Investment Q&A

Q: Hi folks: How will gold and silver react if (when) the bond market crashes?

Q: I hold some XHY in my margin and TFSA. The Canadian dollar has come down since I purchased about 2 months ago. The prediction is for a lower dollar. How risky is this downward slide , should I sell now? I just bought for the increased yield.Thank you,Phyl

Q: Is FTS at any risk as far as being coal-dependant ?
Thanks for your help.
Sam

Q: Hello Peter & 5i team,
So far so good in 2015, even though it was a tough year ; the equities (all canadian) I own have generated a 12.6% total return to Nov 20.
But these equities represent 82% of my RRIF portfolio ; this means that I’m sitting on 18% cash which I hesitate to redeploy.
You say that the US economy is pretty strong ; well, I’m not so sure about that. It is rather the best among a lousy bunch; in other words, in the kingdom of the blind, the one-eyed is king.
The S&P 500 rally is of low quality in terms of lack of breadth ; in 2015, its top 10 performing components represent over 100% of the total whereas that ratio was less than 20% in 2014 and slightly more that 10% in 2013. That’s a bad turn of situation.
The relative performance of the Russell 2000 vs the S&P 500 is in decline due to lack of liquidity in the small cap sector (which is the engine of growth). That’s no good either.
The Retail sector (consumer discretionary), which is a very important sector in the US economy, is dominated by only 3 names : Amazon, Netflix and Expedia. That’s hardly reassuring.
The US$ keeps gaining ground ; that causes enormous pressure on Emerging Markets debt and constitutes a substantial headwind on US multinationals profitability.
To top it all, the 2-year US yield is going up contributing to a flattening of the yield curve ; if (and its a big if) this situation perseveres for a few more months, we could face an economic downturn.
This is my rationale as to why I hesitate to redeploy my cash and look forward to your counter arguments,
Thanks as always,
Antoine

Q: Seems like the European market may finally be showing some signs of life with stimulus on the way. Can you recommend an ETF preferably on the TSX to play the European recovery? Or do you feel that market is not a good bet right now?

Thanks

Q: At what point would you consider this a "buy" in anticipation of the company benefitting from the recovery in US housing ?

Q: Hi guys, I have done very well with the consumer discretionary sector both in Canada & the U.S.A. My problem is that it has grown to 25% of my portfolio (each name is between 3 to 4%). What is your forcast for the sector in 2016 and should I trim now or wait until they reach 6 to 7%. Should you recommend trimming, what sector looks interesting to you to this time.

Thanks,

Jim

Q: I'm confused by the latest market turmoil over impending fed rate hikes. I have a list of almost 200 ETFs, and virtually none have done well in the last five days - except utilities and dividends, whose stocks ought to be falling if the market is that concerned about rate hikes. Meanwhile, all the banks, including US regionals, and all the insurance companies, are also down. They ought to benefit from rate hikes. Or do I have it all wrong?

Q: Curious on your take of the current market? Although it has been tough over the last year, it does seem like the market is "working", where companies with good execution are rewarded and those with poor execution are punished. Your thoughts?

Q: Terrorists attack on Paris is truly tragic. Sadly this may lead to market correction. In today's Globe and Mail (net edition) there is an article by Reuters' Journalists about the possible short term correction and a "short squeeze" taking place in the near term. They don't expect any long term consequences.
What is your opinion and suggestions regarding portfolio management? Buy on this dip or just leave things be and monitor the situation?

Q: Any thoughts on this fixed income fund? There is also a US version and an Investment Version.
Thanks!

Q: I seem to be noticing a trend over the last few earning seasons (particularly this last quarter and in Canada). If a company’s earnings (and general outlook) surprise to the upside, the stock price may move up a bit but usually not by much. If earnings are in-line with consensus estimates, the stock price might just hold steady but more often drops anyway. If there is a small earnings miss the stock gets severely punished, and on a large miss the reaction is often brutal (i.e down 30%-50% in the following days ex. Amaya). The daily moves that some supposedly steady large cap names can encounter these days on a single piece of news is getting more and more exaggerated. It almost makes me believe that selling an entire portfolio before earnings season and buying back immediately after could make a lot of sense. The downside risk seems to be so much more amplified versus the upside potential when quarterly numbers are released. I would obviously never expect you to endorse such a timing strategy, so my question is simply: 1)Am I imagining this or have you noticed this trend? 2) If this is in fact the case, what are your thoughts on the reasons why and when /what might stop it? Is it just a function of current investor sentiment?

Q: I'm looking to park some cash for 3-6 months. I'm familiar with CLF CBO and XSB and I expect products from other companies will be similar but what are Floating Rate instruments such as notes? What are they and how do they compare is safety to the 1-5 year laddered ETF's? Thanks again Henry

Q: I have heard a number of analysts recommend Europe as a place to invest. Can you recommend some European ETFs and do you think the European market looks interesting?

Q: I would like to add some global exposure to my trading account portfolio. I have short listed 3 ETFs, with XFH and ZEA excluding North America and VXC containing a significant exposure to the US market. I already have exposure to US securities but I would appreciate your perspective on which option may perform best.

Also, would you recommend a hedged or unhedged vehicle at this point.

Recommendations on alternative approaches are also appreciated.

Thank you.

Rossana

Q: Can I have your outlook on CBO for the next year or two.

Thanks

Q: There has been a lot of talk about a housing correction in Canada. I am interested in your views of how this could impact the Canadian stock market and what would be the most vulnerable sectors and stocks? Also, would this tip us into a recession?
Thank you

Q: What will be the impact on WEF with the expiration of the softwood lumber agreement? Thanks
Derek

Q: Could I please have your opinion on what to expect from this ETF over next six months to two years?
Thanks again
Larry

Q: Hi I am taking a position in a S&P 500 ETF through a domestic product. Would you buy a currency hedged ETF or just buy the ETF with no hedge. I guess this is a question about our currency over the next couple years and you outlook on it. Thanks for all the great reading.