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

Markets. It has been a wonderful start to the year and has been a tremendous quarter. Cooling off is pretty much to be expected. He is more curious about what will happen in the summer months. End of October - early November last year there was fear in the market and complacency was really pushed out of the market. That was a great time to be buying. Europe problems are no longer on the front burner. Because of complacency in the last few months, the market is not as attractive to a contrarian as it was.

Would you consider going Long one index such as the TSX and Shorting S&P 500? This is a strategy where you are betting on the difference on the fundamentals of the underlying country. Can't think of any particular scenario where this would be applicable. Doesn't think this strategy would be very useful.

Natural gas stocks. Is this a time to be getting in or is it a wait? Chart looks like a toboggan ride into the depths of Armageddon. Experts are expecting the price to be under $1 by the end of summer. If that happens, this will be devastating.

Markets: This feels a lot like last year: sell in May and go away. Last year it was risk on /risk off trades. This year it will be a repeat of last year: same sectors. This is a stock pickers market. He doesn’t like writing options this year because the volatility is quite low.

Options are taxed as capital gains. The premiums are a capital gain if you trade it are still capital gains.

Market. Government has announced no further stimulus at this time. This is an economy that may not need to hold the government’s hand anymore, which is pretty encouraging. Bond yields moved up indicating that the market doesn't know what to make of this. He doesn't expect any further stimulus from the US.

3 Books recommended. “Hot Commodities” by Jim Rogers. “The Quest for Alpha” by Larry E Swedroe. (Alpha is the attempt to try to beat the market.) “The Elements of Investing” by Charles D. Ellis.

What kind of mutual fund would be best to use in a new TFSA account with minimal initial investment for new investors? Attributes he would look for are those low in price, widely diversified and low turnover.

Conservative ETF with a dividend for a TFSA? Virtually every supplier has a dividend ETF. The one he tends to prefer is from the Bank of Montréal’s Canadian Dividend (ZDV-T), which tends to have the highest dividend payout.

Sell longer bonds and put them into a shorter duration bond ETF? If you are holding direct bonds that are paying more than what the current bonds are, and you are willing to hold them until they mature, hold them. If you will need the money before the maturity date, this makes sense. A laddered product such as 1-5 yr Government Bond ETF (CLF-T) or Vanguard Cdn Short-Term ETF (VSB-T) would work well.

ETFs in RRSPs? Yes. Depending on your age and how long it will be held, you might look at global equities such as MSCI World Index Fund (XWD-T). If you wanted to slice and dice, then the Vanguard products are very good for Canada, US and international merging markets. (His preference would be to diversify outside of Canada.)

RESPs? If a child ends up with $100,000 and the degree costs $50,000, what happens to the other $50,000? The government doesn't care as long as you prove that the child is in school.

Downside to covered call ETFs? These are good stories for Nervous Nellies. Downside is if markets go up quickly. If markets go up quickly, a covered call strategy will cause the holder to forgo some of the gains that would otherwise be there.Downside to covered call ETFs? These are good stories for Nervous Nellies. Downside is if markets go up quickly. If markets go up quickly, a covered call strategy will cause the holder to forgo some of the gains that would otherwise be there.

Resources. Stocks had a great run over the last few months so she expects some consolidation in this space. Expect some Cdn oil/gas stocks are going to be soft. Looking for a sideways action for the next few months.

Natural gas. Producers will probably cut back on production. Expect prices will be weak this year at around $2.50-$3.