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

Gold: We are at a resistance level of $986. There are a series of resistance levels that it has to break through to get to an all-time high. Downside risk would be $809. Seasonally it runs mid-November to the end of January as well as from the end of July to the end of September.

Cdn$: Just starting to form a base. The bottom is $.77 and the high is around $.85. Has been in this range for about 3 or 4 months now. There is no trace of momentum as yet. US$ keeps hitting its head against major resistance and once it starts to roll over look for it to decline significantly.

Canadian Banks: Seasonality, have a tendency to be strong from end of February to end of May. Fundamentally, there's reason to believe that they are going to have a very rough 1st quarter. Technically, Toronto Financial Service index break to a new low last week.

Investment Grade Corporate Bonds. Very cheap. Spreads have widened out incredibly. They are acting as though everything is going to go into default and this is a great way of locking in yields and capital appreciation over the next several years.

Gold: Has had a good run but thinks it is going to soften for a bit now because of a shift to financials by investors. There is so much stimulus in the economy that at some point, probably a year out, there will be some serious inflation. At that point, old becomes quite attractive. He’s holding gold through this period. Over $1000 when we get into information.

Bank Preferred Shares: These are good for income but he has chosen not to buy them. Most of them are in the 6%-6.75% area, which you can get in the common shares plus the common shares will go up better when the economy improves.

Gold: On a technical basis looks like it has broken out in the near term. Looking out far enough, once the potential deflation is out of the way, all the US paper that is being issued is going to cause inflation and gold will be a big beneficiary.

Canadian Bank Bonds: Canadian banks have been issuing a lot of debt and he doesn't mind any of them.

Municipal or Provincial? Municipals will generally give you a slightly higher-yield but they are not as liquid so there may be difficulty in selling them. If you need liquidity, he would go to provincials.

Preferred Shares: Represent an opportunity for some capital appreciation.

Banks Preferred Shares: Yields of about 6.25%. There's an old saying that when they banks are selling preferreds, watch out but these are 5 year preferreds. Very generous spread above government’s.

Lifeco’s: Manufacturers (MFC-T) and Sun Life (SLF-T) are probably at the low end of their trading range. He hasn't been adding financials because the whole sector, from a technical standpoint, is unattractive. Doesn't expect very exciting earnings this year. They are both well financed and have lots of money.

Natural Gas: Sees recovery, but not in the near future. The biggest problem right now is that inventory level is too high. It will take the next 6 months to work it out. Sees recovery by next winter.

Bonds: Has been a world sea change by governments to bolster balance sheets but don't seem to be concerned about earnings growth. Because of the global credit crisis, bonds went down as much as stocks so you can now get the same capital appreciation in bonds and get paid to wait. Need to see government and corporate debt spreads normalize before going back into stocks.

Gold: Keeps 5% weighting in his personal portfolio through the SPDR Gold E.T.F.(GLD-N) bullion as well as Barrick (ABX-T) and Newmont (NMC-T). In this way, he owns both the miners and the commodity. If gold really were speculating on inflation, it would be $2000 if not $3000.