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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: The fixed income portion of our portfolio includes XBB@15% and ZIC at 6%. Portfolio analytics is suggesting fixed income assets @40%. I am not keen on adding more bonds and would be comfortable at 30% in FI. Can you suggest 1-2 alternatives for someone entering retirement?

Read Answer Asked by Rosemin on July 06, 2021
Q: Are we starting to see another sector rotation particularly back into tech? What do you see as the best sectors to put money to work in right now?

Thanks!
Read Answer Asked by Robert on June 21, 2021
Q: I realize that things are a little crazy throughout the world but can you see any particular reason that advisors of my friends ( 65 yrs plus ) are moving there portfolios into very defensive positions other than the good run in the last 14 months? Is there anything that I am not seeing as opposed to them? Thanks, James
Read Answer Asked by JAMES on June 21, 2021
Q: It seems all the Canadian banks are doing well - huge profits, reversing loan-losses, cash piles and talk of boosting dividends.

Is a lot of this profit due to the increasing real-estate mortgages being issued that have an implicit government backstop? I view this as a form of moral hazard - the banks know the government has their back so continue to lend despite worsening lending metrics like income to home price etc.

Do you see any risk from all the non-house owners in the country putting pressure on the government to reign in bank profits, as it seems only the 'rich' home owners are benefitting? Or would the banks themselves curtail lending as home prices continue to appreciate?

I know that the Canadian residential real estate market if a primary driver of our economic gains nowadays but at some point, the policital winds may shift.

What signals related to Canadian housing would you look for to make you want to reduce your exposure to Canadian banks?

Read Answer Asked by Neelesh on June 17, 2021
Q: Hi 5i team.

I'm going to try to re-phrase my question asked earlier re: levels in the S+P.

What is the S+P currently trading at and forward PE?
Since this is on the high side historically, what would be the reversion to the mean number? (I believe it's currently trading at 25xs and the mean would be 15?)
If at some point the market heads back there (as is typical in theory) what would the S+P be trading at vs where it is today?

Many thanks.
Read Answer Asked by Arthur on June 04, 2021
Q: Hi 5i team.

I am interested in your analysis of the following.

Given the markets appear to be trading at higher multiples vs "normal", can you please comment on what the current levels are, what the median levels would be (that history shows us) and what the market levels would look like if a reversion to the mean took place?

Many thanks.
Read Answer Asked by Arthur on June 02, 2021
Q: Hi folks.

With all this talk about higher inflation (new shiny object for the media) there has been very little discussion on the explosion of debt Countries have embarked on, pre, and since the onset of Covid. Seems like this appears to be a coordinated effort throughout the developed world, and as a result, no one seems too bothered, Including Conservatives.
Are there any lessons in history we can draw from? How does 5i think this all gets resolved over the next decade or two, assuming it will take a bit of time to generate enough growth to cover all this?
Are we headed for multiple Japans where the Gov't owns all or most Gov't issued bonds to control interest payments. Does this scenario create even more inflation with depreciation of currencies and a race to the bottom on exchange rates? Way above my pay grade so please take a stab at opining on this for us.

Many thanks.

Read Answer Asked by Arthur on June 02, 2021
Q: I am currently over-weight in Financials (more than 50%) in my portfolio. I am in the process of slowly re-balancing by first of all moving some $$ into Utilities & Telecommunications. What would be a reasonable % of portfolio for an average investor to have in Utilities & Telecommunications?





Read Answer Asked by Ronald on June 02, 2021
Q: I am reading "Machine Learning for Algorithmic Trading" by Stefan Janson. It states that algorithmic trading in '19 accounted for 35% of institutional trading (excluding HFT) that is increasingly dominated by ML driven systems (Rebellion Research, Sentient, Aidyia,..) and of course we all know about Renaissance.
I am curious about any comment you might have on that topic, do you see value in this for your style of trading and maybe even considered using it. Your results are already spectacular, so my question is driven only by intellectual curiosity.
Peter
Read Answer Asked by Peter on May 27, 2021
Q: What are your thoughts on the market and a big correction? Several articles of late saying it could happen sooner than we think, the most recent being a G&M article by George Athanassakos, wondering if you saw that one?

Thanks,

Cam
Read Answer Asked by Cam on May 27, 2021
Q: I noticed huge collective volatility in a few stocks that I follow for the period May 13-May 21. Beaten down growth stocks rocketed up; C3.AI up 40%, PLTR up 16% and XBC up 36%, while a typical copper producer CMMC was down about 25%. It looks to me that there is a huge amount of speculative money out there looking for very short term gains, pouncing on anything that looks undervalued and shifting from sectors that have had a good run. I guess that it means that the individual investor has a high probability of getting whipsawed and that long term investors should not be overconcerned with short term volatility. Do you have any comments on this? Thanks, David
Read Answer Asked by David on May 26, 2021
Q: In light of the expected recovery and the need to get goods and materials to the users and markets I am wondering what your opinion would be with regards to investing in transportation companies and if you feel this is a viable area to invest in, what companies would be a top investment and is there an EFT that may also be a consideration.
Read Answer Asked by Colleen on May 21, 2021
Q: Hi group - how deep is the correction going to be (i know its only a guess) When would you deploy cash into the market . What's you top pick for each of the 6 main sectors / why? thanks for your guidance
Read Answer Asked by Terence on May 13, 2021
Q: What is a growth focused investor to do in this market? I understand the shift and aversion from high growth/tech names into value stocks and the fears of higher inflation/rates affecting markets going forward are hard to predict in duration. Many growth companies are reporting solid earnings, however are still falling with the market backdrop. With a 5% cash weighting currently and as I see some of my position weights in my growth stocks decrease because of this market drop, does one A) increase exposure now to value names and sectors that could benefit in the short term such as materials, industrials, energy or B) further add to quality growth names if one has a longer horizon (8-10+ yrs) such as WELL, LSPD, VEEV, TOI, NVEI, U, DOCU, CRWD and just ignore this short term shift in sentiment? I just don't want to be catching a falling knife in some of these growth names but I see some great entry prices to add a bit at these levels with them being 30-40% off from the recent highs. Thoughts?
Read Answer Asked by Keith on May 13, 2021
Q: Hi Team,
As a growth investor my stock portfolio is about 75% high growth tech weighted (mostly US) and has now fallen 25% or so from peak during this rotation. I have so far been hesitant to trim or sell anything up to this point. Is it time to bite the bullet and cash out part of my holdings and buy into other sectors that favour inflation? Or do you think the damage is near done here and possibly start adding to beat down quality growth names? Right now the sky is falling for my type of portfolio and trying to decide which way to go. Or perhaps just do nothing...
Thanks
Shane
Read Answer Asked by Shane on May 13, 2021