Investment Q&A

Q: PPL and others in the utility pipeline space have taken a major haircut in the last few days for no reason at all. Is the threat of a Fed rate increase really to blame? In real financial terms that is really immaterial. However, market movers have been using all threats (real or otherwise) to further their games of stirring stock movements. What is your take on this? Thanks.

Q: I am wondering what benefit it would be to the U. S. to raise rates. On one hand is their economy that "hot" that it needs to be controlled ? They seem to be a consumer driven society so a strong dollar makes imported goods cheaper for the U.S. consumer. More consumerism makes their economy hotter. Was that not the scenario some years back culminating in a housing bubble? Also raising rates makes their goods more expensive for other countries. Some large U.S. corporations have experienced a drag on earnings with the dollar at its current levels relative to other currencies. How can the U.S. be an island of a strong currency when many other countries are weakening their currencies to promote growth? These are simple views but your thoughts on the effect assuming an interest rate hike in Dec.

Q: Every year there is a number of stocks that are sold to crystallize capital losses in that year. Can you suggest 5 stocks, mid to large caps, that will be sold because of tax loss selling but could have a big potential to bounce higher after the selling has stopped.

Many thanks!

Q: Would you favour CLF or VAB for government bond exposure?

Thanks,
Jason

Q: Hey folks
With it looking more possible that a Trump win is in the future, and the predictions of how the markets are going to fall ( which we may have seen the start of today), would it be prudent to take some gains off the table now and reinvest when/if the markets drop, knowing fully that they will recover in a short time, or should a person stand pat and ride it out? I am thinking there may be some gains to be realized by playing the over reaction that is sure to come if Mr. Trump wins.

Q: Hi 5i Team,

Is FEZ a keep for the next 3 years? I have a full 5% position and down 28% since 2014 in my RRIF. What is a good ETF replacement for stable income?
Thanks

Q: Having an Income portfolio including the above companies, I'm unsure of the effects of a potential increase in US rates in say December 2016 when at the same time the Bank of Canada holds rates or even maintains dovish tone signally near term rate cut. Will holding Canadian interest rates steady offset what would otherwise be negative pressure of a US rate increase on Canadian dividend paying stocks? Thanks

Q: Now that Donald has consistently shown his character it seems obvious that Hilary will be the next President. Do you still expect the markets to be jittery?

Q: Hi,

Is now a good time to invest in a preferred share etf? It is a non-registered account that is focused on income. How safe are preferred shares in a rising rate environment?

Thanks,
Jason

Q: I am considering one of Vanguards developed Asian Pacific developed countries etf. They are vah or veh. veh is hedged. Which do you prefer for a 5 year hold? I am a conservative investor and I am some what concerned about the Canadian dollar. Which would give the better performance over the indicated time frame? Thanx.

Q: The best investment I made this year was joining your service.
I was just chasing stocks.
What sector should I be looking at first.
Could you recommend any to get started.
Thanks.

Q: SYZ, ZZZ, CZO, TNC, NFI, PBH and ITC These are all stocks that have been down considerably over the last month. They are stocks that 5i customers have or did have. Meanwhile, the TSX 60 has been flat for the last month. So I am wondering if the members are selling out on these stocks and possibly putting the money into oil which has been up for the last month or so. Should I have been getting out of some of these stocks over the last while and putting my money into oil which is one sector that is doing quite well and probably the reason the TSX is not losing ground this month. Thank you. Dennis

Q: Thanks for the blog "Who gets impacted by a carbon tax?".
While Saskatchewan and Alberta show the highest per capita impact in your analysis, isn't it energy users who will pay the bill? With the largest populations, won't a considerable part of the cost be borne by Ontario and Quebec drivers, particularly drivers of the least fuel efficient vehicles?
Also, do you happen to know how a carbon tax impacted countries that implemented it years ago? Thanks for any references you have on this. Edward

Q: I have about 10% cash right now. Normally I prefer to be fully invested because I like the steady dividends. My investing style is somewhere between your income portfolio & balanced portfolio and the portfolio is reasonable balanced. I don't need to take anything from my investments now but I will in a couple of years.

It "feels" like sitting on a bit of cash makes sense right now in the short term and maybe take advantage of tax loss season or other buying opportunities (seems like a lot of those recently).

Your thoughts?

Q: Hello Peter, I have some US cash to invest in an RRSP. Can you please suggest four US 'growthy but somewhat conservative' stocks for a long-term (10+ years) hold. There is no need for current income. Also, I know you've suggested IWO as a US growth ETF. Would you be inclined to favour that for an investment now, or do you think that, with current near-highs and the upcoming election, it makes sense to wait until closer to year-end. Thank you for the terrific service!

Q: what is your current opinion on this etf and its relative position in your portfolio ?

Q: From Oct. 3 : Q: A headline article in Globe and mail " Why it feels like another financial crisis ----" gives a current p/e for the tsx of 23.6 Your macroeconomic report has it at 17. Is this a difference between trailing and forward earnings or am I missing something?/
5i Research Answer:
There is a difference between current and forward earnings multiples. For example, based on data from Thomson Reuters, the current P/E for the TSX is 17.2x and the forward P/E shows 16.7x. Some publishings do not distinguish between forward and current when reporting P/E so one may see differences from time to time. However, the P/E quoted by the Globe looks to be high regardless of the timing perspective. Different services also seem to use different sources of estimates; we do see 23X on some other services, but simply defaulted to Thomson here.

It seems to me that the difference between 17 and 23 is a significant distinction and would indicate the TSX is in overbought territory if the latter is true. A subsequent article in ROB on Oct 4 produced a chart (source Bloomberg) showing the PE ratio for the TSX "Composite" at 23.5 and the highest in 14 years with the widest gap with the US since 2009. Is it possible 5i Research data from Thomson Reuters is utilizing the smaller sample from the TSX "60" or another index to arrive at 17X?
How to know what the true number is for sure?

Q: Hi Peter and team, If interest rates go up in US but down in Canada what is the likely impact on CPD. Also, in a broad market selloff of greater than 10% how strong is the correlation of CPD to the overall market. Thanks

Q: What do you think of taking a position for a 5 yr hold in either of these? If you would take a position, which would you choose?

Thx, Carl

Q: What are the possible ramifications of the Carbon Tax as laid out by the government? How should investors protect themselves?