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

Markets. All the macroeconomic data coming out now is starting to really question a lot of investors’ thoughts as to how well the recovery is occurring. A lot of the macroeconomic data is starting to slow and valuations are starting to get a little stretched. However, North America is looking pretty good.

Seen a big push into the resource sector, people chasing commodities since the 2008 crisis and the market has raised about $10 billion in 3000 financings. We are going to see the net result of that and it wont be good for junior mining. There is too much paper and not enough liquidity. We will see some real destruction across the board in the junior sector. It will be a terrific opportunity since we will be throwing out the good with the bad. What he is doing is watching for value. Buy it when it is selling below what it is worth.

Nevada has been a great place to be exploring. Recent discoveries by ABX. They are so rich and so big when you find carlin deposits.

Copper: Should be flat this year with China slowing. There could be a deficit in copper at some point and it takes so long to bring the mines into production.

You have to keep in mind what interest rates are relevant. REITs borrow on the 10-year rate. Not that concerned with the short end of the interest rates. REIT mortgages are not tied to short-term rates. Biggest risk in his business is the operational risk. Doesn’t think people will think that REITs have had a good run and should wait.

How would you structure the fixed income component of an RRSP portfolio? Depends on your risk tolerance. If you are close to retirement, do you have enough money salted away that you can withstand financial fluctuation.

US stock market has outperformed Canadian. Would you take money out of the US market and put it into Canadian? He would from both the timeframe and rebalancing aspects.

Save on tax by using RRSP’s but how can we offset the high taxes when we take our money out? A wife and husband can split income and when you convert to a RRIF, pension income can be split up to 50/50.

Would you have an ETF in a TFSA account? He would recommend this. Since you are putting in $5000 a year, it wouldn't hurt to put them into a different ETF.

What kind of investment for a new grandchild? You should be investing in stocks and be broadly diversified. He would recommend the iShares MSCI World Index Fund (XWD-T) consisting of global stocks. This gives you global exposure in the RESP

Reverse mortgages? This is just like a mortgage, but in reverse. You sign your home over and instead of having 20 years of you making payments, the institution makes regular monthly payments to you. At the end of the 20 years, you have to go because they take over the ownership of the residence.

ETF's. Really tough to be an investor these days. Fixed income market gives you next to nothing. Believes there is a lot of better economic news coming out. Market is trading at 13.5X forward earnings, historically 19X. If we get to 16X, the markets are going to be up 19%. People don't want to hear good news; they just want the doom and gloom of the whole situation. The objective with ETF's is to find an upcoming trend in the market place, buy the trend and when the trend is over, you are out. You check when a trend has been broken by technical analysis with moving averages, volumes, etc.

Japan ETF? 22 years ago, half the stock market value in the world was all Japan and yet now it has been in a bear market for about 20 years. Cheap markets at about 10X earnings so he likes it. There are a couple of good ETF's out there such as iShares Japan C$ Hedge ETF (CJP-T) and iShares MSCI Japan Small Cap ETF (SCJ-N).

Gold. 60% of position in XGD-T and 40% into ZJG-T late summer, early fall. Good strategy? Good strategy but he is not very bullish on gold, as gold companies are having some issues environmentally and social issues. If you look at gold in the recession of 07 and 09, gold did not perform very well at all. Gold does not like recessions but performs better after difficult times. It performed well from 09 to the present because of the Feds QE2. If we see QE3 gold will go higher.

Interest rates. GDP numbers were disappointing today indicating a contraction in February which dampened expectations that the Bank of Canada would be raising rates anytime soon. For a fixed income person, this is all pretty normal and is part of the cycle. Feels that we are 12-24 months away from the Bank of Canada doing anything substantial.