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

Guinness Brewers. (Can't find a symbol.) Would rather be in Diageo (DEO-N). They have a huge portfolio of spirits. These tend to be defensive stocks and tend to under perform when the markets come back.

US$: Our dollar is very much tied to energy prices and he doesn't expect it to strengthen against the US$ a great deal.

Gold: Bullish on the outlook for gold and expects it will trade over $1000 sometime this year.

GE Capital 5.37% maturing 2037. 8% return and trades at a tremendous discount so there is also a chance of getting a capital gain. Wins 2 ways. 1) If long Canada yields drop yields will drop with it. 2) If they go back up, credit spreads will come in and prices will go up on corporate debt.

(A Top Pick Dec 28/07. Up 5%.) GMAC Canada 5.10% maturing April 30,2009. Hardest investment he had to deal with in the last 6 months. Felt that GMAC Canada was the 1st protector of his bond. Got funding from the federal reserve so are now qualified as a bank. Planning to mature these in 4 or 5 months and won't go back into them.

(A Top Pick Dec 28/07. Down 3%.) National Bank 4.70% maturing Nov 2/2020. This was a good pickup in yields. Bank should survive as it is well capitalized. Still yielding 6%-7%.

Yield Curves: Incredibly steep right now. This tells you that the economy is in trouble. Once there is a recovery, short-term rates start spiking up and long term rates don't go up as far.

Bonds: Very difficult for the individual investor to buy and get pricing information on many bonds. His suggestion is to have 2 discount brokerages so you can verify the pricing.

Preferred Shares: If a company goes under, preferred shareholders have first call vs. commons. They give you higher interest than common shares and you also get a tax break. Not a great thing for an RRSP or RRIF because everything is sheltered in these.

Corporate Bonds vs. Equities: Bonds are showing very attractive yields. Upside is limited. If interest rates recover you don't have any upside. Attractive yields are in the much longer bonds, which is not something she would not be willing to commit to. Large cap equities, because their value has dropped so much, are showing very attractive dividends, quite comparable to some corporate bond yields.

Gold: Feels gold companies are not valued properly in relation to the underlying commodity. They're usually quite a premium associated with them. She can't justify the valuation levels so she is not interested for a long-term investment.

Banks. Preferreds or Commons? Prefers the common shares at this point in that they are providing good dividends and have the upside of a common stock.

S&P 500: Present lows will probably hold, so the risk/reward from this level is really good. Could fall a little further down to its support level in 2003. Q1 should be pretty good.

Financials: Offer only a limited upside from this point. US financials have a greater downside risk than Canadian.

Oil: $75 is serious resistance on the upside. Market is still very nervous. Once a rally gets started a little bit then there will be more time to make reasonable investments.