Investment Q&A

Q: For the last 11 years - I have been investing in Canadian companies with a track record of dividend increases. I have been a 5I member for most of those 11 years and you have always provided very insightful guidance - Many thanks!

The strategy has worked pretty well and is very tax efficient owing to the Dividend Tax Credit. Recently there has been alot of political talk about "taxing the rich" particularly vis a vis the capital gains inclusion rate - with less - but still some talk about elimination of the DTC. ("Rich" of course means anyone with any taxable holdings at all).

Aside from the obvious impact on my tax bill if the DTC were reduced or eliminated - I worry that there would be huge impact on the Canadian market. What are your views on the likelihood of a change to the DTC and would you expect a large impact on the stock price of Canadian dividend payers.

Thanks!

Q: Hi
with inflation rising what sectors should we consider being in and which should we avoid

Thank

Q: A recent guest on BNN market call (Blackswan Dexterios) mentioned use index overlay to protect on the downside. Being in the sales game it is portrayed an the sprinkling of magic dust. Going under the hood they are obviously making the use of options.

What specific strategies involving options do you feel are useful for this type of strategy ? Buying or writing calls or puts or any strategies such as straddles etc. What are the pros and cons?

Thank you,

Paul

Q: Hi,

I recall conversations years ago where people were commenting that the market is expensive, but the quick rebuttal was always-were else are you going to put your money.

In your opinion, is there an interest rate level where institutions start to move out of equities and back into fixed income. Additionally, is there a 2-10 or 5-30 year spread level that would signal any potential issues for the equity market?

thanks as always for your valuable insight.

Q: I am a 74-year-old, retired, conservative investor. Please advise if investing new money into REITS and Preferreds would be advisable at this time when it is likely that interest rates will be rising in the near term. My portfolio is currently balanced with 50% in 5-year laddered GICs, 10% in corporate bonds, and 40% in income generating ETFs; 51% Canada, 32% U.S., 15% Europe, and 2% Asia. Thank you.

Q: I see anecdotal evidence that 25 to 40% of the population is unvaccinated and will not get the vaccine. What does our economy look like with 25 to 40% unemployment if mandates force these people out of the workforce?

Q: You have said that there is lots of money on the sidelines. How do we know that? Who’s money is it? Retail or institutional? If it’s retail and a recession comes will it come back into the market or be spent or elsewhere?

Q: Has the smart money turned bearish? If so, what does that look like?

Q: Canadian/USA dollar, where do you see it in 6 months/1 year according to economic uncertainty, which currency would you want to be involved in?
thanks

Q: Dear 5i,

does VIXY behave like a leveraged ETF such that they are not suitable for buy and hold investors. I understand that leveraged ETF's reset every day and there is price erosion so they are only suitable for short term investing. Would VIXY be ok for a buy and hold investor who believes that there was going to be a significant correction in the overall US market in the medium to long term? Your thoughts are much appreciated.

Q: Given the consensus opinion that rates are likely to rise, do you perceive a risk that the US dollar might spike, driving down the price of commodities, especially oil? Could a 2014 scenario be in the cards?

If the dollar does rise significantly, could oil/gas rise in tandem? Would you be inclined to position a portfolio for higher oil and gas prices in the coming year or so, regardless of what the dollar does?

Q: Nasdaq is down again today (Monday) after a period of many down days. Sentiment right now is poor. Can you provide insight on what is happening and when and how this will reverse trend? Is this a time to be buying or sitting tight and waiting for things to start to turn?

Q: Hi 5i, I like to know what 5i thinks of the huge US & CAD government debt, this could be a very interesting topic for a column. What is the US credit rating today? When will the various credit rating agencies chime in with their view on US T-Bills. Do you think that it is very likely that the ratings will be down graded (rated)?

Q: In the interests of proactively rebalancing my portfolio for the coming year, I'd appreciate your recommendations on the sectors you would be inclined to overweight in 2022...and those you would underweight. On a related note, my tech stocks have now grown to 21% of my total holdings. As a recent retiree - with a solid pension, reasonable risk tolerance, and relatively balanced portfolio - would you be comfortable with that weighting? If not, what would you advise? (As a loyal 5i reader, I'm mindful that portfolio weightings are a personal call.) Thank you.

Q: Hi Team,
My tech/ growth portfolio is getting massacred today on the spike in 10yr yields again. Should I be holding or dumping some stock to raise cash?? Your opinion would be much appreciated . Thanks

Shane

Q: Bloomberg is saying today "Tech stocks sell off amid spike in treasury yields". Can you please explain what the spike in yields is referring to, how much is the spike, will it move somewhat predictably with the withdrawl of govt liquidity from the market, etc?
For a retiree, should I do something?
Really appreciate your clear views. Many thanks

Q: In the most recent edition of "Canadian Money Saver", you commented: "After many years of solid gains, the ride may get a bit bumpier next year." Black swan events notwithstanding, compared to today, where do you think the market will be at the end of 2022? Thank you.

Q: What percentage of each would you suggest for a good balance between Canadian and US stocks at this time? (Thanks so much for your help. I have benefitted immensely from your good advice for a few years now.)

Q: Failure of the US Congress to raise the debt ceiling is being described as catastrophic in WSJ and other business journals. We should never presume anything with this US government. If this happens the market could tank big time. I am concerned there is too much complacency in the market right now. I would be interested to read your comments.

Q: Hi 5i, my question is on asset allocation and I know this is a personal question. That said, I'm getting older and capital preservation is even more important to me now. I'm thinking 6% gold, 15% cash, 10% REITs, 15% fixed income (including preferred shares), and the rest (54%) in stocks throughout the world but mostly North American based. Is this reasonable for someone that's getting older? and am I missing any asset classes.
Thanks