Investment Q&A

Q: Merry Christmas and a very Happy New Year to all at 5i!!!
Thanks to all for another amazing year of guidance from 5i!!! Everyone should be very proud of the job they do for the members!!!
This question is not time sensitive, so do not rush to answer at all.
Sometime in the New Year is just fine.
Question:
In the article "Inflation is Not Going Back" by Barry Ritzholz the information pertains very specifically to the u.s. The Canadian economy may be linked to, but is not the same as, the american. Therefore, what specifically Canadian interpretations or conclusions might one draw from that data, or equivalent Canadian data? Or, do we accept those conclusions as being equally applicable to Canada?
Just curious.....
Best Wishes to all at 5i Research!!
Cheers,
Mike

Q: You have mentioned Japan increase in interest rates (just announced this morning at 25 bps) and carry over trade as one of certain key risks for 2026. Is purchasing VIU the wrong investment decision with such risk on the immediate horizon? VIU has Japan as top geographic holding at 24%.

Q: Reported U.S. core inflation is 2.7% for November and the trend appears to be downward. I think you have expressed the view that tariffs are inflationary. Given these numbers, would you be revising your opinion on this matter?

Q: I was curious about the Private real estate investments. I have seen companies like EQUITON who advertise returns of 16 -20% annual on their development offering. Do they have good track record? Is that rate of return possible? Are they too risky for retail investor?

Q: Hi, can you enlighten me regarding the Japanese carry trade situation? I am reading, but not fully understanding the effect of the Japanese government possibly raising interest rates - maybe soon. Is it possible this is a concern for traders globally if they or their large funds are heavily hedged using the Yen vs USD? I'm concerned this may be why there seems to be a rotation out of tech, even though the idea of continued AI spending seems likely into the next year. You always seem to be able to put these things into perspectve - thank you.
D

Q: I believe last April U.S markets entered a corrective phase. Do you think we are entering one now?
How often do they normally occur during a year?

Q: Hi team,
Is CLS plummeting on Avgo results? Also why the negative reaction on Avgo with the earnings beat? I am not liking this market particularly tech. Any reason to sell off growth names right now it seems to happen with very little new catalysts in sight. Is it time to diversify away from tech with the portfolio already down approx 12% from highs. Or just ride out these growth names as usual? Thx

Shane

Q: Following from Matt’s questions….

What is the forecasted revenue source for AI companies?

How do you see the service offerings between consumer and business?

Q: As I muddle my way through determining which holdings to purchase or add to and which to reduce or sell outright, I can't seem to ignore the backdrop of tariffs and an unpredictable Trump. If CUSMA goes down the toilet and duties are applied to almost all goods I can't see how there wouldn't be cataclysmic damage to our country. I am increasingly worried that as an investor I am not discounting the likelihood of this accurately. I am wondering if you could comment on this and discuss what your thoughts are. I would like to be able to better formulate my own opinion as to the risk I am taking with equities and your input would be valuable.

Q: We're approaching January, many of which have a lot of turbulence as fund managers sell winning stocks/sectors from this year to buy into what they think will be the winning stocks/sectors for 2026. Do you have any insight on what we should expect from them this time around? Canadian banking has been insanely good this year. Will they bet on that continuing or sell off to buy tech? Or will they go for gold or the long neglected healthcare or real estate sectors?

I presume there will also be a lot of retail selling of winners this year from people who put it off so the taxes would be delayed. Though I'm not sure how much retail moves the needle compared to funds.

Q: Hi, I noticed that the market model still says the last update was for Oct 2025. Is there a schedule for updates?

Thanks,
Andrew.

Q: Everyone, in the next three to six months what should we be worrying about? Clayton

Q: Hi Peter
I'm curious if you recall your days at Sprott and before, specifically late 1999 and then 2007-2008. Did you get a feeling that the markets were overvalued (or had gone up too much too fast)? Did you make any defensive moves by taking profits, going to more conservative holdings, using options to protect downside, etc?
To me it looks like the conditions are ripe for similar declines.
Thanks, Greg

Q: Everyone, in today’s environment of instant information and volume of information how far back in time should you use information for decision making (with the exception of financial data)? 3 months, 6 months? Clayton

Q: RE: 2025-03-07: Geographic - Diversification - For now, we would still favour the US, with a general suggested 50%, 30%, 20% (USA, CAN, INT). International could be 10% to 20% depending on the investor.

I'm currently converting my 25 stock portfolio to just two Balanced All-In-One ETFs: XBAL and AOM. I've determined the GEO distribution is: XBAL (45%, 25%, 29%) and AOM (62%, 3%, 34%). A mix of XBAL and AOM will leave my portfolio with ~ 30% International exposure -higher than 5i suggests above.

I googled this to try to figure out why these Balanced All-In-One funds have 'higher' international exposure:

"J.P. Morgan Asset Management’s Long-Term Capital Market Assumptions suggest developed international stocks may produce better annual returns than U.S. equities over the next 10 to 15 years. The expected difference is about 1.4% annually – specifically, 8.1% for EAFE stocks (Europe, Australasia, Far East) versus 6.7% for U.S. stocks."


Your comments on this difference in international exposure would be most appreciated. Thank you.

Q: Greetings 5i,

We are possibly entering a period of change in the direction of interest rates. Canada and the US could be heading in different interest rate directions. Up for debate I suppose.

Could 5i provide a quick refresher on sectors and possibly companies that do well with rising interest rates and those that do poorly. A broad explanation would be appreciated as well as your thoughts on the direction of rates today.

Cheers!

Q: What do you think about the recent insider tech sell off by Peter Thiel, Jeff Bezos and Mark Zuckerberg, and others? Is this a signal of an incoming tech and general market crash?

Q: Can you elaborate a bit on your philosophy “Letting Winners ride”? Very difficult to do so when consistently managing position sizing. I own companies you have serious conviction in (BN, CSU, CLS, GOOG) that are becoming larger allocations in my portfolio. They feel like “Winners”, so why trim?

Can you provide an example or two that you personally have let winners run? And maybe a reason why you chose not to trim?

Thank you

Q: Hi 5i team,

With the Fed now ending quantitative tightening (QT) and possibly cutting rates, I'm wondering what the combination means for the market from your perspective.

1. How do you think the end of QT might affect U.S. and Canadian stocks in the short term and long term? Are there certain sectors or styles (growth vs value, cyclicals vs defensives) that you’d expect to benefit more? How about Crypto?

2. Some people are saying that stopping QT is almost like getting an extra rate cut in terms of liquidity. Do you agree, or is that overstated?


Thanks,
Matt

Q: Hey 5i, I would like your suggestions on portfolio construction for a retired individual. Basically I would like your suggestions for percentage breakdown between Canada, US, and international. My plans for international is just buying VXUS and calling it a day. For Canada I’m buying ETFs XDIV and CDZ. For the US I’m going to buy the 11 sectors (including REITS) through ETFs, either Vanguards or ishares. So I would like your suggestions on percentages put to the 11 sectors in the US for a retired individual. Thanks so much and what a great service you have!