Investment Q&A

Q: Hi Peter,

Over the next five to ten years, what is your expectation from a risk-return prospective for the following asset classes? Please provide your ranking with a brief explanation for your rationale.

Annualized returns for the past ten years are noted below as per BlackRock:

U.S. equities – 13%
Canadian equities – 8%
Infrastructure – 7.3%
Japan equities – 6.6%
REITs – 6.1%
European equities – 5.3%
China equities – 4.9%
High yield bonds – 3.4%
Emerging Market equities – 3.3%


Thanks George

Q: Hi,

Can you give 5 small and midcap stocks US and Canadian that fits the category "that have purely domestic revenues and don't have to worry about recessions" as mentioned in your article in National post.

Thanks.

Q: The headline from the Globe and Mail, after the stock market closed on the 13th of this month - Surprise jump in U.S. inflation sends stock markets tumbling, and this - Dow sees worst one-day selloff in more than two years as fears of another large Fed rate hike rise. For me, dipped my toe into the turbulent waters and added to existing positions, well, somewhat. Now I'm wondering  - what the rest of the week will be like. and even for the next week??? Your observations from past experience would be much appreciated....and ready me with some insights about what to expect and also ready myself about what to do next..........Much thanks........Tom

Q: Hello 5i. Can you explain some market psychology. First of all who is buying shares that are being sold in this market downturn. How can the markets get spooked one day and fall 5% and yet climb 2-3% next day. Its been known for a while that the fed will be raising rates to tame inflation and yet the market reacts as if this is a surprise. Very confusing market. What would be a few indicators that we have reached a bottom in this bear market and are back in a bull market?

Q: What is your outlook on Copper and Silver over the next 3-5 years?


Thanks,

Q: Hi Peter, Ryan, and Team,

If we can trade with zero commission, and were just starting out with a TFSA, which of the following two options would you recommend, and why?

1. The Canadian Money Saver Model ETF Portfolio
2. The ten stocks in the "Beating the TSX" as described in https://dividendstrategy.ca/btsx-portfolio/, and has also been featured in the Canadian Money Saver from time to time.

Thanks as always for your pertinent advice.

Q: In early July, I asked whether you thought it was better to lock in a mortgage rather than sticking with a floating rate.

At that time, you thought staying with a floating rate was better.

Wondering if your thinking has changed on that given how things have developed since.

Q: Hi, could I please have your view of the Canadian inflation rate over the next 5 years. Do you believe we could return to a scenario of very low inflation and zero interest rates or is inflation likely to plateau at a higher level (or much higher level) and what might that level be? Thanks.

Q: Today, do you see more future growth from owning a S&P 500 etf like VFV or from a balanced equity (BE) portfolio? I own all the BE stocks in my portfolio, and I have some new money to invest. Which 4 BE stocks would you over weight at this time ie what is your highest conviction stocks? Could you give a brief reason why? Would you wait until the US Feds raise rates coming in September? The markets dropped the last time the Fed raised the rate. Do you know the date? Or just invest right now?

Q: Hi,
Mr. Jeremy Grantham is predicting that the bursting of this current Super Bubble is almost here! Though reading his newsletter I couldn't find any specific date. His prediction is based on Fundamental analysis though some Technical Analysts have predicted the capitulation is not here yet as well. It seems that there is a convergence of these two seemingly opposing disciplines.

Any thoughts on Mr. Grantham's predictions?

Q: Dear Peter et cal:

Two part question. You may dedut as many credits as you feel fit.

1. There are a few experts who predict 60/40 portfolio is finished for several years! I was a subscriber to Portfolio Analytics for a while and it repeatedly told me that given my answers to your algorithms , I have to stick to 60/40 split.
What do you think about 60/40 portfolio in general,, especially for the many in the pre/semi fully retirement stages. No need for personal answer. Just a general overview answer would be fine.

2. If you were to construct an ETFs based portfolio TO-DAY from scratch, would it be different from the one that we see in Canadian Money Saver? What would it look like ,if it is different? 80/20? or 70/30?

As you have indicated that you can give personalized answers, please feel free to answer in general/overview/big picture terms.

Thank you in advance
Mano.

Q: Further to Daves question and response, this week a guest on BNN mentioned we are no where near seeing a turn in the market until the Fed makes the last rate decrease. This could well be next year or and 2024.
What are your thoughts and thanks
Rick

Q: I feel that 5i has the belief that if you are a long term investor you will be OK with the downturns that we are having now. Stay invested and you will OK in the long run. Yes, overall the market has always gone higher over time, but you can get caught if you bought into the highs and are now down 50 to 80%. Oil stocks have been the darling in the last year, but if you bought the same ones 10 to 12 years ago, some are still off 50 to 80% from there highs, so this really makes you a long time investor. I feel that are many growth stocks that were bought when you thought the market would always go up will now be looking at decades to recapture there cost. Sometimes a better market does not even help some of these stocks recover.
Thanks again

Q: Hi, This week's sharp decline in Pipeline ( ENB/TRP and Others) and Utility (FTS etc ) stocks - Do you think, it is a result of market's renewed fear of continued rate hikes into 2022/2023, as suggested by FED Chair on Friday and re-iterated by other FED Presidents over course of this week including Cleveland FED President, Mester, Today. Pipelines and Utilies sector has performed well this year, but may be, due to its higher yield, is causing some worry to investors. Your comments, co relation of high rates and other factors, impacting these sectors will be much appreciated. Would it be prudent to underweight the sectors, in near term. Thank You

Q: for the whole year when you get a question on a stock, you have been saying the same thing-we like the company but we need a better market backdrop,we think its worth holding.
but the reality is the market backdrop is not getting better-its getting worse, actually far worse and it could continue well into 2023 and 2024-and a recession is obvious if not already happening.
personally i have liquidated everything except some oil and gas stocks and some long dated options,. i also think your comments and bi weekly updates are way to positive.
remember jerome powell has gone of the rails and has numerous flip flops and macklem is not much better-can you comment.dave

Q: The TSX solidly outperformed the SPX from early 1999 to early 2009 and the SPX solidly outperformed the TSX from then until early 2020 and we’ve been chopping around since.

Is it time for the TSX to outperform the SPX again, for at least a few years? Is this essentially a question of how strong will tech be going forward?

I noticed that during the TSX outperformance from 1999 to 2009 oil went from $11 to $140. So maybe it’s also a question of where oil is going.

Q: Now that Powell has come out with a higher-for-longer interest rate plan at Jackson Hole, any thoughts on when high growth tech shares might finally begin to recover? 6 months? A year? Two years? Thx.

Q: Hello, Any thoughts/insights on the jump in XBC today? I have a huge loss in this stock, bought way too many shares at $4.35. I'm wondering if this might be the time to get out or whether there may be some upside from here? Thank you.

Q: Hi 5i, What are the chances of a recession in Canada in the next 6 months, and what is your reasoning please?

Q: Retired, dividend-income investor. I'm just trying to figure out where we are at in this investment cycle. In my opinion we appear to have bottomed and are now starting to see equities on the rise...but then again, it might be a head fake, bear market rally. Time will tell. Then we face the potential recession predictions...soft landing...hard landing?

So, forget all of the investment jargon for a moment and assume we have either bottomed or do indeed retest that bottom and then resume the rise in equities. Then what happens after that, when some kind of a recession possibly hits us. What do equities do? If recessions are usually short lived and markets are looking ahead 6-12 months, what then? Do equities sell off or...?

I am normally an extreme buy-and-hold investor who sets his long term asset allocation and follows it, with very little cash on hand...maybe 2-3%. I will probably do absolutely nothing with however you answer...just trying to understand the market dynamics. Or, there is the chance I might raise my cash up to 5% at the most, but that is market timing. AND, the investment cash usually burns a hole in my pocket and I historically reinvest into some falling knives. So...I usually just watch the action and do nothing besides some minor trims-adds to my core positions to maintain my target asset allocation.

Sorry for the ramble. What's your crystal ball say for the next year or so?
Thanks for your help...much appreciated...Steve