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

Historically, midterm election year markets go higher in 3rd week of April and tend to move lower until end of September when they bottom. Then go higher for the next 12 months. Expected to be end of October this year because Bush tax cuts are coming off at yearend and a lot of people will want to claim capital gains. Market will be so oversold it will give a classic buying opportunity.

Gold. IMF still has 150 tons of its original form and 50 tons of gold. They are under pressure to get rid of the last 150 and this is overhanging the market and keeping gold from going to an all-time high. If they were to blow out the last 150, look for gold to spike to all-time highs. He has a technical target of $1440 by year-end based on this scenario.

Natural gas. An ugly chart. Just broke a key support this week. Historically it does well the middle of Sept until the end of Dec but it hasn't happened in the last couple of years.

Oil service stocks. The bottom is normally reached around the 3rd week of Nov but the real sweet spot is from end of Jan to around the 1st week in May. You might consider HOLDRs Oil Services (OIH-N) ETF at that time.

Power Financial (PWF-T) or Power Corp (POW-T)? Both have come off a good deal. Power Financial is overwhelmingly Great West Life (GWO-T) and Investors Group (IGM-T). Power Corp has holdings in China, Europe and Quebec so it is a broader holding company. Your choice.

How do you make money these days: Dividends! He looks all over N.A. for free cash flow, distribution or dividend, strong balance sheet.

There’s a strong possibility that it could be a severe slow down, but there is a good possibility that we could escape it. So far it has been a financial recession, not an inventory recession. These take a long time to work through the system (we are at 2 of 7 years). We are going to see muted growth. A recovery without great gains in employment. His clients are in balanced portfolios. He stays at the short end of bonds. In the stock market, you take some capital risk. You need a 5 year time horizon.

Fundamentals on Gas have only gotten worse. The gas price to earn a 15% rate of return is about $3.30 to $4.30. Pretty high supply and tempered demand. Oil has been falling off, based on news of slowing global economic growth. But there are opportunities: dirt-cheap companies; balance sheets that can withstand low natural gas prices for the next 1-2 years.

Growth stocks in RRSP and TFSA accounts and dividend stocks in a normal count? This gives you tax optimization and is a great personal finance principle that has been used for generations.

Most indexed funds and ETFs are similar in what they are trying to do but he feels most ETFs are better in the way they go about doing it. You can trade ETFs throughout the day. The main difference is, look under the hood to see what they are tracking and also the costs.

NASDAQ 100 Equity Hedged-CAD ETF (ZQQ-T) versus S&P 500 (CAD-Hedged) ETF (XSP-T)? His preference would be the 500 stocks as opposed to 100 in the NASDAQ.

ETFs to capture future world demand for Canadian resorts is/commodities? S&P/TSX Materials (XMA-T) and S&P/TSX Base Metals (ZMT-T) are 2 that come to mind. Claymore Global Agriculture (COW-T) is not necessarily a Canadian story is probably a good long-term investment as well.

REIT convertible debentures? Generally not a fan of either the debentures or the companies that issued them. Basically they guarantee dilution in the future. 2 companies, Cominar (CUF.UN-T) and Dundee (D.UN-T) have almost 30% or more of their equity market cap in them.

As trusts in other sectors convert to corps and investors turn to REITs, is there danger of a REIT bubble? A lot of capital is flowing into yielding securities such as treasuries, bonds, bond funds, etc. Currently they are trading at 14.2X free cash flow, which is slightly rich so he has been exhibited in cash.

Preferred versus common shares? Preferreds stand above common shares in the capital structure giving them rights to receive dividends before common shares. Preferreds are often bought as a bond substitute.