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

Canadian Bank Preferred Shares: One of the last places there is value is the fixed income market in banks. They are not low risk, but rather moderate risk. You have to watch the call features and the redemption features before you buy. 75% of market is owned by retail.

When you buy a bond, you don’t have to look at the price over the term. When it matures you will get paid plus the interest.

We are at an over all, long term low in interest rates. The 24-year government strip is guaranteed to rise over time.

Real Return Bonds: Not a good time to buy them. It’s guaranteed, and that is worth something.

Floating Rate bonds. A bit better than holding cash. Rates will go up over time so your rate will go up.

(Top Pick Jun 25/10, Up 12.6%) GE Capital Australia 5.75% 01/2011 10% of gain was Australian dollar against the Canadian.

Market: We are on the RISK-OFF side of the market. We expect stormy weather in the markets. He thinks people should be waiting until August/September. He is looking at 5-10% correction from here. Commodities are his best investment idea. They will go higher even if emerging markets only expand 5-6%.

Economic data in the last few months has been weaker and the misses have been larger and larger. Employment numbers are not good and it looks like we are entering a period of softness. Also, US quantitative easing is ending at the end of June. Expect the market will end the year higher but not significantly.

Market. Feels S&P is in danger of breaking down through crucial support level. Would like it to stay above the 1,300 level. If it drops much below that, we’ll probably see 1,260. Also, bond yields are dropping and copper held And these things are pushing against an equity drop. No clear picture but will have a better idea after tomorrow.

A little over 2 years into the economic and market recovery, so not a surprise to see a pause. This pause has been exasperated by slow employment growth and housing. This time we are looking at the European debt situation, which is causing a lot of worries. TSX and S&P 500 are down about 5% and a little below their 50 day moving averages. So far they’re OK. A break below the February low would be temporary and is looking for a reacceleration as we get into the fall.

Risk premiums on equities currently in the market are so high that equities are incredible value. Expect there will be a transition to equities because of strong corporate earnings and the fact that stocks are cheap. Professional investors are very timid so markets have been range bound.

Uranium in a power plant is a very acceptable way to create power. There are so many project on the books for just the emerging nations alone that it will more than take care of demand. Doesn’t think Germany is actually going to follow through with not continuing using nuclear power. Good time to take advantage of the market knee jerk reaction.

Market: We are seeing so many divergent variables now that it is very hard to predict where things are going. The market has moved up so much over the past couple of years that the upside is more muted than it was before and the risk has increased. This time of year is not usually very good for stock markets so he likes to do research but not a lot of buying. Sold off about 25% of his portfolio. Likes SU real estate, financials and banks.

Effect of rising inflation and increased interest rates on REITs and how do you protect yourself? Hard to give an answer. Moderate inflation and good positive credit spreads, real estate could do alright but if it gets too high and interest rates come up, obviously it will get hurt.

TSX. We are in a major bull market. Market had a major low in 2009 followed by an up leg into the summer of 2010 when there was a pause. There has been another up leg ever since. The Toronto market is now at the point where it had the rally, had the pause and now ready to make a new up leg. Give the correction another week or so and it should start something new. His target is 15,500.