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September 20, 2012

Markets: Perception is that markets are weak and so we continue to see weak volumes until people think that economic recovery is sustainable. Correction? Don't fight the fed. Just about every central bank is doing quantitative easing: Japan yesterday, plus UK. The other problem is the fiscal cliff that is expected in January, but he doesn't think that will happen. Raising the debt ceiling is a political issue. He takes a balanced approach. US$ is a good bargain and there is some downside risk of US dollar devaluing more but not a big one. Probably a good time to buy US valued assets.

General Market Comment
September 20, 2012

Markets: Perception is that markets are weak and so we continue to see weak volumes until people think that economic recovery is sustainable. Correction? Don't fight the fed. Just about every central bank is doing quantitative easing: Japan yesterday, plus UK. The other problem is the fiscal cliff that is expected in January, but he doesn't think that will happen. Raising the debt ceiling is a political issue. He takes a balanced approach. US$ is a good bargain and there is some downside risk of US dollar devaluing more but not a big one. Probably a good time to buy US valued assets.

Vikash Jain, CFA
Portfolio Manager, ArcherETF
COMMENT
COMMENT
September 20, 2012

Brazil: You don't need Canadian dollar hedging because emerging markets have undervalued currencies. When you hedge you are giving away some appreciation. He has some Brazil exposure for the long term.

General Market Comment
September 20, 2012

Brazil: You don't need Canadian dollar hedging because emerging markets have undervalued currencies. When you hedge you are giving away some appreciation. He has some Brazil exposure for the long term.

Vikash Jain, CFA
Portfolio Manager, ArcherETF
N/A
N/A
September 20, 2012

Market. QE 3 surprised a lot of people. Basically committing a total of $85 billion a month to support this market so the floor is very much in place. It also creates some tail risks, an abnormal or unusual event happening and when you start to put that much money supply into the system, and basically open the wallet of the Fed into the future as much as it takes, it creates some issues of future inflation. You have to take this into account when investing. Always assume that the most likely direction of the market is going to be the one that it usually takes. Make sure your assets are protected and there is not going to be an unusual event that throws you so far off your plan that it affects your life.

General Market Comment
September 20, 2012

Market. QE 3 surprised a lot of people. Basically committing a total of $85 billion a month to support this market so the floor is very much in place. It also creates some tail risks, an abnormal or unusual event happening and when you start to put that much money supply into the system, and basically open the wallet of the Fed into the future as much as it takes, it creates some issues of future inflation. You have to take this into account when investing. Always assume that the most likely direction of the market is going to be the one that it usually takes. Make sure your assets are protected and there is not going to be an unusual event that throws you so far off your plan that it affects your life.

Gordon Reid
President, GoodReid Investment Counsel
N/A
N/A
September 20, 2012

Dividends. Getting a lot of questions from clients about where they should look for yield. Sees some things happening in the market that are a little disturbing and a little dangerous. People are stretching for yield because basically bond market is not giving them the yield that they want or need. Going into companies that are paying 4%-5%, which is great, but you have to look at what you are buying. If the capital is at risk then you don’t want to go there. You have to look at the company and ask is it trading in the range of multiple that it normally has in the past. For many of these companies it is trading well outside of that range and he thinks there is risk to capital. Also, the long end of the yield curve, the long bonds, is a dangerous place because when interest rates start to rise, there will be a world of hurt in the bond market. Some REITs are paying out 95% or over 100% of their free cash flow, which is dangerous. Look for good growth companies with possibly a 2.5%-3% yield. Pipelines are a good place to look.

General Market Comment
September 20, 2012

Dividends. Getting a lot of questions from clients about where they should look for yield. Sees some things happening in the market that are a little disturbing and a little dangerous. People are stretching for yield because basically bond market is not giving them the yield that they want or need. Going into companies that are paying 4%-5%, which is great, but you have to look at what you are buying. If the capital is at risk then you don’t want to go there. You have to look at the company and ask is it trading in the range of multiple that it normally has in the past. For many of these companies it is trading well outside of that range and he thinks there is risk to capital. Also, the long end of the yield curve, the long bonds, is a dangerous place because when interest rates start to rise, there will be a world of hurt in the bond market. Some REITs are paying out 95% or over 100% of their free cash flow, which is dangerous. Look for good growth companies with possibly a 2.5%-3% yield. Pipelines are a good place to look.

Gordon Reid
President, GoodReid Investment Counsel
N/A
N/A
September 20, 2012

Small Cap US Companies. These are riskier. Bernanke is basically forcing money into the market and it is going to move towards risk assets. He holds about 40 small cap companies so that almost every client has a portion of their asset in US small caps.

General Market Comment
September 20, 2012

Small Cap US Companies. These are riskier. Bernanke is basically forcing money into the market and it is going to move towards risk assets. He holds about 40 small cap companies so that almost every client has a portion of their asset in US small caps.

Gordon Reid
President, GoodReid Investment Counsel