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

Markets. He was looking for a bit of a pullback in the 2nd quarter, which he got along with bad weather and Japan's earthquake. Some of those things will impact the economy for the balance of the year, but the market discounted them almost immediately. Still looking at technology and Canadian financial services companies. They both suffered badly in the 2nd quarter.

Mutual funds. Only 2.5% of Canadian mutual funds outperformed the S&P/TSX compensate. Only 11.6% of international funds and 14.1% of US equity funds outpaced their indices. Approximately 1/3 of all funds in existence at the beginning of 2006 performed so badly that they where closed down by the end of 2010. If you can't beat them, why not just buy the benchmark? And

TFSAs. With the first $5000, would be better to put money in 1 or 2 high dividend stocks or into a dividend paying ETF? Wants to channel dividend payout into a DRIP in a TFSA. The idea is good but there are a couple of other things you could do. Look for small or value companies that generally outperform the benchmark.

Economics. Waiting for the next downturn in order to be able to scoop up more bargains. Earnings season is coming shortly and he expects more good results will be reported. Sees the whole year as being very strong. If we can get through the debt ceiling, Greece, Portugal and the current slowdown, we are off to the races in terms of corporate profits.

Markets. To deploy money today, you would probably have to be more defensive. Markets peaked in April and May but are down. Canadian resources are down and we are in seasonal rotation. If we can get through 13,600-13,900 on the TSX, the summer might be a bit more exciting. If we don’t get there, we are probably looking at 12,500-12,700 range.

Oil. Very tight and she can't see it going below $90 unless Libya comes back online, which she doesn't expect.

Market: Interest rates: We should be seeing a lot better growth. At this point in the cycle you just clip the coupons. Rise in interest rates is on hold for 6 to 12 months. We’ve never had a cycle where the less developed economies are lending money to the first world. Preferred shares and corporate bonds are the place to be right now. As corporate profit start to approve you want to shift more to corporate bonds. We are not going into a huge slowdown.

Shaw 7.5% bond trading at $111. Professional investors look at the spread between this and government bonds. This one has about 1.2% spread. If you think it will get tighter, then you should sell the bond. Could consider selling it. Go into the preferreds.

Government bonds – what to pay: It is difficult to buy directly from the government. You can work through a broker. Can buy Canada Savings Bonds each fall and you can buy them directly.

BC, Ontario, Newfoundland Bonds due 2025 – should caller redeem? Gov’t yields have dropped and spread from provincial to federal bonds has compressed. He recommends getting out of them and into cooperates.

Real Return Bonds: Protects against inflation for pension funds. Usually very long terms. There has to be inflation for them to work for you.

Floating rate preferred rate shares: Why are they not more popular? Probably because of issuing companies. A small sliver of market place.

Split fixed income portfolio between 3-month T-Bills and long dated corporate strip bonds (Bar Bell): It is difficult to find corporate strip bonds in Canada.

Intac Financial Just did their first preferred share issue and he bought some.

US Preferreds. He would avoid them. He would go with a broader based ETF.