Investment Q&A

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?

Q: FOMO with my current stash of cash....I've cleaned up some small positions and been sitting on the cash for what seems like forever now....The market is always right but I still have red lights flashing and alarms bells blaring in my investor brain with the markets continued moving along like all is normal. I am buying some target names that haven't bounced back in small amounts but I am starting to question if I should get back into the market again with my hoard of cash....

What are the 5i collectives thoughts on good cash position right now. Currently I am at 15% cash while I am usually at 2% range. So it isn't like I am 100% cash but still some FOMO thoughts fighting against market correction coming cash hold.

Q: When we are facing the specter of the federal government spending without regard to the future and the Governor of the Bank of Canada saying negative interest rates are back on the table, how could investors reposition their portfolios to mitigate the negative aspects of these events? Can you provide a few examples across the various sectors where one could start to reposition a portfolio?
Thank you...

Q: When the bond market reverses which sectors of the market would benefit.
Please list your top 5 names on the TSX under such a scenario.
Thanks Richard

Q: When Trump won the White House in the last election stock market rebounded sharply. If he is successful next month I would think we would see the same, however if Biden wins his election platform is quite different and wonder what your opinion would be if this is the case.
As an investor should we be locking in gains now.
Thanks and look forward to response
Rick

Q: I was wondering if you would be able to give me a few stock buy and sells based on the upcoming US election.

1. If Trump wins, what stocks could do well and what stock will not do well.
2. If Biden wins, what stocks could do well and what stocks will not do well.

Can you give me a few of your Growth Portfolio stocks that you might considering lightening up on and a few stocks that you might consider purchasing more. (Feel free to add in any other CAN stocks and a few US stock as well).

Q: Hello Folks:
I have about 20% of my portfolio currently in cash and am usually close to 100% invested. In your humble opinion is this as good a time as any to buy or do you feel we have enough significant risk to hold off?
I certainly understand no one has a perfect crystal ball, however do value your insight!
Thanks again!
brian

Q: Hi

Based on the current events show going on in the US.
I am thinking of selling all my US holdings and buying them back when the dust settles.
Capture the gains and buy them back at a steep discount.
Your comments Please

Thanks
Mike

Q: I’m considering adding to my SHOP and KXS positions and initiating LSPD and CJT positions. I’m in no hurry and would like to purchase shares that have gone on sale(lol). I’d appreciate your commentary on the likelihood of the impact of two events in our immediate future and their impact on prices. My concerns involve: (1) the coming of winter and the impact on LSPD as restaurants shutter, potentially for good and (2) the impact of the US election if the result is dragged out for weeks in an ugly transition of power. I have no problem buying today, and I know you don’t recommend timing the market as there is always something to worry about, but it seems foolhardy to not consider the impact of events staring us in the face. Thanks for the guidance.

Q: Thanks for the recent update, I look forward to your monthly emails.

With respect to point two about locking in some profits, I've often wondered how this works for institutions. Would they actually sell their portfolio and go to cash for the remainder of the year? Do most mutual funds not have to be mostly in the market thus having only a small cash position? I suppose you're referencing other major institutions like pension funds, hedge funds, etc.? Are they more flexible in how much cash they can hold?

Personally I'm tempted to sell to lock in my 2020 gains which have been my best ever (lots of great 5i picks, thanks) but then the question of when to get back in always confounds me. I'm all registered accounts to so no loss to write off and no gains to worry about at tax season.

Say one did want to lock in some gains what would you suggest? Selling high fliers, only to potentially miss some more gains? Sell the lagards? Sell the high risk? Balanced?

Cam

Q: In one of your recent updates there was a bar graph which compared the performance of all sectors of the economy. Technology outperformed all.
Going forward over the next year. is there a sector or sectors that you think will perform better than others?

Q: I've encountered, in less than a week, no less than four articles in various media, predicting that the US dollar is going to 'crash' in 2021 with suggestions it could drop 35%-50% in the coming year. This one on CNBC is an example. https://www.cnbc.com/2020/09/23/us-faces-dollar-crash-high-double-dip-recession-odds-stephen-roach.html

Obviously this would be disastrous to anyone with US dollar holdings or stocks in US accounts. What do you think of this? I know you're generally against hedged ETFs but do you think that might be a decent idea now for those wanting to hold US stocks?

Q: The Fed has basically said that it will keep interest rates low for the foreseeable future, and allow inflation to run a bit higher, to average 2% longer-term.

It looks as if we will be heading into a new investment environment where interest rates could be lower than inflation for an extended period of time. In this type of environment, what factors, sectors and geographic regions do you see doing well? Given the high current valuations for high tech and FAANG stocks, do you continue to recommend overweighting this sector for the next few years?

Thank you for your valuable insights.

Q: If we found a Covid-19 vaccine tomorrow, what are the most depressed companies now that would benefit the most?

Q: What would you conjecture would be the market's response if the following were to occur: 1. Biden wins so decisively that Trump leaves with very little resistance 2. The Republicans win the Senate and 3. Shortly thereafter, we come up with a successful vaccine ? Thanks.