Investment Q&A

Q: With high Canadian government debt, increased money supply and excess stimulus spending, I feel inflation is a growing concern. Your thoughts on real return bonds (XRB) and commodities including Tek,B, and Suncor as well as the Can$ in the coming year?

Q: What to you consider the long term consequences of the Democrats now having control of the Senate and House of Representatives with regards to prospects for Enbridge? Of immediate concern is the rumoured pending announcement by Biden to cancel the XL pipeline in an effort to appease the left leaning members of his party.

Q: I’ve held a small position in SJB as sort of an insurance if the market were to take a tumble like it did back in March. Although it’s performed poorly the rest of my portfolio has performed well (many thanks to you). I’m considering selling & rebalancing but thought I would get your opinion. Would you ever recommend a strategy like this? Or is simply staying diversified a better option?

Q: Hello
In Friday's (Jan 15th) Globe & Mail, Clyde Russell warned that the 2020 bullishness on commodities may not continue into 2021 because China's massive buying spree seems to be ending (e.g. Dec imports of copper were down 8.7% from Nov's imports etc). What is your view on commodities for 2021?
thanks

Q: I was wondering if you have an opinion on the risk coming from possible political stability/volatility in the US. While I would guess your answer is status quo, it is hard to think of a more alarming political situation, and right now, increased susceptibility to a subsequent event, such as an outside threat.
Also, somewhat related: with the stimulus package now priced in, do you still think that there is a catalyst ahead for another leg up in the market? Is it any different from our current theses (environment, pot, tech, industrial, gaming etc)?

Q: Markets are very high. Do you anticipate a crash like last year? And how should we position ourselves at this time? Thank You.

Q: Hello 5i team
As a front line (nearly retired) physician, I recently received a Covid 19 immunization. It's difficult to express the REMARKABLE sense of gratitude and euphoria that I observed among everyone involved . Suddenly, we felt liberated from the danger of this scourge that we face daily. Our next exciting job is to immunize our fellow citizens as fast as humanly possible and as we do, this euphoria will spread to society at large.
After my immunization I bought a new car and we're booking our fall and winter travel plans. This manic behaviour, I believe, represents the tip of the iceberg for pent up demand which will be unleashed upon the world.
At the risk of being labelled a mercenary can you identify some sectors which are still beaten up and likely to surge-I'm thinking energy but other suggestions welcome (prefer etf's with a dividend to keep me invested until the recovery occurs-would supplement with high conviction stocks)
Thank you. As always, I value your opinions, Regards gary

Q: I'm now seeing many many people on different social media platforms, including very young people, talking about day trading, leverage, how much money they made on this or another stock. It reminds me very much of the tech bubble when, overnight, everyone became a stock market investor and guru. Are you seeing any of this and is it going to float prices higher do you think?

Q: What would be the top 5 trends you see for 2021 and what 2-3 stocks would you recommend for growth in those areas? (US or Canada)
Take as many credits as needed.
Thanks!

Q: I currently have 4% of my overall portfolio in Consumer stocks (DOO and GOOS). Having a difficult time trying to talk myself into increasing my overall percentage of Consumer stocks but have noticed you were up to 20% Consumer in a recent suggested sector distribution you made. Why so high for Consumer?
thanks, John

Q: Hello and thank you in advance for your reply!
We are hearing more and more talk about a disconnect between the stock market and underlying economies. How sustainable in your view is the current market surge (ie: is this typical of any January), or should we be concerned about another significant correction like last March? If the latter, any recommendations you'd make with regards to less volatile or more defensive sectors, or a more balanced portfolio distribution? With best regards, Aaron

Q: With a Democrat Senate, higher government spending, rising inflation and an expanding 10 yr yield, what would be your fixed income allocation for the next five years? Do any of the above choices make sense? Thanks.

Q: Good morning - I was reading an interesting GS report which is calling for a structural bull market for commodities, starting in 2021. Let's say GS is correct. Assuming that, what would you suggest for a Canadian investor, both at home and in the US. Also, is there an ETF or two that you would suggest to address this assumed trend. Finally, do you think GS is on or off target here?
Thanks

al

Q: Hi guys,

Should the Democrats hold all 3 houses, what is your prediction for the North American markets. Drastic sell off or same as before.

Thanks

Jim

Q: Which sectors do you expect to perform best in 2021?

Q: Hi 5i team,
Peter, I enjoyed your last FP column and your fearless 2021 predictions. In your predictions a year earlier for 2020, you predicted the U.S markets would beat Canada, and they crushed Canada. For 2021, you did not make one for Canada vs the U.S, although you said technology would outperform, where the U.S. has a big edge. While I have a growth and U.S. bias, I did move a chunk of funds back to Canada in 2020 to pick up some value names and some newer tech names. Hence, my question. Who will be the big winner in 2021 – the U.S. with its big tech, healthcare and consumer names (the favourite) or Canada with its financials, energy and materials names (the perennial underdog)?
Thanks again for your insight over the years.
Dave

Q: Are we approaching a point where we should be cautious about putting new funds to work in the Balanced Equity 5iPortfolio? Valuations are high and for some reason one of the world’s best investors is sitting on mountains of cash?

Q: As an answer I'm looking for a general discussion (not a treatise) on sector allocation.
Have you or would you produce a recommended weighting of sectors, and where applicable, sub-sectors.
Are the traditional sectors still relevant? Should we be trying to fit all the emerging technologies (SEMI CONDUCTORS, CONSUMER PRODUCTS, 5G, GAMING, EV, AI, AUTONOMOUS DRIVING, SAAS, GREEN ENERGY, RENEWABLES, GENOMICS to name a few) into either INFO-TECH or one of the traditional sectors. What percentage of a portfolio should be in emerging technologies regardless of sector etc?
thanks, Hugh
p.s. you answer many questions that involve sector allocation - you may want to create a category for this in your searches.

Q: On December 23 of last year, you suggested an asset allocation for 11 sectors for a retired dividend-income investor. I found it helpful.
For 2021, what would you suggest the allocation for 11 sectors be for a balanced portfolio with the focus tilted more to capital gains?.
....Thanks.....Tom

Q: Question regarding the Canadian dollar. Do you think it will continue to gain on the USD and your best guess at a timeline regarding a peak if you see one? Also, what do you think a peak might be ($.90)? I realize this is speculative but appreciate your best guess.