Aggressive Strategy October 26, 2007:

The commodity sector has remained the dominate market force over the past few weeks. The price of almost all the major commodities continues to move higher gold reached a 28 year high this week getting back up to $784.35 an ounce, oil moved to new all time highs of $92.00 a barrel, I mean it is really starting to get serious, there now appears to be a shortage of hops developing which could force the price of beer up substantially.

The commodity producers have the most favorable fundamentals regarding supply and demand. The economic growth in Asia remains strong China just announced third quarter GDP growth of 11.3% down just marginally from the 11.7% recorded in the second quarter. The infrastructure build out is driving basic material demand and that has not slowed over the past couple of years even as prices have increased substantially.

The surging world prices are quoted in US dollars which will be less attractive for Canadian based producers but are still substantially higher than they were a year ago leading to an increased bottom line. Investors should be looking at adding gold stocks to their portfolio as it appears there is a very strong uptrend in place in this sector. The Gold ETF (XGD) that trades on the TSX is an attractive way to take a broad based position in this sector.

It would be wise to avoid the energy sector in Canada until the full impact of the recently announced royalty increases can be fully understood. I believe there will be a negative reaction by investors once the price of crude oil stops surging higher. It will be rewarding to wait for the coming selloff in this sector.