Investment Q&A

Q: I would like to get your opinion on where you see the markets headed between now and the actual release date for a vaccine? I can’t think of any catalyst to drive the markets higher considering they have recovered all losses since March.
Thanks

Q: Given the current environment, No economic growth and slow downs in everything including resource companies, (mining, agriculture, etc) because of the pandemic. Are higher prices for commodities not coming across the board? Would this not be considered the set up for Stagflation? Moreover, how will global liquidity by all western governments contribute to this?
Your thoughts are appreciated.
Regards.

Q: It feels like the USA might slide into a civil war in the next few months (i hate that i have to even consider that awful outcome) . Do you ignore the possibility and remain diversified? Or rather take some profit now while the market is riding high and move to a higher cash position (what percentage might you suggest) while waiting it out for 3 months?
I know you cannot predict the future but is this even on your radar?

Q: Mott Capital U.S. (a guest on S.A.) commented on Nov. 11 that in reality the point of no return for high flying tech stocks may be here. Do you feel this is a fair comment? I greatly respect 5i's opinions and information received.
I was logged into 5i a previous guest was trying to find some information and it was mentioned something to do with the footer. Where would I find this footer? In times like this it is good to have 5i on our side.
Thank you.

Q: Retired dividend-income investor. Now that there is a bit more certainty regarding the outcome of the USA election, can you provide an update as to the "big picture" investment world for the next year or so?

We kept hearing there were basically 3 big issues = USA election, Covid and its related vaccines, and the timing/amount of USA stimulus. Impact from the split Congress? Impact on the severity of Covid and the timing of potential vaccines? Amount of USA stimulus in the near term?

I read the odd question about the potential for a 20% correction on the horizon. There is always a correction around the corner, but do you see us getting back down the the March 2020 lows again?

I'm currently sitting on roughly 6% cash and have been deploying $ into the markets on a steady state basis for the last 4-5 months. Just wondering your thoughts? I was planning to carry on with this strategy, but wanted your crystal ball views first.

Thanks...Steve

Q: I'm interested in your take on the likely effects on the markets of the two major significant events that have coincided: Pfizer's positive announcement regarding its vaccine, and the Biden victory.

Regarding the former, some commentators are suggesting that, after many false starts, there is at least a shortish term tradable opportunity in value over tech/momentum, partly inspired by a rotation out of the stay-at-home trade and a move into the Covid19-bitten cyclicals. Given that such a rotation would have to overcome the current vulnerability of under performing value stocks to tax loss selling, do you concur in this view, and if so, which sectors in value would you suggest have the most potential?

Regarding the Biden victory, how much of the clean tech trade do you think is already reflected in the market? Given the less confrontational world view of Joe Biden, would you now view the markets of China, Europe, and even Canada more optimistically? What else does the Biden victory (or the Trump loss) bring to the trader's table?

While I'm sure you wouldn't advise over-reacting to political events or corporate announcements, the transition from authoritarian to democratically-inclined leadership in the world's most influential country, in addition to a potential cure to a devastating pandemic, are not run-of-the-mill occasions. Assuming this new world is permanent and Biden's victory stands (most likely) while Pfizer's vaccine has no hiccups (less likely), an analysis of how one might adjust investing strategy, no matter how incremental, would be appreciated.

Q: Debating either of these, in a registered account approx 5 to 7 years before needing. Looking ahead with positive US election and vaccine news and how the CDN dollar will likely behave; which is better fund?
Thank you

Q: Generally, is this a good time to buy on the tech stock dip? Names like KXS, WELL in Canada, DOCU, VEEV in U.S.

Q: Hi group what's your top 4 sectors /stocks/etfs in the US assuming Biden is going to the white house the market seems to like the set up with Biden winning but Senate going to republicans Thanks for your insight

Q: Good Morning
I will appreciate any comments you may have with respect to the effect on the stock markets regarding the outcome of the US election so far.
Thanks

Q: What are your 3-5 best current ideas for growth companies in Canada? Given uncertainty in economy and markets and the recent pullback, could growth stock underperforming value stocks over the next 12 months?

Thanks,
Jason

Q: I started resp for my daughters 15 years ago. My older daughter will start university in close to 3 years, and my younger one will be completing her univeristy in 9 years. Currently, in their RESP portfolio, 67% is cash, 11% is mawer global small cap, 14% is mawer global equity, 4% is mawer canadian equity, and 4% is BAM.a. I would like to put more cash to work to get some safer growth. BAM.a seems to be cheap right now. Is it a good time to buy some more? The Canadian dividend etfs only half recovered from their March lows. Is it a good time to buy some? If so, do you have any favourable etf names? Or do you have any suggestion on alternatives? Any tips on the portofolio weightings will also be appreciated!

Q: Like an older Robin Hood I have been buying the fang stocks and selling covered call options since the Covid arrived. Well, not quire like the Robin Hood kids, I suppose. I have done quite well with this strategy. But, I have been worrying that the fang's are flying pretty high and might be ready for a fall. Especially with a volatile US election on the near horizon. I also wonder there might be a shift to value as the economy might start to kick in before too long. So, l am thinking about selling a lot of my Fang stocks before the election and waiting till after it is over and buy RSP, the equal weight S and P etf. Even if it doesn't work out as I have envisioned, this is pretty much the direction I had planned when l started buying and selling the tech stocks. I have always found it informative and usually profitable to get 5i's reaction to my plans
Thanks

Q: Ishares US REAL ESTATE ETF (not in your data base)
can you comment on this ETF for a diversified real estate play. Do you view this as a decent entry point.
What's your view of starting a portfolio of these 5 ETFS with a 20% weighting in each, then rebalancing every year back to the original 20% weighting. Im hoping maintaining the 20% cash position will help smooth out the portfolio in these uncertain times, maybe it will outperform the more popular 60/40 portfolio.
thanks Gordie

Q: The Cdn dollar is trading at around 76 vents US. At this exchange rate would you buy a hedged or unhedged S&P 500 ETF in Cdn dollars

Q: As MARKET went down and perhaps will continue for few days what a panic investor like me do?SELL, HOLD, OR SELL HALF?

Q: Hello. The other day, a friend of mine told me he will be retiring soon but because he doesn't have sufficient income, he is planning to refinance a $300,000 mortgage on his fully paid principal residence and invest that amount in Canadian large cap dividend stocks.

The difference between the 5 years fixed mortgage rate (1.6%) and the dividend he earns from stocks (6%) will be around 4.5%. $300,000 x 4.5%= $13,500/ annum. Given that dividend stocks such as Enbridge, TD, BCE, some REITs are quite depressed at the moment, there is also the possibility of capital gains as well.

I wonder about the risks of such an action. The 2 worst scenarios I can think are that (1) The pandemic will linger for many years and stocks will not recover for a decade or longer (esp. stocks like O&G stocks like Enbridge). It may force even the largest institutions to stop paying their dividends. (2) As a result of the financial hardship and further stock market crash, there will be capital loss at the end of the 5 years mortgage term. Besides these two scenarios, are there any risks that you can think of?

Supplementary questions:
1) Do you think the risks are higher than the reward?
2) Is the current market condition at this moment a good time to do something like this?
3) Lastly, if I were to do something like this, please suggest several price depressed large cap stocks that you think their dividends could be reasonably secured through 2021.

The answer may take you longer than necessary. Please deduct as many points as you wish. Thanks!

Q: If Biden is elected and the Dems sweep,is it reasonable to expect folks to sell their winners to lock in the present significantly lower capital gains tax when compared to Biden's proposed tax?

Q: I have a taxable corp account, 94% equities,(28% US, 6% cash. Just read an article that bonds even at 0% expected return would help off set losses in this and upcoming volatile market, even though interest would be fully taxed.
Would you suggest;
1. sell some winners or tax loss some losers and buy a bond fund, ?CLF. ?CBO-or another one you might recommend. What weight percentage would you suggest?
2. use the cash to buy the same bond fund or a combo of the above two or your alternative
3. buy a preferred corporate share or shares? suggestions or preferred ETF ?HPR or another suggestion
4. Would you suggest a US Bond fund, ?suggestion
5. do nothing
Thanks and deduct what you see fit

Q: Looking to Mr. Buffett's behaviour in the past, he seems to be investing in whole industries, like airlines and most recently with the Japanese trading houses.

Do you think taking a similar strategy works in select Canadian industries as well?

For example:
Buy and hold all the Big 5 Canadian Banks (BMO, BNS, TD, RBC, CM)
Buy and hold all Major Grocers (Empire, Metro, Loblaw)
Buy and hold all Major Telecoms (Rogers, Telus, BCE)

Or do you think there's a better way to mimic this through an ETF?