Investment Q&A

Q: What stocks in Canada do you believe will do well with the passing of the Infrastructure Bill and Reconciliation Bill in the USA? Please list in order of preference. Thanks.

Q: Peter,

Bank profits are massively up. Normally they suffer when the interest rate differential between the deposits and loans is as squeezed as much as it is now. What is the big reason for the huge profit jump? Is it simply the loan revenue from mortgage lending, the reversal of prior loss reserves , the wealth management areas or something else?

Thank you

Paul

Q: Was up 30% on MG. Purchased at $84.50. Stayed too long at the party. I still like it longer term. I like the fundamentals. Do you if so why?
I hesitate to average up here. You have better insight on MG than I do. Also in my experience over the years September/ October are notorious months for market drop, I have 10% in cash for purchases just in case. It’s a large well diversified portfolio. Cyclicals make me nervous here.
Roy

Q: Hi, My questions is about the best way to hedge the current market and economy. I have a large portion of my money in the stock market, and I feel things are becoming over extended. I've thought about putting some money in the VIX, however I'm not sure if that's the best way to play a downturn. I'd appreciate if you could give me your opinion on the best way to hedge, in case of a heavy downturn in the market/economy. Thanks a lot.

Q: The data currently coming from Israel and the UK indicate that the vaccine efficacy is waning, earlier than many predicted. Given that most Western countries have employed a vaccine strategy to address Covid, I would like your advice regarding how to position a portfolio in the event of a Black Swan event.

In the fall, we will likely have another flu/virus season in northern US and Canada. Basically, I see 4 possible scenarios of decreasing probability but increasing risk: (1) the vaccine acts as advertised and we have few cases/deaths; (2) the vaccine is less effective than expected and there are many cases, but few deaths; (3) the vaccine is not effective and there are both many cases and many deaths; and (4) as has been suggested by some top scientists, there are long-term risks with these mRNA vaccines and deaths/ adverse events are much greater than if no vaccine was taken.

If an investor has concerns about scenarios 3 and 4 in particular, but is hopeful that such an event does not occur, how should one best position the portfolio. Should one stay fully diversified sectorially and geographically in stocks? Should one consider increasing allocations to gold, cash, bonds, etc? What are your thoughts?

Many thanks for your insightful advice.

Q: what sectors could really be affected badly if interest rates go up significantly? thank you.

Q: What sectors on the TSX are going to be strong in the next 3 months?

Q: Were do you see the US markets going in the next 5 months?

Q: It looks like around Seven AM this morning the Canadian dollar abruptly shot up a more than 1%, thus wiping out any gains I might make for the day. Any idea what the cause was? Any predictions about where the dollar-dollar ratio is headed in the near term? I hold a lot of US stocks in unhedged Canadian ETFs and am now reconsidering the helpfulness of hedged products.

Q: I have a number of laggards in my portfolio that have been dramatically outperformed by peers during this year's rally, many of which I already own. I realize that you have generally rated these as 'hold' when asked in the past-yet I'm seeing a substantial opportunity cost to holding while others hold momentum during these hot markets for tech, industrial and commodities.
Any thoughts on whether it is worth continuing to hold and would you advise replacing at this time. ie on the balance of possible outcomes, would I be better off to stand pat or shift over to comparables within the sectors?
Thanks,
Peter

Q: Precious metals having a good day today, assuming its mainly because of the hot inflation numbers coming out. Do you see these stocks having more room to run? I own the above. Can you rank the above stocks in terms of the inflationary environment and which have the best growth and potential. Which sectors would do the best? Also I'm low in energy, would that sector do well if inflation persists or is it mainly driven by energy prices? Do you still see inflation as transitory or more persistent? Thanks!

Q: Hi Everyone! Me again. I have been listening to some financial podcasts and the discussion came around to a liquidity crisis which these folks are predicting may happen in the fall. Now taking this all with a grain of salt, what , in a nutshell , is a liquidity crisis and under what circumstances could this becoming our way??? Cheers again, Tamara

Q: When financial aids due to pandemic shut down measures end do you expect market downdraft? In Canada the CERB will end on Sept 25, 2021. Not sure when the U.S. financial aids will end though.

Q: Over the next 5 to 10 years, which index do you expect to perform better? The S&P500 or the NASDAQ100 and what would be your reasoning? Thanks in advance.

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?

Q: Hi Team,
Do you recommend having higher cash position at this time or near future?
Thanks!

Q: Hello 5i Research
The US index has out performed the TSX index the last decade.
Do you think that the next decade
the Canadian market will out perform the US market ? What are your thoughts/ guess?
Thanks

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!

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

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?