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

Markets. Expects to see markets accelerate over the next few years at a greater than historical rate but there will be more volatility. If you grow earnings, prices sooner or later will follow. Right now we are trading at a low multiple because confidence is low. Corporate earnings, although soft this quarter, are actually headed towards record territory later this year. However, if earnings come on cost cutting, they are not the same quality. Also revenues have not been nearly as strong as earnings.

Markets. In spite of all the bad news, the North American markets are relatively well behaved. If you look at the holdings of gold a year ago by the European countries, Germany had about 3400 tons, Italy 2450, France 2435, Portugal 421, Spain 281 and Greece 111. One of the great problems is getting new buyers for these countries bonds. What can they do? Instead of issuing short-term bonds, as they have been doing, they extend terms. Italy and France could issue gold backed bonds going out in the future 20, 25 years. The 1st conversion rate might be in 3 or 4 years.

Natural gas. The initial run-up in natural gas was definitely short covering. People started realizing that the conversion from coal to natural gas was gaining steam. He feels natural gas price will go to somewhere between $3.50 and $4.50 in one year.

Gold. He sees this in excess of $2,000 a year out because of the way people are losing faith in paper currency. Even though inflation is at a very low rate, people are going to look at governments inability to get the deficit ship in order.. In China, and similar places where culturally gold is much more acceptable, there will be a continued demand for gold as a savings vehicle.

2 or 3 dividend stocks that would be safe from the volatility of future events that could happen in Europe. To some extent, you can't avoid Europe because the price to earnings multiple has come down because of Europe. If you look at utilities, his core positions are Fortis (FTS-T), Enbridge (ENB-T), Trans Canada (TRP-T). Besides these, he has Pembina (PPL-T) and Altagas (ALA-T). These are going to grow their dividends 4% to 5% a year and are not as volatile as the rest of the market. The caution is, these companies are trading at fairly rich multiples but that will continue for a while because there is no competition from bonds or cash.

Markets. When you see the market selloff this much, there's value and you can pick away at it and potentially realize some good returns in the next 12-18 months. The euro zone is going to take time. You are really dealing with global deleveraging. It's governments, financial institutions and households, which is not something that will get fixed in a quarter or two. Canadian economy has held in pretty well. Household debt is still pretty high but the economy continues to do well and if you are going to look at some dividend paying stocks and some of the REITs, they tend to benefit from this low rate environment.

Natural gas. Feels prices will move up pretty significantly in the next 12-18 months approaching $4-$5 MCF. We had one of the warmest winters on record, which caused storage levels to increase which went 65% above the five-year average to just 15% above. Some producers stopped extracting gas. Feels shale gas production will continue to taper off.

Markets. He has been cautious for pretty much the entire year and expects the current volatility will continue throughout this quarter and possibly the 4th quarter. Europe situation is driving the rest of the global markets right now. He is holding a lot of cash and waiting for opportunities.

Bear ETF's? He would caution against the levered ones as beyond a couple of days, you have no idea what a levered ETF is going to be. The only one he could suggest in good conscious would be ProSh Short S&P 500 ETF (SH-N). Wouldn't advise holding it for a long period.

Full position of Global Agriculture ETF (COW-T) and 2/3 position of Agriculture Commodities (ZCA-T). Good time for agriculture? We have a once-in-a-lifetime drought happening in the US, commodity prices have spiked in the last 6 weeks or so and corn is used in so many things, means food prices are going up. However, for individual investors to benefit from spike hikes it is very difficult. Commodity prices are notoriously volatile.

Gold ETFs. One investing in bullion (covered call), plain bullion or one investing in gold producers? Any index that is going to be very volatile, the covered call piece in terms of total return is not very different and underperforms its plain vanilla, so he would go with plain bullion. Regarding bullion or producers, everyone scratches their head on this one. He holds S&P/TSX Global Gold (XGD-T) for the producers and either COMEX Gold ETF (IAU-N) for US clients or COMEX Gold ETF (IGT-T) for Canadian clients for the bullion.

Telecom ETF's? There is none for Canada but the US has Global Telecom ETF (IXP-N) with some international telecoms. Has a yield of about 5.5%. There is also the Vanguard Telecom Service ETF (VOX-N), which are strictly US companies with a yield of 2.9%. This has 45% weighting of AT&T and Verizon.

Markets. We are in a very broad trading range and are at the upper end. We'll probably get some kind of rally in the fall but investors shouldn't get too carried away or optimistic that the good times are here. There will be an economic slowdown and probably a recession next year. The most important thing that individual investors should be doing is to make sure they have the appropriate amount of money invested in equities and make sure that as stocks rise to their price target, they should be prepared to part with some of them. They should stick to good dividend paying stocks and be aware that some of those dividend paying stocks are not as cheap as people think they are.

Natural gas. Should he sell into the strength and buy back later? When it gets under $3, the industry stops as they cannot make money. There is a record low number of rigs drilling for this. Decline rates are very high. Expect you will see $4.50 gas next year and perhaps even $5.

Oil. Gone up recently because of geopolitical concerns. A lot of actions surrounding Iran. Some terrorist attacks where Israel implicated Iran. Also demand in the US has picked up slightly. Fundamentals of supply/demand show that the market is very well supplied. If it weren't for geopolitical concerns, oil would be trading much lower.