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

I had expected 3 Top Picks but as far as I can tell, there were only 2 discussed. Anybody get anything better than this?Bill

4-month treasury bills. Prepare yourself by having money in the kitty for now with the idea of being fully invested by October.

(A Top Pick June 2/09.) 3-month Treasury Bills as a cash holding. Seasonal period of strength for equity markets ended around May 5 and a series of technical indicators started to move lower.

Oil has been coming under pressure and the bottom of the trading range is being tested. No reason to think the trend will improve in the next little while but there could be a little bounce. Crude oil tends to go sideways in the summer.

Natural gas has very strong seasonality. Tends to peak around the middle of June and move significantly lower until the end of August.

Tuesday's program was supposed to have Linda Shick on Canadian Large Caps but turned out to be a recording of Monday's Program with Michael Smedley so there will be nothing new for Market Call today. Bill

Market has been looking for an excuse to sell off for a couple of days. When you get a little bit of bad news the markets go way down. 2 or 3 more weeks of choppiness and then Q2 results will start coming out. Hang in there and stay with quality names. He looks for a high-return-on-equity company.

GE Capital Australia, which is Australia's General Electric funding arm. 5.75% maturing January/11. Likes the very short end of the yield curve of Australia.

(A Top Pick June 24/09. Up 8.88%.) City of Toronto 4.95% due June 27/18.

Why is Cdn 5-year continuing to be 60 basis points above the US five-year? This has a lot to do with the outlook for interest rates in Canada versus the US. Canada has started to raise rates and are expected to continue to do so.

Strip bonds. Taxed yearly or a maturity? These are taxed yearly, e.g. you buy a strip coupon at $.80 on $1 that matures at par over the next 4 years. Essentially a $5 increase over time. It is all interest income and you have to pay tax even though you did not get the money.

Long-term Bond for TFSA accounts? Best way to capture yield is through a strip coupon. You are locking in yield and it will compound over time. Good value in the strip market right now. (Strip Bond is where there are coupon payments followed by a final maturity lump sum payment.)

Real return bonds for retirees? On the longer-term view, yes. However, right now they look expensive, using about 1.5% on a Real basis. When it moves a little bit higher again, you may want to put some money in this.

Timing the Market. Market averages is the net effect of all the money in the market. When it starts acting differently, going down, you are able to get out of the market. On April 16 the market changed its behaviour giving a series of losses on higher volume and giving lower lows and lower highs.

Categorizing Stock by Condition. Stocks that are poor performers i.e. going down when they market is going higher, are not worth looking at. Big money goes after the high-growth stocks in the best sectors. When these change, you know the market overall has changed and you can make different decisions.