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

Preferred Shares: Represent an opportunity for some capital appreciation.

Banks Preferred Shares: Yields of about 6.25%. There's an old saying that when they banks are selling preferreds, watch out but these are 5 year preferreds. Very generous spread above government’s.

Lifeco’s: Manufacturers (MFC-T) and Sun Life (SLF-T) are probably at the low end of their trading range. He hasn't been adding financials because the whole sector, from a technical standpoint, is unattractive. Doesn't expect very exciting earnings this year. They are both well financed and have lots of money.

Natural Gas: Sees recovery, but not in the near future. The biggest problem right now is that inventory level is too high. It will take the next 6 months to work it out. Sees recovery by next winter.

Bonds: Has been a world sea change by governments to bolster balance sheets but don't seem to be concerned about earnings growth. Because of the global credit crisis, bonds went down as much as stocks so you can now get the same capital appreciation in bonds and get paid to wait. Need to see government and corporate debt spreads normalize before going back into stocks.

Gold: Keeps 5% weighting in his personal portfolio through the SPDR Gold E.T.F.(GLD-N) bullion as well as Barrick (ABX-T) and Newmont (NMC-T). In this way, he owns both the miners and the commodity. If gold really were speculating on inflation, it would be $2000 if not $3000.

Guinness Brewers. (Can't find a symbol.) Would rather be in Diageo (DEO-N). They have a huge portfolio of spirits. These tend to be defensive stocks and tend to under perform when the markets come back.

US$: Our dollar is very much tied to energy prices and he doesn't expect it to strengthen against the US$ a great deal.

Gold: Bullish on the outlook for gold and expects it will trade over $1000 sometime this year.

GE Capital 5.37% maturing 2037. 8% return and trades at a tremendous discount so there is also a chance of getting a capital gain. Wins 2 ways. 1) If long Canada yields drop yields will drop with it. 2) If they go back up, credit spreads will come in and prices will go up on corporate debt.

(A Top Pick Dec 28/07. Up 5%.) GMAC Canada 5.10% maturing April 30,2009. Hardest investment he had to deal with in the last 6 months. Felt that GMAC Canada was the 1st protector of his bond. Got funding from the federal reserve so are now qualified as a bank. Planning to mature these in 4 or 5 months and won't go back into them.

(A Top Pick Dec 28/07. Down 3%.) National Bank 4.70% maturing Nov 2/2020. This was a good pickup in yields. Bank should survive as it is well capitalized. Still yielding 6%-7%.

Yield Curves: Incredibly steep right now. This tells you that the economy is in trouble. Once there is a recovery, short-term rates start spiking up and long term rates don't go up as far.

Bonds: Very difficult for the individual investor to buy and get pricing information on many bonds. His suggestion is to have 2 discount brokerages so you can verify the pricing.

Preferred Shares: If a company goes under, preferred shareholders have first call vs. commons. They give you higher interest than common shares and you also get a tax break. Not a great thing for an RRSP or RRIF because everything is sheltered in these.