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

Gold. He tends to buy gold itself through an ETF such as Comex Gold ETF (HUG-T) or SPDR Gold (GLD-N). He has a problem with buying single companies because of possible Operating problems. iUnits Gold (XGD-T) gives you a basket of senior producers.

Markets are fully valued. It was due for a pull back and we are getting it and hopefully we get a little more. You should be buying on weakness over the next couple of weeks. Technology, rails and transportation are going to benefit. The US banks could be bought on a pull-back business. Canada is a great place to invest in general. You have 55% of capitalization amongst Canada and the US. CAD$ will continue to be a strong currency.

Market: - Looking for a correction of 4%-5% between now and year-end but could be a little sooner than looking for a positive market. About 15%-20% cash in his conservative accounts. Heaviest weighting is energy. Limited amount in base metals and 15%-20% in gold. Banks are roughly 10%.

Canadian Banks: - Expecting earnings increases in 2010 over 2009 of about 1%-1.5% but going up to 10%-15% in 2011. Likes the banks and even if you have to wait for 2011 earnings will be much higher.

Bonds. Because there is no inflation, he thinks rates are going to go drop making this a pretty good time to buy. In particular, 10-year bonds are going to fall at about .5%. For terms of maturity, he would suggest 5 to 7 years.

US treasury bonds. He is bullish on government bonds and thinks they are going to go to 3%. He uses ten-year bonds, which are at 3.5%. Rates are going to fall.

Convertible bonds. There are some risks. They are subordinate to any other debt the company has. You also have to be very comfortable with the equity that they are converted to. A “buyer beware” market right now.

Corporate bonds. There are still opportunities in the Canadian bond market that has seen a very strong contraction in credit spreads from the beginning of the year. We still haven't reached what is considered as normal levels.

US treasury 3.625% maturing Aug 15/19. Bond market has been very stable and so has the inflation rate.

(A Top Pick May 8/09. Up 55.7%.) Trinidad Energy Services 7.75% maturing July 31/12 yielding close to 9.5% to maturity.

Agriculture. Monsoon season never hit in Asia, which means food production is down 15% and there will be problems with rice crops. In North America, wheat and corn prices have gone up all of a sudden because of the weather patterns. Early winter is setting in.

Natural gas. Over the next 6 to 12 months he is looking for a good move out of these stocks with gas prices being moderately higher. Looking for lower inventories and the spring partly because of seasonality but also because of stronger demand.

Everyone seems to be beating earnings, but most if them are coming from cost cutting. We need to see revenues and earnings revised upward. They are very heavy in cash with new money. Some people have been stopped out in the last couple of weeks. Financials have been moving sideways for a little too long. US$ is in a long downward trend. Gold and Gas will go a little higher from here. Could hold gold instead of cash.

We are probably in a bear market where multiples are contracting