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

Rates are rising in 10-year gov’t of Canada bonds. She likes the 7-10 year range. Corporate bonds offer 1-2% above these. A bond portfolio will look like the yield of the portfolio at the end of the year [I think she means no capital gain/loss]. Short-term bonds will likely decline.

GTAA 4.85% 6/1/2017. An infrastructure bond. They are not-for-profit and pass costs on to the airlines. This issue should see an improvement in their revenues if you believe the economy is bottoming and starting to improve.

(Top Pick Apr 13/09, Up 8.4%) Wells Fargo 4.45% maturing Feb 28/11. Achieved the returns she expected and sold them.

(Top Pick Apr 13/09, Up 9.4%) Government of Canada Real Return Bonds. 4% maturing Dec 1/31. . Achieved the returns she expected and sold them.

Increase in central bank interest rate was a signal that interest rates will start to rise late 2010 or early 2011. They see a better unemployment picture and rising revenues. Rates wont go very high due to unemployment rates. The first and second quarter will be easy for companies to blow away their earnings year over year. Looking for TSX to be between 12,500 and 13,000. Dividend stocks under performed the market in 2009.

It would be normal to see some corrective activity about now in the market recovery. People have to be careful about where they have their money and to have some on the sidelines. Thinks there will be a fair amount of share buybacks given the amount of cash on balance sheets.

BMO ETFs: For the most part the low hanging fruit has been picked by the people at iShares. BMO has done a reasonably good job. He applauds BMO for coming out with these.

Claymore has an advisor class of funds. They also use a lot of fundamental indexing. IShares is a Cap-Weighted approach.

Trading ETFs: The ones from Horizons are designed for active trading. If not, look for ETFs that more broadly diversified.

ETF & Mutual Fund: ETFs are more diversified, less taxed butthe main difference is cost – ETFs are much cheaper.

Corporate vs. Government bonds: Corps have much greater risk of going under.

When he was on last labour day, be thought they would be in a range for a year and we are half way through that. The market has found its equilibrium. Strategy is to go with a broader portfolio. Don’t play a sector or time markets. Buy more when it’s down and sell some when it’s up.

Nice rebound because there is a little more certainty about the financial system around the world. No huge returns on the markets in the short term. Question is whether with the stimulus off, will there be growth. We’ll end up with a positive return, but not sure if it will be a huge return. Thinks Greece, Portugal or whoever needs it will be bailed out by the EU. Lots of staples and healthcare in his portfolio. Is selling some stocks with a full valuation.

The fed is not interested in scaring the market so it raises rates very slowly. Stocks are fairly valued. What you should look at is higher paying dividend-paying stocks. It’s a stock picker’s market. Previously a lot of earnings came from cost cutting. Now we need to see earnings from growth. It’s going to take a little while for the economy to heal itself.

You should own good income trusts at this point. Real estate happens to be a good trust structure. Some others will have tax losses to use after they convert. Cineplex is a great trust, for example. West Shore has no debt and lots of cash so they wont stop paying their dividend.