Investment Q&A

Q: Nazim asked a question today that has been on my mind, "why hold stocks?" To follow up on your answer in which you opined that much of the downside may already have factored into prices, how can that be? The market is only down to levels it was at in the fall/summer. I am a long term investor but I moved to cash last week because of the risks. In weighing the potential downside risks (which could be huge) vs short term upside, why stay in the market? I just don't see how the effects of this virus will not be a lot worse than what has already been accounted for in the market. People are not going out, travelling, etc. and this must have a huge effect on the market going forward. Is this not a recipe for a recession? In which case, why not get out of the kitchen?

Q: Governor B.O.C said things will/can become much worst due to virus if I understand correct market will not do better in immediate future if so why hold stocks?

Q: Hi,
I read an article on how a hedge fund made money during the coronavirus sell off. (https://www.wsj.com/articles/how-to-hedge-a-coronavirus-11583321400). Can you give a small primer on how this is done..or typical hedging strategies. Thanks. Shyam

Q: Gey Guys,

I basically follow your balance portfolio and the stocks that I hold are between 2% to 6 %. Does it make sense in these unsure days to lower everything down to 3% and hold more cash?
Thanks
Jim

Q: Hi,
In this down market and in your professional experience, how do you recommend legging into the market? Lets say you have $100k in cash to invest, would you invest that in equal % parts over the next X months? If you think mild to severe recessions last between 9 months-2 years, best to leg in in equal % parts over that time? Or what do you think about investing more as the markets drop more? So lets say market drops 10%, invest 10%, market drops down another 10%, invest 20%? Thoughts? Investment horizon is 10 yrs+.

Thanks!

Q: I recall that during the crash of 2008 some pundits recommended that a good entry point was when the price of a blue-chip stock fell to where it yielded a 4% dividend. I’m assuming this meant that the yield was better than potential interest that could be earned on bond prices during a flight to “safety”. If I’m somewhere near accurate with this statement and given the low interest rate environment we are in, what, in your opinion should today’s investor be looking for in terms of a yield target for dividend-paying Blue-chips, assuming the market is going to continue to decline? Thanks

Q: I have never asked a single private question and how come some of the answers I received are designated as "private question" (like the one I just asked about AD today) and never appeared on the "Questions" tab.

Can you check and see if there is some problem with my link or the program. Thanks.

Q: I'm looking for ways to hedge exposure to the perpetual preferred market?
I own a large portfolio of Canadian bank, insurance and utility perpetual prefs. All of which I have profits on. This weeks carnage bled into the pref market. I don't try selling because the spread between the bid and the ask is too wide. Not to mention triggering capitoI gains tax.
I was able to place shorts on CPD, ZPR and HPR the day they went ex dividend and that has worked somewhat but to little to late. I don't like using shorts simply because short gains are considered income to the CRA. Plus the duration of the short trade is small as to not payout someone elses dividend!!
There must be a better way to solve this issue? I'm unable to find an ETF that is the polar opposite of CPD. I'm open to all suggestions....options, inverse ETF suggestions, TLT maybe??
Help...

Q: Hi 5i team,
Found this SP500 chart interesting to share "the reasons for selling " but the nice thing with the chart " You see why you don't have to sell"
Regards,
https://mobile.twitter.com/michaelbatnick/status/1233418188207067138

Q: With these drops in the market, we should be in for some pretty decent buying opportunities in the future !!

Q: If I want to buy ZTL, I have this message: "purchase this security online, a limit price must be entered. If you wish to submit this buy order at Market, please contact a representative ": I don't get why you can't buy at the market price ...Thanks. Martin.

Q: Dear 5i,

Many stocks such as Google have a high purchase price per share such that one needs quite a lot of money up front to purchase a board lot of 100 shares. Are there any disadvantages for individual investors who wish to buy and sell odd board lots like 1 to 10 shares?

thanks for your opinion

Q: Can you explain why gold has dropped sharply today? My expectation is that through times of uncertainty, gold should usually go up?

Q: I'm curious about what happened to REITs and utilities on Friday. They got absolutely hammered. Some of the utilities, in particular, like Boralex and Capital Power were down 6%-8%. Both sectors plunged like anvils. They performed worse than most tech stocks, yet the fears over the virus should not be able to impact their revenue and profit at all. Do you have any ideas here?

Q: My brother did a Ph.D in the area of virus research, at M.I.T. He has zero interest in stocks. He was able to tell us 1 thing regarding this event, it's that Europe, Canada and the U.S.A are currently in what he calls Phase I of the virus breakout (out of 3 phases) and that statistically, the death cases should be much higher in about 2 weeks. This of course might not translate to the equity market, but probably means that worst looking headlines are coming. My plan is to wait 2 weeks and then, start buying on margin *IF* the market is lower than today. Here's my question. Considering that the cost of the loan is 4.95% (all-in-one mortgage from NBC), how much of a drop from today (SP500 is at 2950) would you recommend buying the U.S index? Thank you.

Q: Good morning. My question concerns the shut down of the TSX yesterday afternoon. Our CDN platform goes down yet we have some 50 odd CDN stocks trading on multiple platforms that can still be bought or sold. It seems an entire nation of investors and investment professionals are unable to do their respective jobs because our data system is antiquated. Billions of dollars in trades are held up yet stocks with dual listings can be traded. Once again I'm underwhelmed by all things Cdn. The TSX needs to upgrade it's systems. I can see some enterprising lawyers developing a class action lawsuit on behalf of investors and investing professionals who are powerless under these circumstances to do a damn thing in real ttime. Any thoughts or suggestions? David

Q: I tend to decide if a stock is "fairly" priced based on its historical average dividend yield.

1. what do you think of this approach.
2. Do you have a different way of looking at "fair" price for buying into a position ? in this case MFC.

THANKS

Ernie

Q: How good of an indicator do you consider 5 year roe? Is free cash flow better?

Q: Good Evening
In one of your answers today about Magna you indicated that the corona virus will affect negatively "everything". Yet, today we saw that some stocks like Northview REIT and Fortis were not affected. Can you please elaborate which sectors will not be affected by the corona virus?
Thanks

Q: Coronavirus.
Will 5i be doing a report on the implications of the virus and your suggestions for adjustments to our investments.
There would seem to be implications for global growth.