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

Emerging Markets: - Your best return will be doing research and finding individual companies in regions you are interested in. Access could also be made through some of their banks. The other way would be ETF’s which would have the lowest expenses. Also consider actively traded funds, which were, tend to avoid some of the losers.

Preferred Shares: - He is a proponent of preferred shares where you are getting dividend income as opposed to interest income. Tax on dividend is roughly 20% and on interest, roughly 46%.

Dividend versus Bond: - On a growing company, dividends should increase and eventually pass the rate of return on a Bond. Banks are good examples.

Copper Outlook: - The fervour is in the Chinese demand. They have started increasing their internal production so copper prices have dropped.

REITs were not hit with the rest of the income trust. As a result, their prices went up and their yields came down. Yields are just barely above Canada bonds. Wouldn't buy at this price.

Corporate bonds in North America are not very attractive because yields are so low. The spread between corporate bonds and government bonds has narrowed as everyone has been reaching for yield over the last number of years.

In the US, small caps have been significantly overpriced compared to large caps for a number of years. For the past several quarters, for the first time in a long time, there have been a number of very high quality large caps at prices below what their intrinsic value suggests. Large cap is quite timely right now.

The Japanese market is one of the few markets in the world where small-cap stocks are cheaper given their relative growth opportunity, relative to large-cap stocks. The Japanese consumer stock should lead the way in the next few years.

REITs: - Rational way to evaluate them is in terms of the income stream, the capitalization rate. What can happen in a boom is that rates can be bid up and up as investors speculate. Income stream from high-quality ones are assured and is tax efficient. Valuations have gotten a little ahead of themselves.

Convertible Debentures on Royalty Trusts:- Not a fan of energy trusts because their pool of assets shrinks unless they make acquisitions. Not a great investment.

Downside: - This has to be looked at on a case-by-case basis. If 100% of the cash flow is income, then the value will go down by the tax of 31.5%. A lot of the trusts have tax pools. E.g. on energy trusts it is only the taxable portion that is subject to 31.5% in 2011.

De-conversions: - Expects you’ll see the dust settle first. It will probably be some of the more senior players leading the way. One of the issues is that when they converted to a trust, it was a taxable event and the government received a one-time capital gains tax form investors. Will they tax again on the way out?

Buy/Sell Income Trusts? – There will be some attractive buying opportunities due to a lot of panic selling.

Timing: - Could be some additional downside between now and December 31st, partially due to tax-loss selling by individual investors as well as US selling.

Hybrid Income Trusts: - Companies like Student Transportation (STB.UN-T) or Keystone (KNA.UN-T) are not captured by the legislation. Doubts if you’ll see income trusts converting into hybrid trusts.