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

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Gold. The pullback of $1220-$1090 has surprised him. Thinks you should still be in gold but he is not looking for $2000. 1200 to 1250 would be reasonable and as it gets back there in the next 6 months, he will lighten up his holdings.

Strip Bonds. Coupons are stripped so you only have the cash at a future date. Good in a portfolio where you want some longer-term duration as they normally have a longer term than an average bond.

Canada 2% 2014 Bond. Only yields about 2.8%-2.9%. If you have a low risk tolerance, it is probably an okay security. He would prefer corporate bonds.

When to sell a bond? Before he buys a bond, he sets a target price to exit out of the position. E.g. if he buys a government bond with a 4% yield and he thinks rates are going to drop 25 basis points, when it gets to those levels he will start exiting. For corporate bonds, if this spreads narrow significantly on a short-term basis, he would probably sell it a bit ahead of time.

Gold. Decent play as he thinks the US$ is going to be weak, which will cause the price of gold to go up. Any hiccups or downdrafts in the equity market could cause gold to appreciate.

Canada Housing Trust 1 3.75% maturing 2020. Good holding for a Tax-Free Savings account? Yes because all the income is taxable and this is not too long of a holding. Better than having money in a bank.

Case New Holland 6.15% maturing Dec 15/12. This will reset at CEDOR (Canadian Deposit Overnight Rate) every month plus 575, which is currently at around 40 basis points. Likes this is a hedge because of its floating-rate.

He is thinking of an ‘L’ shaped recovery. The market came back too far too fast. Wont re-visit March lows. 0-2% GDP growth, slightly more globally. 10-20% cash. Three areas: 1. Emerging Markets - Brazil, India, China; 2. Commodities - Canada, Mexico, Australia; and 3. Laggards – US, Europe and Japan, where the growth will be slower.

Biggest Green investors: Spain – real estate bubble has burst. Spain has leaders in solar panel manufacturers and some utilities are among largest of the green spaces. German, Denmark, and Spain are leaders for wind and solar power.

Gold. Had been overdue for a pullback. US$ had a bounce, which he thinks will be short-term. Looking for $1200 to $1250, will consolidate and then go to $1500. Gold stocks are a great opportunity as they are not reflecting $1080-$1100 gold prices. His selections would be Barrick (ABX-T) in the seniors and Red Back (RBI-T) and Yamana (YRI-T) in the midsize.

Canada bond 3.75% due June/2019. Government yields have risen almost 50 basis points this month, which he didn't think would happen. There really is no bear story for bonds. This will be a trade in probably 2 to 3 months as he thinks there is a good chance they will go down to 3%-3.25%.

Top Short Short Canada 1.25% maturing Dec 1/11. Yield curve will flatten in 2010 with these yields rising back to where they should be.

(A Top Pick May 08/09. Up 39.2%.) Trinidad Energy Services 7.75% maturing July 31/12 yielding close to 9.5% to maturity.