Investment Q&A

Q: This may be a challenge to the usual 5i analysis.

According to reports the so-called “ Mar-a Lago Accord” seeks to have the Treasury only issue zero interest rate 100 year bonds, and they would force allies and trading partners to buy those bonds. The intention is to reduce interest rates and thereby help the fiscal deficit and reduce the value of the dollar ( the joke of course is that Trump also wants a strong dollar and threatens countries that try to settle in anything but the US$).

I have to roll my eyes at this nonsense. Cash is a zero interest perpetual bond. Basically they want bond owners to hold cash. If they want that ,they should simply stop issuing Treasury bonds. Of course if they did that they would rip the clothes off the emperor.

In the context of MAGA thinking this is an attack on Fed Independence, however it is also inflationary in the way Q.E. was inflationary (asset inflation).

I have to give the Republicans credit for coming up with yet another novel way to enrich those of us living off our capital.

As subscribers to 5i Research we will need advice on how best to take advantage of this new investing ecosystem? Over to you 5i!

Q: Based on the current market situation, what level of cash would be apropriate to have ?, and if wait and see it is the best approach now , what is the best parking place for cash ?

Q: I have decided to orientate my portfolio more towards the US, while keeping approximately 30% Canadian. I am also looking at India for my first international investment. Most of these stocks are asset light and large cap.
In the US the sectors are non bank financials, tech, and industrials. In Canada I have chosen large caps with significant non Canada revenue.
My dividend income would decrease but I can handle that. This would be an equal weight portfolio.

What do you think of this approach and of the individual stocks?
Should I just buy an SPY 500 etf for the US ?
Is FFH appropriate for India or is there an ETF you would recommend ?
Thanks .Derek

Q: Another Covid type in China, Bird Flue in Chickens ,Cattle, Humans ,Measles spreading Egg Prices Tariff's Inflationary No More Fed cuts this year

Anything else. A correction is here. Wait for a buying opportunity

RAK

Q: Is there some place in the Web where I can see all the individual transactions for a stock for the day?

TMxmoney will give me the last 50 or so, but not the history for the whole day.

Thanks
Mark

Q: It seems that every day the new from south of the border gets crazier. Today (Friday) the markets reacted very negatively. Let's assume the news continues to get crazier. What do you think the markets will do. Is most of the insanity already priced in? Just how bad do you think it can get?

Q: Hi Team,
Admittedly, my portfolio is on the growthy, aggressive side of things being tech heavy with some smaller cap names. It now seems like daily I wake up to another name in the headlines dropping 10,20,30% with the slide on a few names continuing . Is this a sign the market is about to topple over cause this is what it’s feeling like. Or is the positive view 5i held for the year still in place? U assume as usual the move is to hold steady and ride the wave?
Thanks ,
Shane

Q: Let us assume there is market downturn of 20% or greater. I am a retired senior and want to be cautious. I have TBills in US and Can.;
Also some BN, DSG , AEM and bonds like ZMMK. Also 10% in ZSP and VFV , XIU.
Any red flags here and suggest some additions. TAKE AS MANY CREDITS as needed to answer this. Thanks. Helen

Q: In a recent response, you mentioned that under the Trump administration the industrial sector is likely to suffer. Can you please explain why. Thank you!

Q: Hi, I'm seeing what appears to be rather large moves in these two stocks, so am wondering what I'm missing. Or are these sorts of daily movements going to be the "new normal" going forward? I'd like to hear your thoughts - thanks and keep up the great work!

Q: For now, investors seem to have decided to fade the chaos of Trumpenomics. However, one has to wonder how long the massive contradictions will be ignored.
Scott Bessent (Treasury), the man who wrote the report that identified the contradictions in the UK economy that made George Soros $billions, certainly must see the dangers, and yet, he is the source of one of the major contradictions, when he says the Fed shouldn’t lower rates while Trump demands the opposite.

Is Fed independence under attack and how will investors read this?

Are tariffs, as claimed, for revenue or to reduce imports? They can’t be both.
But if the tax cuts are to be permanent, $3 trillion in revenue has to be found somewhere.

Will Trump let a gnat like the Parliamentarian, or the Chairman of the Federal Reserve, stand in his way?

If, at some point, investors focus on the issues around tariffs-as-revenue, or threats to Fed independence they may begin to worry, and decide to sell equities.

The cost to hedge against such an event would be prohibitively expense given one wouldn’t know whether or when it would occur.

I’m sure 5i is considering these issues, but here is what I am pondering. How does an investor with a large equity portfolio manage this kind of risk? Would growth stocks be hardest hit? Are etfs better than individual stocks? What defensive stocks are likely least affected? Are there equities that would do well in such a scenario? How would bonds perform?

Q: In the context of the sector allocations question asked by Jerry today, you gave the Utilities sector a weight of 20%. Is this really what you meant? It seems pretty high to me. Besides, when we add all the sectors, the sum is 110%. Thank you

Q: Hi Peter and Team,

I’m a very pleased user of Portfolio Analytics, as well as 5i of course.

Till now, I never changed my allocations using “Custom Allocations”. Previously, I used one of the suggested allocations.

In this era of tariffs, I fear they will throw a monkey wrench into our economy as well as in the US. For example, even though tariffs on steel and aluminum aren’t yet in place, some Canadian firms have already lost orders. “The threat of tariffs is, in itself, a tariff”.

As an example, you recently responded to a member’s question and suggested that the Industrial sector could/would be vulnerable to tariffs.

Please suggest “Trump-proof” sector weightings that takes into account the uncertainty that is rampant with Trump 2.0.

Thanks as always for you assistance in helping us to make informed decisions.

Q: With the uncertainty ahead is it time to reduce the industrial holdings first , and then financials if the tariffs kick in?

Q: With Tariffs coming in USA Inflation will be headed higher. No hope for J Powell to reduce rates. This is not good for stock Market that wants lower rates. Your Thoughts ? RAK

Q: Any suggestions on how to "Trump-proof" one's portfolio?

Q: Dear 5i Team:

I always enjoy your 5 from 5i section. Usually contain at least one if not more thought provoking articles and help me to understand the BIG picture better.

First a non-question! Who in the team "curates" these articles?! Thee is some consistency here.

From Ritzhold's article: Based on their take on opportunities, what are the stocks/sectors you would suggest? Financials? Stocks that will benefit from inflation!! Energy. I couldn't "decode" this article into actionable ideas.

Q: Hi Peter and Team,

I notice that you often state that stocks did well under Trump's first term.

With all due respect, Trump 2.0 is, in my own view and the view of many others, Trump 2.0 is a different 'kettle of fish' than Trump 1.0. One needs only to look at both Canadian and US media to see the complete chaos that Trump is causing on both sides of the border.

Thanks.

Q: Hi,
I read with great interest Lisa and Peter’s questions and your answers on Feb. 10 about Trump, US holdings and economic warfare.
Given Trump is now making noises about how some US debt could be fraudulent, and the US may not owe as much as the Treasury reports, I see new risks.
For instance, as part of his economic warfare against Canada, could he by the stroke of a pen declare Canadian held US debt is fraudulent to put pressure on Canada to become the 51st state? Further, could he freeze Canadian held assets in the US (securities, real estate, business assets, etc.) to further pressure Canada?
Along Lisa’s line of thought, does it indeed make sense to sell some US assets and re-buy in Canada?
Final question: if I hold US cash in a US dollar account in a Canadian domiciled bank, is it safe from Trump’s potential ravages?
(Please take multiple credits.)
Thank you, Michael

Q: I am a 78 year old investor and have been in the stock market for about 50years. As you are aware, that will be many ups and downs. I have yet to witness the recent turmoil caused by Trump which an analyst referred to 'a staggering level' of chaos.
There have been a 'staggering' series of bluster about tariffs affecting the lives of North Americans. I think I have an idea to soothe your younger investors. Who comes to mind when you read the lyrics to a song from the musical/movie 'Chicago' sung so well by Richard Gere?

"Give'em the old dazzle dazzle
Razzle Dazzle 'em

Give'em the old hocus pocus

Give'em the old film flam flummox

Give'em the old three ring circus
Stun and stagger'em
When you're in trouble go in to your dance

Long as you keep'em off balance
How can they spot you've got no talent
And they'll make you a star!

How can they hear the truth above the roar?"

I just finished reading the 5i recommended book "The Psychology of Money" by Morgan House. Timeless lessons on wealth. greed and happiness. It was while reading the section on greed I thought of Trump and Musk and Razzle Dazzle'em.