Investment Q&A

Q: In the “new Trump reality” and associated statements and his expressed policies goals for the American economy directions for the near and long term would you advise/recommend your specific portfolios content/weighting adjustments in regards to geography , type of investments , cash % and any other potentially important issues ? Or should they stay as designed before the Trump second presidency term ? Certainly Trump election has generated a lot of noise in the media including business media . Thank you for your opinion and input in this obviously concerning and confusing times .

Q: I am 45% Canadian and 45% US, 10% international, what do you suggest this year? I would love to reduce the US but is there alternatives ?

Q: In a normal world I would keep both of these for diversification purposes. But this isn't a normal world. It's a Trump world and Feb.1 is an ominous date to me . I have a 3% position in HDIV and a 3.5% position in HYLD.U . I am re-balancing for Trumpification purposes generally { individual Trump vulnerable Canadian stocks are being sold and cash is being raised . Likely somewhere around 20%-25% cash when I am done } } and will likely increase HYLD.U to around 9-10% when finished . Would you endorse selling my HDIV and using the funds to increase HYLD.U ? Selling one to buy the other will bring my HYLD.U to somewhere around 6.5 % before I decide whether or not to go as high as 10% . The decision on the increase from 6.5% to 10% will be made after I see just exactly what he has planned ..... The question really is whether you would endorse a move away from Canada in the short term with these two ETF's ? At least until the smoke clears ? Thanks for your terrific service ......Garth ......

Q: Dear 5i Team!

I am sure like many millions you have been watching Presidet Trump's inagural address. Especially given the fact that the US market is closed toay because of MLK day!
Any takeaways from investment/trading points of view?

Canadian market is open and I see Oil has barely moved. (post Trump speech) Gold is down but to an alrming extent. CAD is slightly up! I am not sure if this is because the US markets are closed or because of "moderate" tone in Trump's speech. I didn't hear China or Iran ONCE! Neither did he bring his desire for the 51st state!

Anyway feel free to share your musings.

Q: How significant is foreign buying/selling of Canadian stocks, in terms of the effect it has on share prices? I can't help but think that the current Canadian political situation, and weak dollar, is causing a lot of foreign money to stay away. I'm wondering if a more stable and business-friendly government, if/when the PC's get elected, would cause a significant influx of foreign investment into Canadian stocks. Do you think such a scenario would improve the performance of Canadian stocks?

Q: As irrational as it seems,Trump may impose tariffs soon after his inauguration just to appease his voting base.A likely “knee jerk “reaction would send these stocks lower.Do you think this would create a buying opportunity?Are there others in your portfolios that could be affected? Some of this uncertainty must be already be priced in,but CLS seems immune to this.

Q: Is there a safe place to hide in Canada with the incoming US tariffs? What is your take and what would be your strategy to protect capital?

Q: Hello 5i,

Can you explain where money flows too during risk-off periods such as 2007-2009 and 2022. With the risk of no declines in the Fed rate this year what would the 2025 scenario look like for equities? Other than shorts, are there sectors that can flourish in a 2007-2009 and 2022 scenario?

At which point is it favourable to look at short-term and 5-10 year Treasuries?

Thank you for your service.

D&J

Q: I do not recall the rationale for the change in RRSP rules to lift the requirement that RRSPs had to have a certain percentage in Canadian equities. Canadian companies have a hard time raising equity, and this rule change must have caused a lot of money to leave the Canadian stock market for the US. I would support a reinstatement of the rule for any new money. If Trump wants to hit Canada with tariffs there is no reason why Canada should encourage investment in the US.

Q: How should I protect my portfolio before Trump introduces tariffs of up to 25%. Which companies would be most affected and might be sold before this happens?

Q: Hi 5i,

Basic clarification - when you allude to allocation percentages in a portfolio - do you 5i - speak to the allocation % in an OVERALL Portfolio? Example (All non reg and registered investment accounts) or within a specific portfolio (i.e. RRSP etc.)?

Thank you!

Q: Hi Peter and 5i Team,

Recently, Noah Solomon has had several articles in the Financial Post in which he describes the inherent dangers of the S&P 500 due to its high valuation, warning signals from the CAPE ratio, etc. (I’m using VFV as a typical ETF).

What is your assessment of his views? What strategies might a retail investor employ if there’s validity to his thesis?

Thanks as always for your insight.

Q: In general, how should Canadian investors consider adjusting portfolios in light of the tariff threat? Should they be reducing exposure to Canadian equities on a relative basis? What fixed income /cash alternatives should be considered?

Q: Could you please tell me what the average P/E is for the 11 sectors of the TSX?

Thanks in advance, Carl

Q: I read Frederick Vetesse’s article in the Globe and Mail today (Jan. 8) about the currently high P/E ratio indicating a potential stock market crash, and would be interested in your comments on it. I’ve included the link here:
https://www.theglobeandmail.com/investing/personal-finance/retirement/article-why-a-stock-market-crash-may-be-imminent/
Thanks so much for your sage advice over the years, and wishing you and your team a Happy New Year!

Q: Good Afternoon
Today a well known analyst predicted, in the Globe and Mail, that we could get a correction on the TSX worst than the one in 2018 when the index fell 11.64 % if Trump implements his 25% tariff.
Further, if the tariffs stay longer, a TSX loss of 35%, as we saw in 2008, is possible.
What is your reaction to these comments and what is your prediction for the TSX in 2025 ?

Q: Curious if you read Howard Marks latest "Memo" published yesterday https://www.oaktreecapital.com/insights/memo/on-bubble-watch ? He addressed issues of bubble characteristics, market concentration, market valuation and forward expectations relative to current market valuations. What is your impression of his Memo?

Thanks.

Q: For the past while I've been hearing about an opportunity in small caps and how they are undervalued versus large caps. Typically I consider diversification between fixed income vs equity, and then diversifying by geography and then by sector. However, I'm curious on your thoughts on the proportion of an equity portfolio that is invested in small cap vs large caps?

Of course, understanding that you can't provide personal advice and it highly depends on an individuals timeframe and risk tolerance.

Q: If you were setting up your investment portfolio for 2025, what would you want as your optimal concentrations per sector?
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All the best in 2025!

Q: Many are feeling the market is high. Certainly, we can't expect another year of 20% growth.

I'm interested in a strategy of maintaining those gains. Does that mean pulling money out of stocks that seem overgrown, or does it mean investing new money into areas that have not been part of the recent rise.

What sectors do you think these are? I nominate well-known companies (especially tech and giants like Costco) as overgrown even if they are good companies, and energy and small cap as part of the second group.

How does this compare with your thinking?