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

Market: Last week people were exiting without any regard to fundamentals. He thought had to go to cash himself. Not making any major changes to his portfolio. We are seeing new leadership starting to emerge. The good stocks in the next year will not be the same as the last. Sees a 25-30% move in the markets in the next year.

Getting more and more challenging to find decent growth in income stocks. With the Fed committing to keeping interest rates low for the next 2 years, dividend yields on a lot of stocks are starting to look very attractive. These are companies that should be able to grow their payout ratios over the next few years. Raising dividends is very important rather than paying out a one-time dividend.

REITs. What happens if property values fall? REITs sold off quite hard in the last sell off but probably because investors were looking for liquidity. Right now this market offers some tremendous opportunities. There should be a good few years in this space.

Oil. Where there is fear, there is opportunity. The most important thing to look in oil demand is emerging, economic growth. Power demand in China was up 12% last month and they account for 50% of oil demand. Tanker rates have been very strong. Global inventories are much lower than last year.

Market. There was a lot of fear last week. You could see it in prices as well as the way the market reacted. Almost everything was oversold. Friday and today felt quite a bit more normal. His equity portfolio has about 18% gold and 17% cash. Expect there will still be volatility over the next 3-4 months as Europe and the US economy is sorted out.

Markets. There is a big spread between bond yields and equity (earnings) yields so he is currently investing in equities.

Markets. Real estate is a good place to park money in times of uncertainty. The world is looking for income and REITs in Canada are providing a very high yield, which is sustainable. They have all brought their payout ratios down to 80%-90% as well and their basic businesses are sound. Earnings are very safe.

Markets are in a crisis of confidence. He continues to put strong emphasis on asset class diversification in equity and bonds so there is as much cash flow coming in as possible and when markets drop-off like this, there is more cash to reinvest in high-quality assets.

Markets. It's going to take us a long time getting out of this so you have to be defensive. Don't take action and sell during this period, but wait until the market stabilizes. There will be more market plummets so make sure your portfolio is set up for the long-term so that you can take advantage when the market recovers.

Canadian banks. Low interest rates will spur people to make other investments which is good for them. The negative is the net interest charges as they will make less money on their spreads lending out to investors. Earnings will continue to grow. His favourite is National Bank (NA-T) followed closely by Bank of Nova Scotia (BNS-T) and would be a buyer today.

Market. Investors have to remember this is the summer and there is probably buyer exhaustion. A real case could be made that this is just an overreaction and a very large correction. Currently buying companies with pristine balance sheets. Continues to like earnings yield, which is earnings over price, as opposed to PE. Big divergence between Earnings Yield and Bond Yield.

Sectors. Betting against consumer cyclicals, retailers (particularly in Canada) and some US retailers. Recently have been shorting some restaurants because of rising commodity prices and weaker consumer buying.

Market: It’s touch to figure out what is going on. Investor psychology. Lot of day traders. It’s China, Asian, Europe and the US downgrade. They all moved up in a short period of time. He did some buying Friday, Monday and today. He is cautious that the market is complacent about these issues. He is buying US equities – tech, consumer discretionary and staples. Doesn’t think banks are great long term. Sees good value in the energy sector. The energy crisis is not going away anytime soon. Odds of recession are 1 in 3. Markets thing it is a greater chance. Growth will be slow. Oil prices being down is a big stimulus.

Preferred shares: Play an important role, particularly in income. Pay attention to credit quality. Perpetual maturity makes them volatile. Some can be called on you. Yield to call date can be quite poor in some cases.

Program was interupted by the US President's speech, so only 2 Top Picks were made. Also no Past Picks were commented on.