Investment Q&A

Q: Hi
The income model portfolio contains about 2% fixed income/bonds. Is the model portfolio meant to be followed as it is or are investors to decide on their own allocation to fixed income/bonds? I have been disappointed in my bonds. I know they can help soften the blow in a market crash but this is pretty expensive insurance so to speak. What is your position on bonds? Should one be increasing their bonds at this point in the market?
Thanks

Q: Looking forward to 2022 I think there is a recession coming at us. (Personal Opinion). Looks to me that growth companies are going to continue to face severe headwinds. I also think industrials, financials, energy, and health care will be the sectors that will start to outperform others. Of course I'm open to debate regarding my choices and welcome your opinions. However, I would appreciate 3 or 4 examples of companies that you believe are set up to outperform in these sectors. If I've missed any sector please feel free to add your ideas. Thanks for your valued suggestions.

Q: Do you think that Nasdaq stocks are now more attractive as a result of the steep drop in U.S bond yields.

Q: Hi Team,
My stock portfolio has dropped a gut wrenching 12% just this week alone, and 27% since august. All while the index's are near highs. I am aware most my stock holdings are aggressive tech names, but I am confident they are all best in breed names. I hold many of 5i US tech name favorites as well as some cnd. Its's a bloodbath like I haven't seen since the initial sell off when covid hit. At that time, I remember 5i came out with a very good "near bottom" report advising subscribers the end may be "near". As I recall it was very close! Thank you for that! What I am asking now is...will you issue such a report when the time comes as to when to potentially add to high growth tech names that have been crushed on no merritt of their own? Or can you say now if that time is near? And what stocks, either US or Cnd would you be adding to for 5yr plus holds that have the potential to make an exceptional recovery? I know this is a crystal ball question but your track record is good in my eyes! Thanks for your service. Look forward to some "calming" advice.

Q: On 25 Nov my portfolio dropped 2.4%.
On 30 Nov my portfolio dropped 2.7%.
On 30 Nov, still stinging from the 2.4% drop, I was watching the 5i questions but nobody was asking about the stock rout. I assume most investors were reviewing their positions to see what their exposure was.
I didn't do anything at all. But I kept watching for questions and related guidance.
Can I have your advice on what to do on a day like yesterday, where Bloomberg said futures fell due to Omicron so this was a forecast I could have acted upon. Also, the Fed was said to be more hawkish due to inflation and was going to accelerate completion of its bond buying program. Probably a few other significant factors. In this type of market, did I do the right thing? Or should I have been trading my riskier positions yesterday? My intuition says I should have done more earlier, but when I saw no related questions coming, I assumed investors were busy trading to have less exposure.
Just a few thoughts from the wounded.

Q: Hi 5i Team!
Wondering with the new variant if anything has changed in terms of your outlook on stocks going forward. When faced with lots of volatility if one has a well diversified portfolio, relies on dividends for income and has a long time frame until retirement can a buy and hold strategy be adopted? With so many investments I would never be able to time the perfect exit, know when to rebuy, so I just buy and hold. I know you are not fans of stop losses, nor am I, but do you also ride out bear markets and hold investments rather than sell and reenter. Your thoughts would be most appreciated. Thank you!

Q: I have noticed that trading volumes of most of the stocks, except energy stocks, are down significantly today although the overall market is up quite a bit. This trend has been consistent in the last few days. Is it indicating any ominous event that might happen or is it just a normal event?

Q: Do you have an opinion as to approximately when at year-end the selling of beaten down stocks for harvesting capital losses is generally sufficiently exhausted that one can consider stepping in where desired? If so, would your opinion be the same for US and Canadian markets?

Q: Morning Peter and Team,

Would you please shed some lights on what both the Canadian and US markets were like during periods of high inflation (touching double digit) in early 1980s.

Also how do see the markets will react now if inflation continues on its current path of 4 to 5% annually. Please name sectors that would benefit from relatively high inflation and sectors to avoid.

Cheers,
H

Q: Hi Peter.

Many of my and other high growth stocks have taken a beating. Many of them down more than 50-60% plus off their highs. However, the DOW and the NASDAQ don’t seem to have taken a tumble of that proportion.
My concern is that if this is truly a “bust “ as some pundits are calling it out to be and the indices like the S& P etc are due for further drawdowns, that could result in these hard hit high growth stocks going even down further.
In simple terms, how does 5 I see this playing out.? By stopping to taper, is the Fed creating another bust as they shore up liquidity?
Thanks

Q: So, it looks like the US has expanded their money supply (M2) by 40% over the last 18 months. That's 40% of all money "printed" since 19681 Firstly, that seems like a terrifyingly huge expansion and I'm hoping I've got it all wrong, but if that is the case, it would seem the amount of money floating around the system needs to eventually find a home which would likely lead to a significant bull market for quite some time.

How would you interpret the mid and long term effects on the stock market as a result of the most significant monetary expansion in the history of the US? Have we seen the bulk of the effect already baked into the market?

Q: Should investors be concerned about the current valuation of most companies in the stock market? Investors like Michael Burry have been warning about the consequences of overvaluation in the markets. Thanks

Q: When the 2009 financial crisis hit, governments used significant fiscal stimulus which set off a huge bull market.
My questions are:
1) how many years of a bull market was this responsible for?
2) should we expect a similar bull market duration from the 2020 market crash and resulting stimulus due to Covid?

Q: High inflation numbers have come out--what do you think? Do you believe we are entering a higher inflation world, and if so, what (i) sectors and (ii) specific stocks would you emphasize for that? Thank you!

Q: I use XIT as my technology proxy and NNRG as my energy proxy, both in my TFSA. My current thinking is to trim-add around core positions to meet portfolio asset allocation targets.

In general terms, what does your crystal ball say about future performance...1-2 years out? Eric thinks energy could double. What do you think technology (XIT) will do...lately it seems to be around the 30+% for a 5 year average? Just trying to ballpark their relative potential performance.

Thanks...Steve

Q: Dear Peter and team,

I know from your previous answer to my question and others, you believe in momentum as an important factor in investing.

Do you think the recent price action in the energy and Gold sectors are real and sustainable? Do you think they have the momentum and the legs to go for some more time, say a year?

Gold has hit 1900 before but really hasn't gone beyond 2000+ in a sustained fashion. Plus Bitcoin is here to stay?

Q: Hello, I have 3 questions:

1. What do you think about CTS Third quarter report today?
2. What do you think about TMD company?
3. What do you think about simultaneous breakout in gold and USD?

Q: Hi, Peter

Rates are going up. One of these days, we are going to wake up and hear the news that rates have gone up and we're all going to say, "Oh, geez, I wish I had done....X",

What's X? What will we wish we had done before rates start going back up?

Appreciate your thoughts on this atypical question.

Robert

Q: Hi,

What would be the implications of China waging a war on Taiwan on the markets..US and others may jump in too ..Chinese seem to stocking up groceries and other essentials..
Do you think slide due to Chinese real estate and the country’s policy to tech companies likely to continue and what sectors do you think will be most affected. Thanks for your insight.

Shyam

Q: with the infrastructure bill passing what companies would you recommend as being in the best position to benefit.

Do you feel it might be better to be in infrastructure companies or stay with high growth companies in technologies.

Thank you.

Donna