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

5 major banks - You either Buy at this point or Hold. You will have terrific dividend growth over the years. Looking at Sept/08 earnings, presuming there are no massive write offs, the P/E’s could be anywhere from 10.5 to 12 based on Oct/08 earnings. His favourites are the Commerce (CM–T) and Toronto Dominion (TD-T) and is looking at Bank of Montreal (BMO-T).

Gold:- Likes the outlook. The price is moving in the short term with other commodities, which have been correcting. With a slowing of the US economy, their government may have to lower interest rates, which should be positive for gold.

Financials – Currently there are ripples of discomfort due to the correction and worries because of the sub primes. However, in the long term they are safe. There has been general erosion, which may continue for a while.

Banks - Some opportunities if you don't have a good position. Have far less sub prime exposure than the US banks. Her 2 favourites are Bank of Nova Scotia (BNS-T) and Toronto Dominion (TD-T). Royal Bank (RY-T) would be her 3rd. Lots of rumours on Canadian Imperial (CM-T) on their exposure to sub primes, so be a little cautious.

Gold - The instability in the market created a flight to quality rather than to golds. If the US$ is going to decline appreciably over the next few months or years, gold is likely to rise. She doesn't invest in gold stocks because it is very difficult to forecast gold prices.

Should know this week whether the market is going to go lower or not. Using the S&P weekly charts, draw a trend line across the bottom and another one across the top. The S&P is right at its support level now. If this is violated, the next target is the February low of 1365, so we have to hold at the current level. The Dow and the Transports must hold this week.

All model prices on financials have been eroding significantly. Interest rates will go up. In general, financials in Canada are in for a tough time.

BCE bonds maturing in 2014 are down 10%. If you are a long-term investor, they will mature and they will not default on them. The fundamentals of BCE are good.

Canada Mortgage Backed Securities STST issued in 2003-CC1 maturing 1/12/13 at 5.33%. Yielding about .65 of 1% more than a government of Canada Bond. AAA rated. 45% is retail property. A good time to purchase.

BCE Bonds. Would actually look at them right now. Fairly interesting. Likes the fundamentals of BCE for the bonds. Long bonds 2035 maturity are 3.5% over government of Canada Bond's.

GMAC maturing May 25/10 at 6%. The riskier of his 3 Top Picks. GMAC owns ResCap, which has exposure to the sub prime market. Taking a lot of hits and if you can get past this, there are a lot of positive things.

Government of Canada or province of Ontario bonds. He is currently looking at the shorter-term bonds. Right now there is an inverted yield curve, so 2 year Canada bonds are 4.7% and 30 years are 4.5%. More value in the 5 year and under from both Canada and Ontario bonds..

Government of Canada – Sept 2009 @ 4.25%. If things do deteriorate in the credit market, you'll be able to sell this.

Interamerica Bank (Iceland) 2008 13% Bond. You are dealing with a kroner yield. You have to dissect the currency. The Icelander kroner is well regarded.

(2029 5.75% Canada Bond was a Top Pick June 14/06. Up 2.1%.) Had believed there was a structural change in interest rates and that real rates would drop.