups when rents are renewed. (See Top Picks.)

Canadian Banks. She owns Toronto Dominion (TD-T) Royal (RY-T) and Bank of Montreal (BMO-T). Likes the banks as a group. The 5 big banks have not cut their dividends since World War II and in fact, have been fully growing them. For an income investor who wants dividend income, you’ll get it with the banks. (See Top Picks.)

Markets. From what she is seeing, things are still slowing down but she is expecting a rally sometime in the fall and into the new year. We'll be tired of hearing about Europe at that time and election campaigning will get into full swing. If there is any QE, it will probably be at the end of August. Going into an election, things seem to be a little more upbeat. It's generally the year after the 1st year of a new term that tends to be a little slow.

Markets. We have been in a sideways market for 4 of the last 6 months. Markets are pretty flat so far this year. Very strong support at 11,270 on the TSX Composite. Doesn't think we'll get down there, but if so we will test it. He has it skewing downwards because of the oil and other commodities, mainly gold. We are below the longer term moving averages which is never good.

(A Top Pick July 4/11. Up 10.2%.) Cdn$ versus the Euro.

How significant are death crosses and golden crosses? You cannot create a trading plan based on crossovers and moving averages. You have to apply money-management like Stops, take profits, sizing in and sizing out (not jumping in or out all at once).

Doesn’t think anyone believes the good numbers today. Market is expressing a certain amount of concern. Majority of numbers coming in are missing consensus or hopes. Thinks the global economy is running out of steam. They are approaching problems by trying to throw more money at it when we don’t have it. Thinks bank of Canada will more or less keep going with The Fed. His recommendations you can buy today. There is no doubt that the investment world is starved for income.

Markets. Believes that we don't have long to wait for the next bull market. In the 8th or 9th inning of the current bear market. This has been going on since 2000 on the Dow when we were at 12,000 and now it's at 12,800. We have really gone nowhere for 12 years. Now starting to see some of the requisites that are necessary for a bull market to get launched. 1) US housing market has been a fiscal drag for the last 5 years and is starting to bottom out. 2) Corporate balance sheets have never looked this good. 3) Money market funds are loaded with cash so there is money on the sidelines to fuel the markets once we get it started. It's the politics that are holding things back and he thinks there will be some solution in the next 3 or 4 months when the Americans go to the polls. Also, the Chinese are going to elect a leader in the fall.

Videotron 7.125% due Jan 15/20. Cable operator in Quebec. Not an investment grade security. Will probably be called in the next 3 years.