Investment Q&A

Q: I put a bunch of new money into my various holdings after some of the big market drops. I did miss the bottom and have just come into quite a bit more cash. Would you be deploying now after the recent gains, or do you have reason to believe there will be another sell of and decline? I have a tough time thinking the crisis is over, and if the stock market is just going to go up from here that really means the entire world overreacted doesn't it?

Q: Hello Team
I am hearing different comments, and one from David Rosenberg in particular, suggesting it is quite possible to see a 60cent dollar in the not too distant future and I would appreciate your thoughts. Further to this personally I feel that the markets seem to be going through a period of "irrational exuberance" and personally I feel we are only at the beginning of what is to come in terms of a downturn in the Canadian economy. With this in mind, what would your thought be of changing some Canadian dollars in my accounts to US dollars for investment purposes. I would also consider using a US ETF such as GLD to play the rising gold stocks. Appreciate your thoughts

Q: opinion question, the markets seem to be bouncing back.

What is your opinion on the market bottom having been reached?
What are the 3 biggest variables to affect the canadian markets in the next 6 to 12 months?

Q: This is a wild market which has rebounded well beyond my expectations since the March 23rd lows. Do you subscribe to this resurgence which seems at odds with reality? I know the market looks forward but, geez this is really optimistic...
What do you think?
Thank you.

Q: Good morning guys:
In layman’s term to an average Joe investor, what is going on here ? Why are the markets going north with the economy in a pandemic. I can see the stock market going south real quickly . Can I get your expert opinion on what’s taking place here..
thank you for doing such a great job during this difficult time for all clients
Mark

Q: I am hearing Depression more than a recession. Which one is worse in your opinion. When was the last depression?
Which sector does well in each scenario.

Thanks for the great service.

Q: The guy who predicted the 2008 financial crisis is now forecasting a depression 10 times worse than the 2008 crisis.
Furthermore Rosenberg predicts it will take 10 years to get out of this Covis 19 downturn.
I will appreciate your insight.

Q: I noticed how supply chain related companies are growing after watching the mess with PPE and other medical supplies. I also read/hear there may be a rise in Nationalism in the future. I tend to believe this also, but Canada rushed signing the CUSMA the last day before breaking from Parliament (which I think was reckless considering we were in a crisis). I'm guessing most people (including myself) don't know a lot of what they signed off on. So do you think it's possible this may limit the amount of "new" Canadian manufacturing taking place as far as North America is concerned?

Q: Morning 5iTeam, During the 1918 pandemic, how big of a hit did the financial markets take in Canada and the States? And how how long did it take for both markets to recover to pre-1918 pandemic levels?
Cheers and your great work is much appreciated.

Q: I know u are more about stock but my question is do u think I should change all my Canadian dollars not invested into US funds. Right now about 50/50 in Canadian stocks and US stocks. With Oil being down the growth in US stocks seem much higher to me. I understand just your opinion..

Q: I hesitate to ask because I find that some of your subscribers expect you to answer questions which are far from your stated ambit, but at the risk of being lumped in with them let me go ahead anyway. Would you know if the Government of Canada published a budget for 2020-2021, and if so, did it change the capital gains tax formulation? Many thanks.

Q: IF and that is a big IF we have all missed the bottom on American larger caps should I be now focusing on US small caps and International markets? When I look at SPY and VIG all th money has jumped into American large caps and more or less erased the huge loss and pairs back some of my gains from 2019...so huge collapse gone...for now. I've topped up some VIG but missed on SPY. When I look at US small caps they are lagging and I assume this is due to the higher risk and lower volume, Same story for Europe, International and emerging markets. So my question is should I be shifting to adding IWO, XEF, and VE. I need to add some international content to my portfolio anyways as I am a bit light at 12% international ( developed) and 10% emerging markets. If you agree or don't strongly disagree what ETFs do you recommend right now ( I already hold the one mentioned). I am leaning toward a bit of IWO and larger positions in VE and XEF.

5 year window, high but slowly lowering risk tolerance, Balanced portfolio follower ( shifting slowly to income follower), overweight canada (40%) and US(40%) ,

Q: Are you believer's that there will be a double bottom? I am seeing mixed comments on this. Obviously I know you cannot predict the future, but wondering what the likelihood would be of testing the lows seen in March. What rationale do you have for your thoughts?

Thanks so much for your wisdom, expertise, and sound advice as it continues to help me navigate these uncharted waters.

Q: Hi there, I saw a long term chart the other day of the S&P500 and how the market typically bottoms, relative to the spike in the VIX. In past recessions/corrections, it appeared that the market tended to bottom out about 2 to 3 months after the VIX has spiked. Based on your experience, do you see this happening again this time around? If so, that would approximately give a mid May to mid June bottom. Do you see this pattern to likely repeat or is it this different this time in your opinion and what would the reasoning be?

Thanks for your input and guidance!

Q: This may be a "crystal ball" question but your view would be appreciated on interest rates in say 5 years. Given the stimulus in place and what more may be needed until the economy really restarts and the borrowing all that entails, do you think rates rise significantly in that period or are we in a lower for longer extension of rates for the foreseeable future. Any factors or variables to consider that you think might affect your answer? Thank you for providing your opinion. Ken

Q: What are the chances of the current economic turmoil leading to Debt Crisis and / Mortgage crisis.

Q: The VIX is below 40 this morning. Is that a sign that the worst is over or are investors becoming dangerously complacent. How does 5I interpret the recent movements of markets.?
Thank You

Q: Negativity re Covid 19 seems to be decreasing and attention may be switching to the economy, beginning with this weeks reports. Everything I'm reading suggests that the massive testing required to safely open the economy just isn't there, and a vaccine is far away. Meaning a later rather than sooner scenario for business as usual. Today's retail numbers and bank earnings have moved the market lower and only reflect March's partial shutdown.Do you see the markets recent Covid 19 optimism, being replaced by economic negativity, with markets deteriorating further towards Q2 numbers. I have a large cash position and cognizant of your buy slowly strategy, but can't help thinking the worse is yet to come.
Thanks Peter.

Q: What instruments do you use to determine an inverted bond yield curve?
Do you think we had one last year?
If an inverted yield curve [bear argument] occurred, what would signal it's reversal [bull argument].

Q: In your update, you say that "if an investor is not an optimist and does not fundamentally believe that the future will be better than the past, it might require a rethink on why one would bother to invest in equities at all.". I am an optimism by nature, but since 2 weeks, I am struggling with the apparent need for the Federal Reserve liquidity. It seems that once again, if central banks had not injected trillions of liquidity, many companies would have gone bankrupt. We could say that this is a "special world event", but, still, you start to wonder if one's optimism for growth is not instead optimism for government support. We just got a glimpse of what corporate high debt levels can do to stocks, small businesses, and even canadian renters. Interesting times!