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

Aeroplan 6.95% maturing 1/26/17. As the economy recovers and people spend and travel, there will be more revenues coming in. Fairly good yield for a not very long duration.

Bank perpetual preferreds. Paying over 5% but if interest rates go up will the banks call these? As interest rates rise, bonds and preferreds will get hurt, especially perpetuals. Generally, the banks do not call these.

US or Canadian corporate bonds? He would prefer to the Canadian over the US. Doesn't like the currency risk. Also, Canadian corporate balance sheets are generally in better shape. Growth prospects for Canada is probably better.

City of Winnipeg bonds Feb 11/13 yielding 9.375%. Credit risk is pretty close to zero. Between now and 2013, it will go from $118-$100. So every year you lose approximately $6 in capital. To offset that you are getting a huge coupon.

Bank preferred shares as an alternative to GICs? The preferreds would be a better alternative. Credit risk is slightly higher but not much. They won't always be at $.25 on the $1 so will be more volatile. You may have figured out at quite a discount depending on market conditions,

Oil and Natural gas. Thinks these will be very, very good businesses. Still the possibility for sharply lower natural gas prices because of burgeoning US production and reduced industrial demand. A lot of it will depend on how oil/gas companies will be allowed to report reserves on a going forward basis and whether or not the current liquidity driven rally declines.

Gold. $1300-$1500 this year and $2000 before the eventual end of the bull market and doesn't know when that will be.

Silver, unfortunately, is a very thin traded market compared to gold. Believes you still have to own gold first but one of the big surprises in the year could be a big bump up in the silver price.

Copper is the one base metal that he is most bullish on because of the continuing need for it globally.

The market is behaving like Goldielocks. He economy isn’t. He hopes the market is right, but would rather be safe than sorry. His cash position is now in the 10-15% area. If there is a sell-off he wants to use the money to buy stocks he has been waiting for. Starting to look at more cyclical stocks.

Gold: Looking for gold to reach $2000 in the next 2 years.

With looming interest-rates coming, how will this affect bank preferred shares? Re-settable preferred shares will do better in a rising interest-rate environment than the non-resettables. He is not anticipating rates will go up swiftly. You may want to move some of your money into equities that will have dividend increases.

There is a lot of optimism out there in the equity markets. Sovereign debt issues seem to have been put to the side. He is not in agreement that it is all warranted and is a little bit cautious, but there are selective opportunities in the market. He is looking at defensive sectors.

Most western economies will have to do some painful deliberating. Gov’t is talking about lifting foreign ownership laws for telecom, which could be positive for telecom. Huge under valuation in the large cap oil and gas names. There are some good opportunities for long-term investors. Oil pries will head higher. Gas trend is not sustainable. He is bearish on Nat Gas.

POTASH : Potash can be a cheap for of insurance. We skipped a season in putting it down. You can’t go two years without applying it. Stick with the majors.