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

Oil. Very tight and she can't see it going below $90 unless Libya comes back online, which she doesn't expect.

Market: Interest rates: We should be seeing a lot better growth. At this point in the cycle you just clip the coupons. Rise in interest rates is on hold for 6 to 12 months. We’ve never had a cycle where the less developed economies are lending money to the first world. Preferred shares and corporate bonds are the place to be right now. As corporate profit start to approve you want to shift more to corporate bonds. We are not going into a huge slowdown.

Shaw 7.5% bond trading at $111. Professional investors look at the spread between this and government bonds. This one has about 1.2% spread. If you think it will get tighter, then you should sell the bond. Could consider selling it. Go into the preferreds.

Government bonds – what to pay: It is difficult to buy directly from the government. You can work through a broker. Can buy Canada Savings Bonds each fall and you can buy them directly.

BC, Ontario, Newfoundland Bonds due 2025 – should caller redeem? Gov’t yields have dropped and spread from provincial to federal bonds has compressed. He recommends getting out of them and into cooperates.

Real Return Bonds: Protects against inflation for pension funds. Usually very long terms. There has to be inflation for them to work for you.

Floating rate preferred rate shares: Why are they not more popular? Probably because of issuing companies. A small sliver of market place.

Split fixed income portfolio between 3-month T-Bills and long dated corporate strip bonds (Bar Bell): It is difficult to find corporate strip bonds in Canada.

Intac Financial Just did their first preferred share issue and he bought some.

US Preferreds. He would avoid them. He would go with a broader based ETF.

Markets. Very interesting that on the one side there is the European debt crisis and US slowing with employment stalling, versus corporate profitability, which has never been stronger, very low interest rates and stock market is reasonable. He feels the market is cheap and the US should start pulling out and start growing.

TSX. We are very close to the 200 day moving average, which means we are still in a downward channel. We are moving to the upper side of that channel but it is still indicating a bearish trend. US is a little more encouraging word there is more of a convergence in the moving averages. An indication of a thaw would be if we hit 13,000 and13,900 would be an indication we were breaking out of the channel..

Cdn$ versus the Euro. The euro has been bottoming around the $0.70 level. (You need an FX account to trade this.) The pattern is a declining wedge with support in the 70s. if it can break out of that, we could probably see 80 or 90.

Market. There is some interesting historical commonalty as to where we are in this crash. We were at the top of the market in 1972 and fell 50%. Rallied back to where it started in 72. Similar to what happened in 2008. While economics were totally different, investor psychology is basically the same. Takes quite a while for the fear factor to subside. Thinks we are currently in a sideways consolidation. While you are waiting for the market to repair self, get some yield.

Markets. Between now and the 3rd week of July, you can expect markets to go higher. When Independence Day happens in the US, there is usually a nice boot in Cdn and US equity markets, which lasts for a relatively short period of time. This year there is also anticipation of very strong 2nd quarter earnings. The bad news is that when the 2nd quarter earnings come out, there will be warnings and negative guidance. This summer can have exceptional volatility because of the Greek situation, US debt situation, Japanese cleanup, etc.