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

Market: We are grinding through things in Europe right now. Won’t have a long-term solution in place for some time but should have a policy in place within 90n days. Either a good one involves the ECB or a more muddled one from Germany are the two options. We will be in a better position next year. Stocks are cheap and dividends look good. Lots of diamonds and rubies out there. A lot of pessimism is priced into the marketplace. This is the second most attractive environment for valuations in his lifetime.

A year ago, TSX was $1600 above the DOW and today it is below. Why? Repatriation of funds from Europe has had a big impact on this. There are lots of good quality, multinational companies in the US. Canada is somewhat on the resource side and mines have taken a hit and gold companies have gone sideways. At some point or other, will be back to a point spread of $1000 or better.

Market: He normally appraises a company and tries to buy below that appraised value. He wants to get something more than the market gives you, which is 8%. In certain times he will make a mistake and in other cases he will make up for it. With small caps he looks for a higher rate of return in exchange for the increased volatility. He believes in holding for 2-4 years, not 2-4 weeks. Tech hardware looks interesting, resource companies, interest him. The biggest companies of the world are interesting.

Markets. To protect yourself and get some growth, stick to good quality, dividend paying companies that are well run. Also pay attention to how much cash you have in your portfolio and that you are not selling on down days and make sure your asset allocation is correctly situated.

European sovereign bonds. This is too much of a wild card right now. The situation seems to be very fluid, going back and forth. If you're looking for safety and income there are a lot of other wiser choices in Canada and the US. This is a definite slowdown, which will put a cap on growth but in one sense is good for fixed income in that you know that rates are not going to go up immediately.

Do bond yields have to rise from here? If so, where does a bond investor “hide”? Can't see bond yields rising, at least for another year or more. 2 places that bond managers make money is either in their term or duration so in a rising rate environment, you get as short as possible. The other place is a mix between government and corporate. In a rising environment corporates are going to take it a little bit harder so reduce corporates and go into governments.

Money market funds? They pay a very, very low rate. The big risk is if we stay in an almost zero rate environment.

Ford Credit Canada 4.25% Bonds due 2014. BB but is there a possibility it gets upgraded to BBB? BB is just below investment grade and Ford has been very public in saying they want to make it back to investment grade. That is good news and their sales are up. If you buy them, make sure they are in the shorter terms.

Uranium stocks. This is not on a lot of peoples radar screen at the moment. After the Japanese earthquake, a lot of people focused on other directions. There is probably also a lot of tax loss selling. Uranium will have legs longer term but in the short term, there doesn't seem to be any momentum. If you have the time horizon of a couple of years, it would be a good time to get in.

Market: Bought 3 stocks starting in August and he is scouring for bargains. This is a time when a lot of people are doing tax loss selling and he buys stocks when they are out of favour. There could be the Santa Clause Rally follow by the January affect in the first few days of January.

High-yield bonds as purchased through ETF's? These tend to focus in the US because high-yield in Canada is lacking. US high-yield gives you a certain amount of high volatility. Also watch for foreign exchange issues. A higher Cdn$ could impact your investment. You have to watch out for the fees.

Tax implication on large-cap US dividend stocks? 1st of all, you have to deal with the Cdn$ and if it gets stronger your investment will get weaker. There is a US 15% withholding tax on your dividends even if it’s in an RRSP, which you don't get back. This is a small negative of the big puzzle.(There has been a question on the 15%, so check with your advisor on this.)

Market: The overriding problem across the globe is that there is too much debt incurred for the countries or people to services them. We are tracking on par with other financial crisis since WW2. He looks for REITs with good management, low payout ratios, etc. You would like to see strong robust growth in the economy so there is a demand for commercial real estate, but the interest rates are low and credit spreads are low and ‘pretty good’ demand, so things are pretty good for REITs.

REITs are something that Canadians do much better than American based on total return from REITs in both countries. It is function of their distributions. Best REITS are dividend growers. Add tax efficiency because a lot do some payout in return of capital.

Markets. Seeing some signs of reversal. Activity today looks pretty encouraging. DEX Universe Bond ETF (XBB-T) is the ultimate in interest sensitivity as it is pure interest. Starting to sell off a bit on days that are positive for most of the other stocks. Getting to a very high point, which will be nerve-racking for some income oriented investors.