Investment Q&A

Q: Hi Team,
Is the party over in the markets this year? Should we be cashing out for conservative dividend payers at this point? Funny ; just when I hear more and more talk of people buying small cap agressive names the market seems to have “peaked” and now rolling over. It’s hard to believe the economy is so “hot” in the US when I hear so much about people being hundreds of dollars away from paying their bills , and with mortgages renewing people that were on the verge will be slammed. Tech companies have laid off thousands over the last year. Some I talk to believe the numbers that the government put out are “false” and politically driven to make the current president look good: especially heading on election year. Sometimes a person really has to wonder if there’s a crisis in the making with the high inflation , interest rates etc. Not that I am a conspiracy theorist but over the years it certainly looks like books can be cooked, so to speak. Just looking for your take . Thanks

Q: Everyone, what are the three biggest risks to the market this year? Clayton.

Q: Hello - for my RIF- I have done well with VOO over the last year or so and am wondering if this is a good time to move to a different ETF such as RSP or IWP. My thinking is if the US economy does avoid a recession and the rally broadens, then maybe there will be more growth somewhere other than VOO. Your comments and suggestions please.
Thanks, al

Q: In your response to Peter this morning you stated that you "think investors can always hedge against the depreciation of US dollars" and you go on to give some examples of how that can be done. Would you consider owning hedged ETFs and CDRs to be another option to hedge against the depreciation of the US dollar? Thank you.

Q: My Question is about which direction stock market would move while looking at current yields of 10YR bonds at 4.4% and S&P at PE 28 [top end of average] offering a yield close to 3.8%, with a differential 0.6 there is not much incentive for investors to accept risk in the market.

Do you think bond yeilds would move lower and hence increase in differential and favouring stocks or a move other way around.

Q: The US deficit and debt are back in the popular media. To what degree do you see this issue influencing markets and do you have any comments on investor strategy? Any guesses on how the US will reconcile this issue and when?

Q: For at least10 years I had been invested in a diversified portfolio that included the eleven sectors, bond ETF's gold, preferred shares and cash only to see the bond ETF's and preferred shares continually tumbling down year after year. Gold went nowhere with no dividend, nada.Tiring of this I got rid of the bond ETF's, the preferred shares, and gold having lost thousands but I didn't care! At least I no longer had to look at this disaster taking place as they melted down to almost nothing. What was left I invested in the good companies and never looked back. As my five year GIC ladder came due, each year I gained a paltry $1,500 or so on $10,000. So no more ladder. All through the pandemic the dividends now kept on coming, stocks are increasing and I was up a minimum of $140,000. So now I have cash, all eleven sectors with fixed income from ETF's like UMAX and others plus my pension. So cash 13%, Equity 50% and fixed 35% no bonds, no gold, no preferred shares and 2 years left on my GIC ladder and Europe ETF. I know 5i loves to include bonds etc as a "balancing diversifier" to a portfolio but for me this did not work out. Maybe in the next ten years or more they may break even but I do no want to wait that long. So far this works for me. I invite any comments that you may have.

Q: If you were expecting a bit of a market swoon and don't want to sit on cash what would you consider to be "defensive stocks" or "stocks that benefit" in downturns? I've tried options in the past with mixed (mostly not so good) results so that's not something I would like to do.

Thanks in advance-Dave

Q: I read a piece In the G&M by Rosie on the weekend re: nuclear energy as a potential outperformer. It mentioned the above firms as potential investments. I did a little homework and of the Cdn firms, the only 1's I thought worth investing in were the ETF and ATRL. I was unfamiliar with the U.S. firms . Can you shed some light on them please? I do have positions in Hammond Power, SMCI & Vertiv, which I'm pleased with and am thinking of adding to. Thanks for any light you can shed on this for me to enhance an informed decision.

Q: Hello 5I Team
The market is at all time highs today with current interest rates .When the interest rates start to get cut in Canada and the US what does history tells us , should the market continue to go higher or decline? Does 5I share the same view this time around?
Thank you for your valuable insight.

Q: Recently, I’ve noticed that Canadian inflation has been more subdued compared to the United States. Given this observation, I’m wondering if it’s reasonable to interpret that Canada might reduce interest rates sooner than the U.S. If this holds true, and considering my intention to purchase more U.S. stocks, would it be advisable for me to start acquiring more U.S. dollars at this time?

Your insights would be greatly appreciated. Thank you in advance for your guidance.

Q: On March 19, Ron asked about some sectors that 5i thought would do well over the next few years. One of those sectors that caught me by surprise was Communications. Are these telcos? Or is this more of stocks like GOOG?

Q: What are the 5 best industries to buy stock in now pls?

Q: I currently have equal weights in ZAG and VFV (about 6% each) and a fair chunk of "cash" for stability. Rate drops seem to be stalled, so ZAG is going nowhere fast. OTOH VFV is flying high and might have temporarily peaked. I don't want to lose out on the eventual bond bounce, but I wonder if I should dump ZAG to get the potential VFV upside. I realize this might be crystal ball territory.

Q: Macro Markets Models
What is the estimated time frame for the Macro markets values turn to negative or positive from historical perspective?
Miroslaw

Q: Hi 5i
April 23, 2021 I asked the question...
...What would be your allocation % to the 11 sectors?
Your answer was...
....As a GENERAL guideline, considering current market factors and outlook, and leaning towards some growth: real estate 5%; financials 10%; industrials 15%; cons. disc. 15%; cons.staples 5%; utilities 5%; energy 5%; communications 5%; materials 10%; info/tech 20%; health 5%....

Would you revise this % allocation to the 11 sectors today?
Thanks

Q: Can you give me your best 2 picks for each of the 10 sectors ? Please and Thank you Larry

Q: There seems to be a lot of commentary in the market about a potential pullback given the current run the US and CDN markets are having, while reaching close to all time highs.

Maybe the noise has me spooked but I do find it tough to deploy cash to stocks in the current environment, particularly in the AI and Tech space, given that some stocks are seeing growth of 200% to 400% in one year.

Its a long winded introduction to my question, what is your current view on the market, do you feel that a pullback is possible in the next few months, would you be cautious right now?

I understand that no one can predict the market at any given time but I would greatly appreciate your view.

Thanks
Tim

Q: Hi, I'm thinking of gradually reducing my individual stocks and moving into etfs for an all around set it and forget it roughly $3 million portfolio for someone retiring in the next few months. Can you give me your suggested etfs and percentages to hold to accomplish this balance? A chunk of these funds are not invested yet so I'd also like to know how you would suggest deploying these funds? Would you edge in gradually over a period of time or just get the money working? I'd really appreciate any advice you could give me in this format.
Thank you as always!

Q: I have a crystal ball question regarding the potential market reaction to One or both US Presidential candidates not being available to govern due to health or "alleged" illegal indiscretions. Is there a precedent of such an occurrence historically?

Thank you