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

Rebalancing portfolio mix: There was a strong run in equity markets in the last 9 months. It is critical that investors look that they are balanced and not overweight in any equity class. Prepare in case of a market downturn.

Dividend Based Equity. Likes to see an equity position as a dividend-paying stock, since there may be a re-trenchment over the next couple of months.

Gold: Will see $1300 soon. Gold is a very attractive asset. If we do see some re-trenchment and some US$ appreciation, all assets will come down, but gold will hold up much better. Loves the long-term fundamentals of gold.

We are having a very good rally heading into the end of the year and markets have done so much better than anyone could have expected at the beginning of the year. There’s always a concern that the high unemployment rate could lead to a double dip or negative GDP growth. But high unemployment could be good for the stock market because it could lead to continued fiscal stimulus and spending. We have the best stimulus spending going on right now. Leading indicators indicate continued growth for 6-9 months and high beta stocks will do well but over the long run defensive stocks are where you want to be. TRP at 5% dividend is better than .25% interest.

Fear regarding Dubai default and recent history of banking collapse drove markets down yesterday. But it was not as significant as Lehman Brothers. Bonds are a little over bought right now.

Interest rates would have to ratchet up substantially in order to hurt preferreds. He prefers bank common stock to preferreds.

Fairfax Financial Holdings 7.75 4/26/12. You are seeing a proxy on the augmentation on book value. You have the upside on the book value and the coupon is pretty good. Have amalgamated all the subsidiaries into the holding company so they don’t have to dividend that out.

Fusion Trust. One of his top 3 holdings. May be tough for retail investors to get. You are playing the banks in a way. It is distressed, asset-backed paper of National Bank. He would also buy National Bank.

Income trusts have not rallied like stocks and REITs. It is because of the steady stream of distribution

Archer Daniel Midland 6.25% (Top Pick May 25/09, Up 20%) As long as you have the mandate for BioFuels, this will benefit.

Genesis Trust 3/15/10 paired with Gov’t of Canada 5 yr (shorted) (Top Pick May 25/09, Up 7.1%) Pairs trades would not work in this market.

Precious metals. Have had a good run and expects they may pull back but suspects we are in a period of out performance so would add on any pullbacks.

Natural gas. He is right out of the sector as he feels natural gas is way too high right now.

Gold. Thanks it will keep going higher.

Canadian banks. Far better shape than the US or European banks. From a safety point of view he has very little worry about them. Doesn't think they will rise as much as they have but there are great dividend yields on them with some growth.