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Today, Hank Cunningham commented about whether BCE.TO, BAM.A.TO, X.TO, CLF.TO, CBO.TO, S.TO, XHY.TO, SC.TO, BPO.TO, TLT, TA.TO are stocks to buy or sell.

PAST TOP PICK

(A Top Pick Jan 29/14. Up 3.1%.) 5.29% bond maturing April 25/17. This was part of his “rolling down the yield curve” strategy, to take advantage of the steep yield curve. You buy 3, 4 and 5 year corporate bonds, and as they get shorter in term, they fall in yield and up in price, because they're getting closer to maturity and the spread narrows also, because there is less credit risk as the bond shortens.

PAST TOP PICK

(A Top Pick Jan 29/14. Up 2.96%.) 2.36% bond maturing May 24/18. This has rolled down the curve with a positive return of over 3%. It will continue to generate positive returns.

DON'T BUY

Thinks the boom is over in the high-yield market, and the price of this particular ETF will likely work itself lower. Very liquid and very diversified, but a major percentage of the bond held in this ETF is in the energy patch and there is a lot of concern about some of the credit worthiness of some of the issues as long as the price of oil stays where it is or goes even lower. Thinks you will get a chance to buy it cheaper.

BUY

Likes the 1-5 year corporate laddered ETF. It is a nice, safe ETF and you will get the kind of returns that he has shown in Past Picks. This is better than cash and is very safe.

HOLD

7.5% Sept 24/2020 bond? This is one of the better firms that is dealing with the street. Just redeemed a lot of their bonds early and replaced them with a longer term bond. They have a balance sheet where there are no forthcoming principal maturities that will cause them any anxiousness in the bond market.

COMMENT

iShares 1-5 yr Ladder Corp Bond ETF (CBO-T) or iShares 1-5 yr Government Bond ETF (CLF-T)? He prefers this one because the risk is very low and it is a very well diversified short-term portfolio and will give you extra yield over time over the government one. If safety of capital is paramount, then he would suggest half-and-half.

COMMENT

iShares 1-5 yr Ladder Corp Bond ETF (CBO-T) or iShares 1-5 yr Government Bond ETF (CLF-T)? He prefers the corporate one because the risk is very low and it is a very well diversified short-term portfolio. It will give you extra yield over time, over this one. This one will suit those who are risk adverse and willing to accept lower returns. If safety of capital is paramount, then he would suggest half-and-half.

N/A

How do I find detailed information preferred shares? The most comprehensive source for preferred shares information is Hymas Inv Canada (WWW.HIMIVEST.COM) and has more information than you can ever digest about preferred shares.

SELL

7.65% bond due Dec 30/31? If you own, he would suggest you sell. He doesn't like long-term corporate bonds. You probably have done well on them, but he would like you to have something shorter term than that. You are going to give up income and yield if you sell them and he thinks Bell is going to make it to 2031, but rates could rise in the next year or 2. Long-term bonds are subject to price swings.

N/A

Holding 2021 Real Return Bonds? He would consider holding these. These are fairly short-term and are the shortest Real Return bonds in the market. There is not much downside risk in these, even if the yield rises sharply.

N/A

Energy bonds. Some of the spreads may be widening out. Would this be an opportunity to lock in a higher yield? What names would you recommend? He would not be touching any of the convertible bonds, unless he felt the price of oil was going to rebound. An ETF might be the better way, as picking individual oil bonds is fraught with difficulty, unless you buy a package of them.

TOP PICK

3.25% bonds maturing Oct 3/18. One of the themes in his 3 picks is quality. He is taking cautionary measures to guard against BBB bonds starting to underperform the market. Also, preservation of capital in these very low rates is #1 in his mind.

TOP PICK

3.95% bonds maturing Apr 9/19. One of the themes in his 3 picks is quality. He is taking cautionary measures to guard against BBB bonds starting to underperform the market. Also, preservation of capital in these very low rates is #1 in his mind.

TOP PICK

3.25% bonds maturing June 17/20. One of the themes in his 3 picks is quality. He is taking cautionary measures to guard against BBB bonds starting to underperform the market. Also, preservation of capital in these very low rates is #1 in his mind.