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

Will all income trusts other than REITs be taxed in 2011? Business trusts, oil and gas trusts, and the infrastructure trusts will all be taxed in 2011. Tax does not apply just to distributable cash, it applies to their taxable income. The actual tax will vary depending on the taxable income they generate. Tax will not apply to REITs as along as they meet the guidelines to be qualified as REITs. Seniors housing and lodging will not quality.

Loves precious metals as he expects a depreciation of paper currencies and moving to a new basket of currencies including gold. There is also a concern about solvency of various nations and the amount of debt they are taking on.

(A Top Pick Jan 29/09.) Investment grade corporate bonds. Not as much spread now so you want to be out of these and looking at other things.

Japan or China and which sector? Japan historically is a cyclical play in the economy so should do well with a reasonable global recovery. If you want to play this, he would suggest doing it through an ETF. You also have to be careful because of the strong Cdn$.

Technology? Likes the tech sector and thinks there are great opportunities. Companies he likes are Microsoft (MSFT-Q) and Cisco (CSCO-Q). He also owns RIM (RIM-T).

(A Top Pick Dec 29/08. Up 134.66%.) Sprott Gold & Precious Minerals fund.

Gold stocks. When the market falls dramatically and gold prices do not change very much, why do gold stocks fall in relation to other stocks? When a market falls dramatically, investors need liquidity so gold stocks just become stocks.

Gold. The peak of $1200 has not been achieved again. There has been a lot of selling. Not bullish on gold.

Canadian banking sector over the next 12 to 36 months? Performed particularly well through the crisis. Doesn't expect dividend increases will be forthcoming for a while. Earnings will be stable. (See Top Picks.)

US financials. These are to be avoided. There has been a big recovery but there is a lot of write-offs and challenges to come, particularly from residential and commercial real estate.

Water. This is going to be a scarce resource. You could look at companies like General Electric (GE-N), which is very diversified. While the longer-term theme has some benefits, you have to watch the concentration of companies within the ETF's.

Gold prices. Reasonable probability of gold reaching $2000 in the spring of 2010 but doesn't like putting hard targets on specific dates because market isn't totally free. Feels it will hit $1300-$1400 by late spring. Important to focus on the trend, which has been up for 9 years. Ignore corrections and use them as an opportunity to add to your goal positions.

Gold/Silver ratio. Very bullish on Silver. Ratio in the neighbourhood of 60 to 1 but historically has been in a range from a low of 15 to 1 to 100 to 1. Expects the ratio to fall significantly when this bull market starts to pick up speed and he expects silver to go up dramatically.

Gold stocks or gold ETF? Not a great fan of gold ETF's. He can’t be convinced they are backed with the amount of gold they say they are. Also, the people that have been sponsoring them are the same ones that have been involved with the gold suppression scheme for 15 years.

Does a gold price lead to more M&A activity? He feels it should, especially in a larger gold company.