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

Preferred shares. Taxed like dividends but have a set rate. Bought quite a bit when rates for high but with competition, rates have come down and hasn't bought as much. Like them longer term, especially the reset ones.

Banks. If you have to own something in financials, look at Royal (RY-T) or Bank of Montreal (BMO-T). The issue he has is that Canadian banks might be challenged in growing dividends at the same rate as in the past.

Pipelines. Weakness in the sector could be because people have shifted gears and gone back to the offence into economically sensitive names. Expects continued demand for dividend yield but expects to continue seeing volatility with people becoming defensive again. Has no problem with TransCanada (TRP-T) but would probably prefer Enbridge (ENB-T).

RBC bond fund. Hold or switch? With rising interest rates, now would be a time to consider rebalancing your portfolio and switching some of the funds to equities.

Corporate yield spreads have come down a long way and could tighten a lot further because of rising interest rates.

Ontario government bonds will be coming out again and there is always retail participation available. When they do, you should consider participating.

Canadian Tier 1 bank bonds had a substantial rally. If you bought because they were cheap and you are an income investor, he would probably continue to hold. Yields are still fairly attractive. Prices are probably not going to fall too substantially but if you have profits, consider taking some of them.

Corporate Bonds versus Preferred Shares? Corporate bonds are ranked higher as they are more secure. If a company is in trouble the last thing you want to hold are shares. However, preferreds pay more plus you get the dividend tax credit. Buy direct versus ETFs.

Bank Reset Preferred Shares? Had a very good run and continue to throw off a pretty good income. New bank regulations may result in a lot of them getting called and disappearing.

(A Top Pick Oct 19/09. Up 0.33%.) Government of Canada 1.25% Due Dec/11. Recently sold this. Had a very good run up until about December and then the market started to turn.

Shale is the source rock for oil and gas. It’s locked in tighter rock that would not be accessible through vertical wells. Horizontal wells can reach it.

We are at the top of the range that we are going to see for the next couple of months. Oil will be between $70 and $85. Fundamentally, oil is not supported at this level. The run in gas has been pretty good recently due to pretty cold weather recently, colder than last year.

(A Top Pick Nov 10/09. Up 1.9%.) Canada Real Return Bond Dec 2021. Investors should have some type of inflation protection in their portfolio. Sometime in 2011-2012 prices are going to go higher.

Banks have moved up 100% but that was from the bottom and they are still off from 2008 highs. Buying banks has always proven to be a great strategy for long-term investors. Earnings should go higher. His preference is National (NA-T).

Market. Markets have come so far and so fast that, historically, we should have some kind of pullback. Timing a correction is difficult but it is very unlikely we will get through this without a 10% correction.