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

Strip bonds. Taxed yearly or a maturity? These are taxed yearly, e.g. you buy a strip coupon at $.80 on $1 that matures at par over the next 4 years. Essentially a $5 increase over time. It is all interest income and you have to pay tax even though you did not get the money.

Long-term Bond for TFSA accounts? Best way to capture yield is through a strip coupon. You are locking in yield and it will compound over time. Good value in the strip market right now. (Strip Bond is where there are coupon payments followed by a final maturity lump sum payment.)

Real return bonds for retirees? On the longer-term view, yes. However, right now they look expensive, using about 1.5% on a Real basis. When it moves a little bit higher again, you may want to put some money in this.

Timing the Market. Market averages is the net effect of all the money in the market. When it starts acting differently, going down, you are able to get out of the market. On April 16 the market changed its behaviour giving a series of losses on higher volume and giving lower lows and lower highs.

Categorizing Stock by Condition. Stocks that are poor performers i.e. going down when they market is going higher, are not worth looking at. Big money goes after the high-growth stocks in the best sectors. When these change, you know the market overall has changed and you can make different decisions.

Where would you put cash if a double dip were in sight? If we are in the double dip, as investors we don't need to figure that out, but just what the market trend is. Market blindsided us this week making new buys very unreliable.

Trade Template. Use an S&P 500 chart and draw a line from the high in April down to the high in June. That is the range the market is trading in. Market is unable to cross over the line on a short-term basis. Most investors should not try to make any money in a correction. If you are going to trade, do it in a trading range the chart shows.

Not buying anything right now and hasn't for 6 months. Has about 10%-20% cash depending on the asset mix of the portfolio. He is looking for a signal of global de-leveraging before buying. Would like to Buy when there is capitulation but hasn't seen it yet. Will watch to see what happens when the Q2 and Q3 earnings coming out in the fall.

Christine Poole's Top Pick of SNC Lavalin (SNC-T) was shown as a Buy yesterday. My apologies. This was a Top Pick and didn't go out with last night's e-mails. Will try to do better from now on. Sorry Christine. Bill

Canadian banks. Posted fairly good earnings last few quarters. Past quarter didn't surprise on the upside like they had in the prior quarter. Loss provisions are declining in a stronger economy. Might get 5%-10% upside this year and dividend yields are 3.5%-5%. Expect very positive returns 2-3 years out. Dividend increases will probably be put off until next year when the capital requirements are sorted out.

Oil drillers - ETF, land driller or ocean driller? Generally doesn't buy ETF’s. Prefers specific stocks. Too early to buy deep-water drillers as there is not enough clarity on the long-term outlook. Wants to see the well gets capped and what new regulations will be and if moratorium gets extended. Would prefer a land-based driller.

The market is in a bit of a no man’s land right now. Correction in May happened mostly because of problem in Europe. Since then there was quite a bit of recovery in the last couple of weeks and now question is where do we go from here. He is taking a wait-and-see attitude. The big picture is that we have been having a good recovery but the momentum is slowing down. Thinks we will risk a double dip. There will be some challenges over the next few months.

REITs: Best risk adjusted sources of good income flow. You can go and pick specific REITs or you can go and buy a fund. Canadian REITs have way outperformed the US ones. If interest rates go the wrong way you can get caught. Look for steady income because there is very little growth anywhere else.

Triple witching today. REITs are in very good shape. The environment is right for them. The economy is in good shape. They’ve taken on debt, extending it at lower rates. Payout ratios have gone down. Income is safer. Economy is not going to take off – certainly not the global economy.