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

Sell stocks to buy a condo – is Toronto Condo market overheated? Thinks condo prices will come down – HST a factor. Housing prices are relatively high. This is not the season to buy. He would wait. They will slip or maybe they will fall. He loves paying down debt.

Asset allocation is so important in this market. You also have a strong bond component. He is more likely to use an ‘insurance’ put. You should avoid the 2x leverage in ETFs. Doesn’t hold European stocks. He owns 60% ETFs and 40% bonds. Covered calls provide an income stream.

Oil ETFs: Has been buying them in small amounts.

Oil ETFs: Has been buying them in small amounts.

This is a good time for bonds. It’s a volatile time, but a good time. A good time to put new money to work. US Financial space is good. Tread carefully for the below investment grade. If we saw a sustained dip in he housing market and we saw GDP dip he would be more concerned about a double dip. European restraint is going to cause a restraint in growth in N.A. Should be 2/3rds in corporate bonds vs. government bonds.

Not such a good place for bonds with maturity less than 5 years. Mortgage rates wont fall much more. You wont see a significant drop in mortgage rates from here.

Strip Bonds: Don’t mind the provincial space but this is a long-term investment. There is a lot of risk in that increased investment term. You will get some descent yields.`

There will be more interest rate hikes, not at the rate the market expects. The market is already priced at the short tend. Growth will be low and inflation will go down. Royal and TD are good bonds. 10 years and out.

Is it inflation or deflation? He is in the disinflation camp. Fixed income will perform well. Expects lower growth.

Merrill Lynch 5.29%. Low end of where he is putting money. Majority of problems are behind them. A strong franchise. 6.5% on this bond.

Is it a good time to get into long-term Canadian bonds? He doesn’t have a problem but you need to watch them closely. Do your homework. Expecting a low inflation environment for the next year.

The loonie may be back to parity by the end of the year.

There is a recovery underway with a growth of 3-4% in the next year or so. Consumer confidence has been affected by the weak job market. All over the world we have deflation going on. This is good for bonds. Spread between corporate and government has increased. Canada exports 9% to the Euro zones. You should not be shortening term, but lengthening term. Anything past 4 years is the sweet spot.

Real Return Bonds: The first thing you need is inflation and the second is higher yield, so there are not the place to be right now.

Barbell Strategy: Half money in 30-day treasury and half in 30-year bonds. Every 30 days to get half your principle back to re-invest. He sticks to laddered portfolios.