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

Over the past 3 years, in the 1st quarter, there has been a 10%-20% decline in REITs, so expects volatility in early 2007, so be cautious

(Government of Canada- 10-year Bond was a Top Pick Sept 27/06. Up.) Yield price has dropped, so the bond price has gone up. Would still Buy. For the gamier players, even 20-year bonds.

Income Trusts: - Possible there could be more weakness because of 1) funds that have redemption dates mid-December and 2) tax loss selling. Could create some good opportunities. Have to be selective.

Financials: - Doesn’t trade Canada a lot, but from what he sees they have run up quite strongly. In the short term, they seem to be overvalued.

Gold: - Likes gold on a long-term basis. On a short-term basis, it’s had a nice run from $575 to $650.

Banks: - They are all Buys. Cheaper than the TSX on a price/earnings basis based on 07 earnings. Yields are all well above the TSX yields. First-class, long-term holdings.

Ace convertible debentures, 4.25%, due June 1 2035. The parent company for Air Canada, Aeroplan, Jazz. If you take out the public pieces, you essentially get Air Canada for free.

US $: - Terminally ill dollar will propel gold to a new high in 2007. The average party has too much debt. Real estate market has now completely died. Expecting to be in a pretty sharp recession in 2007. Forecasting gold at $875 next year.

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.