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

Markets. Believes we are in a bull market. NYSE advance/decline line has broken out. Dow is now at its old peak of 2011. Chart shows a pivot point occurring at the end of October. Ance we clear the pivot point, it is an indication that the bull is assured. Expects there will be a little bit of selling but it should not be very aggressive. It could meander sideways for a couple of weeks.

Semiconductor industry. Rose about its pivot point this week. It will probably sell down a bit for a few weeks and then start moving again. After that, the upward trend should start again.

Markets: Looks more on the short term to see a direction. Primarily on the down days there is recovery and then follow-on. It looks like we are in a bull market. Getting close to 200 day moving average on S&P. That will give another group of people the interest to buy some more. He is getting rid of stocks that don’t do well when there are inflation worries. You are seeing negative returns for bonds this month. Reducing income oriented investments and getting more into momentum investments.

Silver: Some correlation between this and gold. It is in a downward trend in a trough. Don’t expect too much out of it and expect it to consolidate about the $30 level.

Options: are tricky because you can loose 50% and still be ok. If you are long, probably 50% stop and an expectation of a double. Manage the risk very, very carefully. Stocks: 5% stop lose or if it is volatile, you may have to go more.

Markets. Feels that stocks and indices are overbought right now. We’ve had a 5 week advance and RSI’s are getting close to 70, if not above so is expecting a pause or consolidation but nothing to worry about at this point but over the course of the year, is pretty optimistic and constructive. Dow Jones is near a May 2008 high and NASDAQ 100 is near a 2001 high. US stocks have outperformed Canadian stocks this last year by quite a big degree and this could continue for some time. It also tells him that the US economy is muddling along, not too strong, but still moving forward.

Healthcare? A more defensive space so from a relative performance, it may not be the best place to be this coming 12 months. Names that he continues to like are Pfizer (PFE-N), Bristol Myers (BMY-N), Glaxosmithkline (GSK-N), Merck (MRK-N) and Abbott Labs (ABT-N).

Economy. The economic data in the US, Europe and Asia is not bad. Particularly in the US where it has been quite strong with a lot of signs of firming. Job numbers are getting better and housing seems to be bottoming. There are a number of tail risks in the form of the European debt crisis that have to be resolved and moved forward.

Markets: Fed going to keep rates exceptionally low through 2014. Lots of reaction in markets including gold shooting higher. You can borrow cheaply and buy gold. There is fear about how far the US recovery can go and can it tip over. They are keeping rates low to keep money in Europe. All in all it is probably a good move. US may be printing more money and that is good for gold. Keep in mind we are in a negative interest rate environment. You are not really getting any return on your bonds. The yield players are still a good place to be, even though they are fully priced.

Markets: Chesapeak production cut: They are sending out a message that after they meet their minimum commitments, they aren’t making money, so are cutting back production. A 1.5% cut in US gas production. Others have cut back also. We are slowly starting to see this message.

Markets: 10 year low on nat. gas price last week ($2.22). It is the beginning of a ticking point. Chesapeak is the beginning of producers reducing production due to the price. It is one of the warmest winters in the last 60 years. Huge inventories. Physical storage levels will be filled by next October/November. He feels we need a price of less than $2 to get more companies holding production due to negative free cash flow. CNQ and and ENC have announced they are not shutting in production. Will have a decoupling of nat gas pricing from the stock pricing. He is looking for shut-ins, which we got on Monday’s and capitulation. The fear level is not there yet. We need later nat gas prices to get that. He thinks Gas prices will go below $1.50.

Canadian banks? A lot of people have been buying for dividends in the last year or so and have been looking for companies that can grow and sustain dividends. The banks still fall into this framework. There are some headwinds coming up including basil 3 with their capital requirements banks will have to put up. Overall they are in a relatively good shape. Good for people that are looking for long-term holds.

Oil coming into its peak seasonality. Good investment? Thinks it is fairly priced right now at about $100 a barrel. Based on the current tepid recovery we seem to have now, if this continues then oil will probably go up rather than down. Probably a good buy.

RESP suggestion? On his own children, he put the money into equities until she was 9 and from age 10 to 18, he put the money into income. But a few years ago, some ETF companies came out with 1-ticket balanced portfolios with a 60/40 mix consisting of some stocks and some bonds. This would be a good thing to buy to keep your costs down.

65 years of age with $60,000. Where to put it for stable growth until age 71? If you are genuinely a long-term investor, diversify broadly including US and emerging market products.