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

Educational Segment. How to get more Bang for Your Buck. How to protect your portfolio as the Canadian dollar weakens. Looking for $0.90 dollar in the next year. Our banks may underperform other markets in the world. BMO have a couple of other fixed income ETFs - hedged and unhedged. You can play US sectors in Canadian, hedged or unhedged dollars. One with a higher dividend is just south of 4%. If Canadian dollar goes to 90 cents but you get a 4% dividend, you might not get any impact from a 10% correction in the US market. You have a choice to access the US market with hedged or unhedged ETFs. You don’t pay US estate tax for High Net Worth investors, using Canadian ETFs investing in the US.

Markets. There are a bunch of red flags in the US. A little different in Canada. Sentiment amongst investors has become overly bullish. Debt levels (margin debt) and short covering. Just like 2007. We are at 3 standard deviations from normal. The last three times this happened, you saw a 10% correction shortly thereafter. Gains in the markets recently are fueled by short covering. He is a little bit more short than normal. He will look at shorting the more cyclical areas of the market. It could be the end of this bull market, perhaps it was last week in that reversal. It will take a little time to play out. We are close to a major peak in global assets.

Market – This is a 48 month old rebound Bull Market. The previous Bull ran 60 months and this one could run longer. The modern Bulls are running longer than the historic Bulls. This is probably because of the global economy. Expect this could rage on for another 12-16 months. He also expects a normal sector rotation into the ones that are lagging. This could favour Canadian energy and materials. In normal sector rotation, the leading sectors are financials, utilities and telecoms which are interest sensitive. Healthcare and industrial would follow. The laggards are energy and materials. 2 examples of places to avoid are utilities (SPDR Utilities –XLU) and REITs (iShares Cdn Reit – XRE). He would definitely go to energy and materials.

Golds. Chart shows a large top had been built from mid-2011 to early 2013 which created a large symmetrical triangle followed by breaking down. Usually what happens during a bear phase is that the big move comes at the end of the bear phase, not at the beginning. He suspects that the drop in 2013 is the end of the bear. When gold was building its symmetrical triangle, the junior golds were anticipating and they drifted lower. The chart shows juniors (ZJG-T) at $7.85 which he thinks is pretty close to a low so he thinks it is alright.

Mortgage rates. Thinks that when they go up, they will go up gradually. He wouldn’t be surprised if we started getting announcements fairly shortly on mortgage rate increases. Not a great deal, but it would be the beginning. If they inch up, it will probably trigger another round of house buying.

Markets. Canadian investors need to be diversified. If you can buy higher quality, cheaper companies with better dividends, then keep taking advantage because it won’t last forever. Asia will continue to grow. Europe will continue to recover and the US will continue to grow. Asia and Australia will do well. For income accounts you need Canadian dividends but if younger you might want 50-60% international.

Markets. Always looks at the big picture. Japan is foreshadowing what’s coming. It is the beginning of the acceleration of money, which is paper money and fixed income. We are starting to see the rush of money coming our way and that is why the US$ is appreciating. It is impossible to get rid of QE. There is a loss of faith in the fiscal system in Japan. The US is in as much debt as Japan but demographically they are behind. Physical gold and precious metals are a small percentage. Gold will be the ultimate winner.

Uranium. Has not owned in a while. It has to be a patient game. It is one that if you are buying it you will have to wait much longer for the momentum to build. There is a massive shortage of physical resource and so it will continue to pick up but the question is when. Likes U-T.

At some point we are going to see that all that debt in the US cannot be paid back and we will then see a loss of faith, just as we are now in Japan. When this happens, Gold is the ultimate money. The end game within this is that Japan causes the US dollar and market to rise. The next 3 to 5 years will redefine the world we live in.

Markets. Just launched an energy infrastructure fund. There will be a 100 billion spent over the next 5 years in energy infrastructure. Pipelines, mid-streams, oil services, and rail. Differential will narrow with the infrastructure build. Rail stocks are hitting new highs. Oil by rail story does not evaporate if Keystone is approved and built. Producers are looking for alternative transportation because pipelines are a monopoly. CPG built rail terminals themselves.

Markets. We went a quarter century before Japan went up. You had to have a pullback.

In general you can have a bad economy and good stock market performance. They are not that connected. 25% of portfolio in income is normal for 50 year olds.

Monthly Purchase Plans for ETFs. Claymore used to offer one but not aware of it being available through do-it-yourself channels. But Claymore was purchased by black rock. It is a bit awkward to do it.

Tax Strategy for High Income with RIFFs. RIFF income can be split. OAS claw-back kicks in at high $60s. You can then use flow-through shares because that gives you a deduction.

Newborn Child. Investment for college is 17 year time horizon. Low volatility world ETF is a possibility. Suggests stocks for first 9 years and then something more conservative after that.

Assessing value of defined benefit plan as if it were a bond. You ask your employer what a lump sum would be for a settlement. How much do you invest to get this income is the value.