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

GIC’s. Great value. For the 1st time in the last 10-12 years they are yielding more than Government of Canada bonds.

Canada Housing Trust (CMHC). They issue bonds in order to buy mortgages and mortgage-backed securities. Backed by the Canadian government. As a Buy and Hold investor you get yield pick-up.

Real Return Bonds. (Protection against inflation.) Great opportunity for all investors. Currently a 2.1% yield on Real Return Bonds and a 3.6% on Long Canada Bonds. The 1.5% difference is what the market is placing in for inflation for the next 30 years. Inflation has averaged much higher than that.

5 Year Bank Fixed Floaters. You have to be careful and know what you are buying. You can get a yield of over 5% by buying these. Have a fixed coupon for 5 years. If they are not called after 5 years they become a floating rate note.

Rate Reset Preferred Shares. Offering tremendous value right now. Yields to the reset date are in the range of 7%. Very strong likelihood of being called.

Palladium & Platinum: Thinks big money is going to go after gold and silver but there is nothing wrong with these 2 metals.

Stagflation: Commodity prices are firming up ahead of the stock market. Will this put pressure on companies with margins if these companies if the prices firm up too much? Yes. People have to reposition their portfolios differently and be prepared for much higher inflation and much higher economic times.

Leveraging the US$ against the Canadian$ there is either the HBP US$ Bull+ (HDU-T) or HBP US$ Bear.

High-quality corporate bonds. The credit spreads in the marketplace are wider than we have seen in a long time. There is a fear in the market of default but if you stick to the higher-quality companies, it is a great opportunity. Bonds will lead the equity market.

Value-biased equities. If you are looking to get into the market and you like the valuations, the growth side has outperformed over the last 18-20 months to a point where the price/book ratio of value stocks to growth stocks is at its widest point in history.

Preferred shares. Great opportunity in terms of spreads, but also have precedence over common equity. Expect some spread tightening, which will give you, price appreciation.

Canadian bank preferred shares. He owns National (NA-T), CIBC (CM-T) and Royal (RY-T). Getting 6.2%-6.6% along with a preferred tax credit. In for 5 years with a possible renewal.

US$ vs. Cdn$: Doesn’t understand why the US$ is so high. They will have a deficit of $1.7 trillion, which is crazy. There is a relativity aspect here as so many other countries are printing money too.

Silver: Poor man’s gold. Thinks we will see higher inflation in a couple of years and silver will be some sort of a hedge against that. Realize that its industrial uses are fast disappearing. You would do better with gold.

Gold: Has very strong seasonal characteristics. Tends to move flat to slightly lower from end of January through to end of June. He is a long-term bull on gold but you are currently in a period where it doesn't do well. He would wait until July and ending in September.