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

How do convertible bonds rank in security and safety compared to regular bonds? Which ones do you prefer? Convertible bonds in Canada are focused on 2 sectors of the economy, REITs and energy. You have to be confident with the underlying company. (See Top Picks.)

Preferred shares? There are many changes coming to the preferred market. They're less volatile than equities and more stable than bonds. New Basil (?) rules are going to change the game. Banks are likely going to be calling all their bank resets so in the next 3 years, a lot of preferreds will disappear. Some of them are trading above their call price right now so you might consider changing them for some of the perpetuals that are coming out now.

Bond ladder. Have a $20,000 bond coming due on an 8 year ladder. Should I renew at around 4% or go shorter? Stick to your ladder and renew.

Do convertible ones purchased via an ETF represent decent value at the present? He believes they are. He likes Claymore Adv. Convertible Bond ETF (CVD-T), which has 81 different issues in it which gives you a basket of convertibles.

3 investment books that he would recommend for anybody's home library. 1) Wealthy Barber Returns by David Chilton. 2) Winning The Loser's Game by Charlie Ellis. 3) Common Sense Investing by John Vogle. 4) Thinking Fast and Slow by Daniel Kahneman.

Oil. Expect there will be demand/destruction when gasoline in the US gets above $4. Currently at around $3.60 so there is a little ways to go. Thinks there is probably about a $15-$20 premium baked into the price of oil so a lot of hike in oil prices relates to geopolitical events and what is going on in Iran.

Markets. Feels this market has room to run. Because we have had a really strong run means we are likely to continue to do so. Central banks are continuing to pump out liquidity. Chinese have started to reduce reserve requirements. Because of strong earnings, valuations of companies are reasonable.

Markets: Markets should take a breath after 4 months of rally. He is driven by a chart showing earnings yield vs. bond yield. There is now a real gap. The public systems are bankrupt (sovereign debt, bonds) but the private systems (equities) are not. Conservatively balanced companies are raising their dividend. On a balance sheet they are less levered and payout ratios are lower. This is favorable for equities.

Markets. TSX has a little bit more room according to some of the indicators but NASDAQ and S&P are at extreme readings. Looking at the actual price actions, there are very small daily movements and volatility is very low. Indicates records are complacent but grinding higher.

Moving averages? The conventional stuff is the 50 and 200 day. He prefers 125. If you are trader is to be 125 min., if you are a swing trader you can look at the 125 day moving average. He likes the 125 day as well as 125 week.

Markets. He is looking at 10% earnings growth this year. Sees some positive upside for the market in the form of high single digits, including dividends. Wouldn't be surprised to see a little pullback when markets digest earnings growth. Sees pretty good upside potential in the energy space. Expecting some decent upside in financials, especially the banks.

Markets. In the market, but is nervous. Has raised some cash. Thinks it is a replay of 2010-2011 where there were strong markets in the early part of the year and then a sharp selloff. The ingredients are out there for this. A lot of potential problems on the horizon including Europe and restrictive policies in China and India. Indicator of Chinese activity is still a flashing contraction.

Uranium. This is going to be challenged market quite for some time so he wouldn't be overly aggressive in buying. There is a lot of uranium in the world. If you really want to be involved in a mining stock that has some exposure, BHP Billiton (BHP-N) has a lot of land in Saskatchewan. This is the way he would play it.

Markets: Dow hit 13K, a big round number. Certainly there is a lot more optimism today than the last few months. Looks like things in Greece may be settling down. Some numbers out of the US give investors more confidence. Some investors may be more interested in stocks now that we hit 13k on the Dow. Thinks we are breaking out and there is a bit of momentum building. Also, the key thing is to focus on the fact that fundamentals are improving.

Markets. Things are looking better. A nice improvement in US economic data. In earnings, growth was great last year and we’ll see a little bit of growth again this year. Position yourself to take advantage of what is going on. Valuations are cheap, interest rates are very low and bonds are paying you nothing so take advantage of good quality companies. He is rotating out of names that have less upside such as REITs, utilities, pipelines, etc. With Cdn$ rising, he is taking a hard look at a lot of US names, especially in technology, healthcare and companies you can’t get exposure to in Canada.