DON'T BUY
Inverse 10 Yr Gov Bond ETF. Basically going short on 10-year Canada. His view on a 10-year total return basis is low. Returns will be below 2%-3% over the next 1-2 years. Shorting bonds costs money because you have to pay the coupons. Not a buy and hold strategy.
DON'T BUY
2020/2021 4% bonds. Company is a very good solid single A credit. Comparing their yield to some other companies in the space, they are a little expensive.
COMMENT
Canadian Bank Tier 1 Bonds and the call feature? Bonds can be called on a change in regulatory or tax regime. With the coming change in taxes, there is a risk these could be called early at par.
BUY
Cdn Corp Bond ETF. Probably provides best exposure to Canadian corporations. Probably yielding 3%-3.5%. Holds everything from 1 year to 30-year bonds. You could also look at some of the US ETF’s such as iShares Corporate Bond ETF (LQD-N) where you could do a little bit better.
HOLD
Bonds callable February 16/11 and due 2016? Feels this will definitely be called in 2011.
SELL
Greater Toronto Airport bond due 2027 paying 6.45%. Trading pretty expensively right now so might be an opportunity to take some profits.
SELL
Real Return Bonds. Taxes a factor when determining inflation rate? You face taxation every year on implied increase in value on your bonds based on a change in inflation. He recommends these for tax-exempt accounts only. Right now they are very expensive.
HOLD
10% strip maturing 2024. These strip bonds always go up providing a company doesn't default. High yielding securities.
TOP PICK
US High Yield Bond Index Fund. Thinks high yield, as an asset class, will outperform investment grade bonds over the next 12 months. Yields are in the area of 8% versus 3% or less in the overall bond market.
TOP PICK
4.079% bond due August 20/15. Trades relatively cheap compared to the banks. Getting 3.75%-3.85% yield giving you about 1% more than a GIC or bank senior deposit note.
TOP PICK
4.37% bond due September 13/17. Gives a little over 4% yield.
PAST TOP PICK
(A Top Pick Oct 19/09. Up 1.86%.) Government of Canada 1.25% Due Dec/11.
PAST TOP PICK
(A Top Pick Oct 19/09. Up 13.24%.) Still looks good.
PAST TOP PICK
(A Top Pick Oct 19/09. Up 16.32%.)Emerging market credit spread.
PAST TOP PICK
(A Top Pick Oct 2/09. Flat.) Gas prices have not recovered. Turnaround will come but taking a lot longer than he thought it would.