Investment Q&A

Q: I hear that those who make covered call ETF(s) are having a problem with the level of volatility. Do you understand what that means and whether that could cause some less liquid ones to dissapear, perhaps under a condition in their prospectus? I suppose black swan events like this one can make complicated products even more complicated to manage. Thank you.

Q: For fun, let’s assume that the markets will be shut down. What would that look like? I assume there would be some warning that they were to close, and that there would then be a lot of selling prior to that. Correct? If they were to close, how long might they close for, and what could we ‘expect’ would happen when they reopened? All very hypothetical, but whatever insights you have would be appreciated.
Also, today I tried to take money out of my personal chequing account, at TD, and they capped withdrawals at $2500 per person, per day. I’ve never had that before. Concerning?
Thank you.

Q: First and foremost looks like the 5i team is working overtime to keep up with all the questions to ensure us members are not waiting long to get answers. Much appreciated! Compared to 2008 are the governments responding faster this time around and is the play book the same or different this time? Trying to see if all of these measures will have the same benefits as before?

Q: Hello team,
With regard U.S fed interest rates cut on Sunday, would BoC follow another 50 points cut soon?
When the markets return uptrend, would index ETF or sector ETF do better?
Thanks

Q: China's economy seems to be coming back. Something I ordered in January has finally been shipped. The streets in Beijing are getting busier and of course the Trump administration seems to have finally taken the threat seriously.
If the current shutdown is successful and the incubation period is 14 days would you think it reasonable to see signs of improvement after a month or so?
Your thoughts are appreciated.
Mike

Q: What has been proving to be non-correlated to equities in this market? From a quick look, not really the usual suspects such as bonds, gold or even bitcoin. I expect the best answer to this question will come with more hindsight, but appreciate your views. Thanks!

Q: I have a few questions about negative interest rates:
1) how low was the US and Canadian bank rates back in the worst of 2008, and where are they today
2) what major economies currently have negative rates/for how long/how low (or high?)
3) for those countries with negative rates, has this affected the dividends paid blue-chip stocks on their exchanges
4) what are the best investments for "hiding out" should we get to negative rates
5) could you hazard a guess as to the likelihood of negative rates in N. America
Thank-you

Q: We Canadian like to drive and are willing block pipelines our resources re not worth anything if don’t export them our motor industry is dead how long government will be willing to pay our mortgages and pump funds in to our economy on borrowed funds
I think we re very near reccesion or let’s say reality check
Can I have your opinion on my assessment
We Canadians have very high debt so is our governments

Q: Can you comment on the repo purchases that have been ongoing and have ramped up recently in the US. Does this add another layer of concern to the markets or just what needs to be done in times like these? Is there any holding that might benefit from this?

Q: After the "blood in the streets" kind of day we have had today, March 12, was I "crazy" to add to my holdings of the aforementioned? Are their dividends as reliable as I perceive them to be? FYI, I am a year away from retirement at age 60 and value dividend income for a portion of my portfolio.

Q: Q1. Can you describe a bit what actually happens when the FED says they will inject US 1 Trillion into the market. Where will that money go and is it a loan? In the 2009 recession, it was a loan to the collapsing banks which I think eventually got paid back.

Q2. Regarding increased dividend yield on falling values of stocks, how does this work? The funds are changing hands outside of the company, so if share price drop was the only thing to happen, theoretically the continuation of the dividend should not be in doubt. Maybe the business of the company might drop for some reason if share price drops.

Most grateful for all the guidance you provide to investors and the education you offer on the function of the stock market.

Q: Good Morning

I was able to convert almost everything to cash late January and am now waiting to see when bottom is at hand. Markets appear to be displaying some signs of recovery this morning after the ridiculous comments by Trump the other day. Is there any reason we should be optimistic and begin looking at getting back in? Or do you think we still have a ways to go before recovery?

Thanks for all you do
gm

Q: Hello,

I am wondering what your thoughts are on the eventual recovery? We won’t know 100% until the virus plays out further but best guess, what do you think a recovery will look like?

My thoughts are that once the virus is under control we may see a quick turnaround in the equities market due to the economies ramping back up, but I am concerned that if this virus continues to provide more questions then answers we may be stuck in a longer downturn.

Keeping the recovery in mind, what are your thoughts on picking away at a Russell 2000 position over the next few weeks/months and what effect will a rising loonie (if Russia and SA work through this spat) have on the dollar hedging. Is it best to buy the Canadian version or the US version with this drop in the loonie and hopefully the eventual recovery in it.

TIA

Q: Your thoughts on this pls Peter/Ryan and team: with the VIX over 72 as I ask; historically (and I know all bets are off in this environment) and a best guess: are we "somewhere" near maximum panic?
Fyi I have been a net buyer over the last couple of weeks, panic creates opportunity imo. Your thoughts and opinions have been invaluable even though some have been hammering you for your answers..thanks!

Q: Hi there,

I'm currently in 100% cash. What are typical signs of a rebound and that the turbulence is over and how long does it usually take? In other words, traditionally what signals would one use to know when to buy back into the mark. Also, for simplicity sake, what ETF would you recommend buying to get torque coming of the bottom or that would lead out of the bottom/recession?

Thanks!

Q: Considering the huge drop in portfolio values, do you still recommend staying the course or would it be prudent to take profits where we still have them?

Q: What's your view of Covid 19?
In the event the contagion is contained, should we expect a meaningful market rally or would the damage done to the economy be felt for a longer period at this stage. Simply looking for your outloouk and gut feeling. Thank you!

Q: How does one preserve capital at times like these if one is fully invested, mostly in equities? This is defintiely not the time for changing sector allocation...How does one deal with having a full position SHOP for example? Thanks.

Regards,

Shyam

Q: You may recall my question a couple weeks ago when I had sold all equities and was building a defensive portfolio of inverse etfs (HXD, HQD, HIX, and volatility HUV) and asking for further suggestions for the troubled times ahead. I noted that this coronavirus is not a one off event (like 9/11 or the 2008 crash) but a steadily worsening situation on a global scale that was sure to lead to major declines (especially given how overbought N. Ameican markets have been) and also stoke volatility. My thinking was that having made the "trend my friend" during the 11 year bull market, it was high time to give the bear a chance. The virus was the spark, but it could have come from elsewhere, as we saw with the oil shock yesterday.
Needless to say, the returns on the bear bunch have been stellar (I keep moving up the stop losses to lock in any gains when the markets decide to turn positive). Each 'bad' day is putting more money in the coffers for the days of capitulation when it looks like the tide is finally turning. (Disclaimer: I don't recommend this approach to everyone, as leveraged etfs can bite both ways, and one must always use stop-losses). Many experts are chanting the old mantra "the best thing to do is do nothing" and advising us to keep our long-range objectives in sight. One problem with this is that after such routs, markets often look for new leadership and favor new sectors of the economy. This happened after the tech crash, when it was back to bricks and mortar.
My question concerns methodology: I don't really understand why anyone would hold any equities through the kind of rout we are witnessing (except maybe virus-driven names like Clorox or some of the Pharma companies working on vaccines). Isn't it far better to sit on cash (cash is king and queen) or do a bit of contrarian investing in order to keep eking out modest gains through the market mayhem? Then, one can rest easy until the dust finally begins to settle (instead of losing sleep wondering what the next day or next moment will bring), and gradually leg into your favorite long-term positions on the worse days? Am I missing something?

Q: Good evening,

I have $100,000 sitting in my account and have been very patient to enter the market over the past couple of years. Right now seems like a good time to max out my TFSA and invest a large portion of this money but the question remains where/how? Individual stocks? ETFs?.

I’m 30 years old, have no debt and rent. This money I guess can be considered my savings so there’s no timeline as to when ill need it. With an outlook of 2-10yrs being invested with a moderate risk tolerance (would like to see some decent returns) any suggestions?