Investment Q&A

Q: I’m generally sold on the US and Canadian markets for the long term due to historical superior returns and risk versus Europe , EM and Asia and for the most part a better environment for doing business. What would be your suggested allocation between Canada and US outside of non registered accounts ( this I have 100% Canada due to high quality names and tax advantages).
Thank-you.

Q: With the Canadian trading so low, do I assume correctly that this would not be a good time to buy US stocks? Does the same assumption apply to hedged investments such as ETFs and CDRs? Thank you.

Q: The Canadian dollar vs Euro has appreciated quite a bit over the last year +. Can you provide 3 or 4 names that look attractive both from a growth perspective and possible upside with Euro vs Cdn dollar FX in the future.

Q: With the upcoming balance sheet tightening by the fed does it make sense to have dry powder in the event that markets drop again significantly. If one is fully invested what percentage of cash would you usually recommend? Thanks. Shyam

Q: An article in the Globe calls this a bear market rally - What do you think the chances are he might be right?? Thanks , Jim

Q: Greetings,

Some people believe Mr Rosenberg gets out of bed from the wrong side on more days than not but his negative market reasoning seem very fair to me .... or not?

Are you able to comment on his newspaper article note of caution?

What is your gut feeling on what the markets may do over the next 6 months?

What do you think the chances are of testing the recent 52 week lows?

Thank you !

Q: Greetings 5i,

What are your thoughts on INTEL? What are your thougths on the domestic tailwinds via Biden Administration and roughly 75B in federal support for domestic chip manufacturers? Seems almost like the industry is being considered a matter of national sercurity in the US and will back the chip makers. Are there other companies who stand to do well in this environment?

Cheers!

Q: What are 5i’s thoughts and analysis on $CAD vs $USD?

The Financial Post article below highlights forecasts of 5% upside (loonie towards .80c usd). What do you expect? Time-frame, certainty in closing the gap, etc.

https://financialpost.com/executive/executive-summary/posthaste-why-the-canadian-dollar-isnt-done-yet

Would now/months from now be a good time to convert some $USD to $CAD (i.e. moving over US equity index/stocks in USD to the same holdings in $CAD).

Q: You recently issued a questionnaire which asked for various market predictions and made one or more responses mandatory, which precluded a closing explanation. So here it is. When Putin stops slaughtering Ukrainians or better still kicks the bucket along with his chum Blatherov, and Russia agrees to terms and conditions which obliges them to conform to a rules based system for trade and adopts democracy as a system of government, the equity markets might have a chance of recovering, providing China brings North Korea to heel, stops lying, misleading, maneuvering for lands and waters it is not entitled to or cheating on a whole slate of activities, some of which intrude into our systems of democracy, and likewise agrees and accepts conditions which oblige it to conform to agreed rules for trade, providing Iran does not overturn all of the above. Until then it is a crap shoot.

Q: Is there a China bank crisis looming or already here. What is your opinion on the effect on the world economy, commodities, and stocks. Thanks for your insights.

Q: As we progress through the dog days of summer and possibly approach the winter of our discontent, the number of questions being asked of 5i seem to be lower at this time. Is this a summertime normal occurrence? Otherwise, is it possible that the number of questions asked day by day could be a useful metric of investor interest in the stock markets. If so, then as the number of questions increase, could this indicate that the market is in the road to recovery. This would not be a “bet the farm” metric but would appreciate your thoughts on the matter.
Thanks for your valuable service.
Cyril

Q: With growth and upside being the case for buying stocks with no earnings and having a lot of them losing 80% in value over buying a stock with good earnings and less growth, is it the same story now for investors to buy the growth stocks that they may be down 80% and hope that the stock can come back when the market gets overpriced again, or lower your greed and be happy with a 10% yearly return.
Thanks again

Q: I get raising the interest rates to stem inflation. However most economists are signaling a good chance of a recession or slowdown by year end. That obviously would call for lowering the rates. Is this scenario likely.

Q: In another question, you answered: "We believe that inflation will moderate into 2023, interest rate hikes will be paused sometime in Q3 or Q4 of this year, and a recession to last until Q1 or Q2 of 2023."

With this expectation, what are some good sectors and stocks (trading on the TSX) to be in in this environment?

Q: Hello 5i Research Team
I read today that the BOA team survey team said that we have witnessed the full capitulation In the market.Please provide me with your thoughts.
Thank you for your guidance.

Q: Hi 5i, can I have your current view on the market with respect to inflation, interest rates (inverted yield curve) and recession chances. I realize markets are forward looking and I'm trying to guage future rate increases as I have a few quarters of dividends to spend on income stocks. Oh, and what would be your top three dividend stock picks now? Was looking at SLF, BNS and AQN, but based on your answer to first part, I may hold off.

Thx

Q: Today Jeremy Siegel was asked about the main sources of market returns for investors i.e. multiple expansion, dividends, earnings growth, stock buy backs.

The person asking the question said that over the last 10 years 40% has come from multiple expansion, 15% dividends, most of the balance from earnings growth.

100 years ago 50% came from dividends.

The Q then was “ where will the returns come from in the near future?”

His answer focused on the massive role played by STOCK BUY BACKS.

Finally my Q:

Do you agree with that looking ahead this will be a major source of stock returns ( vs multiple expansion and dividends)?

Is there a filter to ID companies with the highest buybacks( similar to historical data on dividends)?

Thanks.

Q: The dot-com bubble of 1999/2000 exposed investors to risk that legendary investor Sir John Templeton called "temporary insanity" ultimately resulting in Nasdaq's 78% decline from it's high. Just over 20 years later, one could argue, the same sort of "temporary insanity" took hold and we have now seen only a 30% decline with many high-flyers losing 75%+ of their value yet for some reason still are getting recommended. An current example would be Lightspeed. It went public at $19 and ran all the way close to $160, up almost 800%. Now it's around $26, down around 80% from the high. Upstart would be another one.

Solid companies such as Cisco & Qualcomm survived the dot-com crash but never reached the earlier stratospheric valuations again.

Question: What makes this time any different for growth stocks? Or should growth investors really temper their expectations? I can't imagine these and many other surviving companies reaching those lofty levels again....and certainly not in the near future.

Q: Hello:

I would like your opinion, in general, about commodities and their path forward, especially precious metals and oil. At what point are we in the commodity cycle and what is the timeline that you foresee for it? Do you have any specific predictions about oil and metals? Thanks. Flo

Q: Jennifer Gauthier in the Globe presented an article indicating that some of the key drivers of consumer price growth are declining. ie. oil (WTI) drops below $100, wholesale gas price drops 7%, lumber prices are a fraction of their pandemic peak, freight rates on major shipping routes have fallen 40% since September 2021 but remain a lot higher than pre-pandemic rates.

By contrast, Eric Lascelles Chief Econ. At RBC Global Asset Mgmnt. is quoted as saying that inflation has spread to a wide range of products rather than just a few key drivers and he believes that inflation has not yet peaked.

I have a few questions after reading it.

Do you agree with these assessments?

I suppose the way to know that inflation has peaked is to see it drop. Would it be unlikely to rise soon after once the market signals it’s peaked?

At the peak, do you see any sectors rising quicker than others?

Do GIC rates quickly start coming down once the peak is signaled?