Asset Allocation July 15, 2007:

The Asset Allocation Model is unchanged for July with 50% equity, 20% bonds and 30% cash. I will continue to hold a larger than average cash position in anticipation of a sell off in the equity markets, a little patience will be rewarded.

The equity portion of the allocation should continue to be 30% Canadian, 30% Asian, 20% Latin American and 20% Japanese. I would continue to avoid the European and American markets where valuations are a little too high and the strong Canadian dollar will likely produce negative results in those markets.

In the Latin American allocation investors should not have any exposure to Venezuela, Bolivia or Peru due to the political instability and anti foreign investment stance held by the leaders. These three countries have a history of nationalizing industries that are profitable increasing the risk of financial loss.

The bond allocation should continue to focus on short term maturities and any rallies in the bond market should be used as an opportunity to shorten term. Investors should not have any exposure to long bonds with terms of 10 years or longer. The current allocation should be 50% 3 years or less, 40% 4-7 years and 10% 7 to 10 years. Over the next few months all bond holdings should be down to 5 years or less.

Growth in Asia continues to lead the world and will remain strong well into next year; the equity allocation reflects the view that investment opportunities are being created by this sustained economic expansion in Asia and the Asian equities other than directly in China will offer better than average gains over the longer term. The other main theme continues to be companies supplying the raw materials required to feed this economic expansion which will offer excellent investment opportunities, therefore focus on the commodity producers in North and South America.