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

Long Gold Corp GG-N and Short $39 May calls. Take $1.35 for the month. You are harvesting 3.5% a month or 40% a year. If gold stocks stay where they are or go higher you make 40% a year..

Why not GIC's where the yields are little higher than bonds? GIC’s are like bonds in that you have a coupon and a maturity date. GIC’s are much harder to sell if you have to exit your position. CDIC insurance covers you for up to $100,000 making them a AAA credit.

High-yield junk bond ETF's. How do they maintain their capital base? About 3% of high-yield bonds will default in any given year. Default doesn't mean it will go to zero. ETF’s do not buy bonds at a premium, but quite often at a discount to their par value. Ideally, an ETF will maintain its NAV and pay out a high-yield stream over time.

Junk bonds. Do you think aversion from European crisis might extend to junk bonds in general? If so, is it time to sell? He would say No. Last week cost of default swaps on European sovereign credits (cost of insurance on a basket of bonds against default) was more than it was on US investment grade corporates.

(Pro shares short bond ETFs. Couldn't understand. Anyone know the symbols?-Bill) An interesting way to take a leveraged play on US treasury yields moving higher. This started to happen but this market is a short end on the yield curve that has been rising. Haven't performed as well as would have been expected. Treasuries are the ultimate safe haven and if crises continue to happen, long-term treasuries should perform well. He doesn't expect this to happen. Good for short-term trading during the next 6 months.

Tier 1 Bonds. Any problems with these in the future? Have had a stellar performance over the last 12-18 months. Believe they will eventually be grand fathered so would be a “buy and hold”. Still offer a good yield.

5-month U.S. Treasury bills. Great place to hide until the end of the seasonal weakness. Historically you want to get back in the market around the beginning of October. This gives you 5 months of cash until the next period of seasonal strength clicks in.

Markets. Looking for a downside risk from now to September of 10% for the S&P 500 and Dow. Historically, in the midterm election year, the markets have peaked around the 3rd week of April. From that point on, they have a steady decline until the end of September. In the Canadian market, the ideal time to buy is near the end of October when the market starts to go higher.

Stop/Loss? When you are wrong, you want to be wrong to only a very small degree. He looks at it at 7.5% from the stock’s high and then again when it reaches minus 10% and then he does an analysis of when to Sell. It all depends on the company, sector, etc.

BMO Deposit Notes Due 7/17/18. This is a straight deposit note. He likes it and would not sell it here unless you want to place your capital somewhere else.

What is a real return bond: Bonds that are indexed to the CPI. So a 3% bond has it’s capital indexed to the CPI and then the 3% is paid on the new principle. Not his favorite vehicle until there is inflation. They do fluctuation in price so you have to hold them to maturity.

30 year Gov’t of Canada Bond 4% 6/1/2041. Capital gain possibility in next couple of months. There is room for long bonds to rally. It’s a short-term play – 3 to 6 months.

(Top Pick May 8/09, Up 11% Total Return) Bell Canada 02/15/2017 5%.

(Top Pick May 8/09, Up almost 2% Total Return) Shorted Gov’t of Canada 06/1/2011 1.25%.