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

The question was on low risk ETF's. Try Powershare 1-3, (PFL) in Canada with short term floating rate corporate bonds and GSY in the U.S. for relatively low risk and a yield of 5.2%. You do not necessarily have to go to cash accounts. Investments savings accounts are another option.

The question was on buying a good ETF for her seven-year-old granddaughter. He suggested QUAL i-shares with low leverage, high returns and big name securities. Also VID in the U.S. with rising dividends. There are also Canadian versions. At this point you want stocks with more growth and good quality names. If withdrawals are needed for school you can dial back to 75% or even 50% at the 3 or 4 year mark.

We'll see a slowdown, likely a mild recession, though not guaranteed. Shallow and short, driven by the consumer who is definitely weakening, but has held up this long because the government gave so much stimulus. Meanwhile, huge infrastructure projects have barely begun and will carry the economy through the slowdown. Expect a recession on Main St, but not on a Wall/Bay St.

Believes economy is at the end of rising interest rates. Likely that within the next 12 months - US Fed will drop rates. Investors have been lulled into false sense of security. Preparing clients for when markets soften. Canadian Telco & Utility sectors have become under valued, and are presenting opportunity for investors. Structured Notes with higher yields offering investors big opportunities. Has been limiting exposure on service related companies (airlines, hotels, cruises). 

Weekly Market Summary:

US Consumer Price Index (CPI) in September comes in hotter than expected, which slowed to 0.4% month over month from 0.6% in August, but still slightly higher than the expectation of 0.3%. While oil prices surge on fears of Middle East conflict will put more pressure on oil supply tightness. The Canadian dollar was 73.2 cents USD. The U.S. S&P500 ended the week slightly up 0.8%, while the TSX was up 2.0%.

A lot more greens this week than reds. Energy and materials gained 7.1% and 4.5%, respectively. Financials added 1.2%, while real estate edged up by 0.6%. Consumer discretionary and consumer staples both added 1.2% this week. Information technology ended the week down 0.6%. The most heavily traded shares by volume were Tamarack Valley Energy, Baytex Energy, and Crescent Point Energy.
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Yes. People had expectations on the resumption of Chinese growth that haven't been expressed either in the domestic market or in demand for natural resources. We're seeing concerns about that both in commodities markets and in resource equities markets.

This will change, but for the time being it's an overhang.

Inflation will be higher than people expect, for longer.

Government debt in most western countries, in addition to being increasingly difficult to service at high interest rates, shows no signs of abating. Appears that the only way out of this debt trap is to do what they did in the 1970s, which is to inflate away the net present value of the government's obligations. 

Repayment from a government is a less certain prospect than from private borrowers. Private borrowers usually build an asset that contributes to repaying that debt. But repayment from a government relies on taxes from taxpayers. 

The bull story is intact. He's a uranium bull. The trigger has been that the pace of Japanese restarts has picked up. Japan is the second-largest uranium market. The game is really and truly on.

Silver has disappointed investors over the last 3 years; all are in the penalty box. He's attracted to silver because it's unloved, and he's shopping for stocks. Warren Buffett said "Buy straw hats in winter." When the silver market turns around, and it will, the silver stocks will participate.

Very attracted to copper, because he thinks in 5-6 year terms. We've underinvested in copper, and it's essential for the ascent of humankind. Any stock recommendation really depends on an individual investor's circumstances.

For most investors, the best strategy is trying to capture the market beta, which is the outperformance of the commodity relative to the market in general. You might want to own the very largest and very best of the natural resource companies, such as BHP or RIO.

If you were willing to take some risk in smaller companies, he's done well with LUN and expects that to continue.

They have been, as has anything that's selling as a yield stock. But that doesn't mean they should be ignored. If you're looking for yield, then banks, utilities and pipelines offer a relatively stable source of income. Despite the capital ups and downs, they're not a bad place to be looking at the moment. 

With the banks averaging 5-7% yields, that's pretty attractive. Any of them would be loathe to cut the dividend. Compare that with what you could get on a bond, and it's pretty good. You also get the dividend tax credit, and the prospect of the dividend growing. 

No, we haven't. Takes a while to filter through the system. With everything else that's going on in the world, we're going to see higher rates for quite a bit longer from here. 

What's happening is that since the financial crash, we've been living in an artificial world of very low rates. When rates get around 2% or lower, investors try to stretch to get yield and take higher risks than they might otherwise. We're seeing a bit of a reconciliation in all that as things change. 

With geopolitical uncertainty in the world right now, two wars going on, and a US presidential election coming up next year, it points to more uncertainty for the foreseeable future. It would be wise for investors to take more of a cautious, conservative approach to the market.

He does. In normal times, what you're trying to emphasize is total return, whether it's capital or dividends or a combination of the two. His clientele is such that a lot of them prefer the income side, so he tends to own more dividend-paying stocks than otherwise.

With pipelines and utilities, it's determined more by cashflow than by EPS. But in normal circumstances, he likes to see earnings covering the dividend.

With utilities and pipelines, they all exist on the high leverage of borrowed money. In the current environment, that money is rolling over at higher and higher rates. For the most part, they are allowed a decent return on equity. They provide necessary services to customers.