Investment Q&A

Q: It appears that the corona virus is continuing to affect the world markets...
I realize that it is still very early in the developing story but what kind of affect did previous health situations have on the U.S. and Canadian market place???
Ed in Montreal

Q: I am a retired, conservative, dividend-income investor who is normally fully invested with a "buy-and-hold, but trim-add around core positions" strategy.
I currently have 2% in investable cash, with my portfolio set up exactly where I want it now...good asset allocation both via sectors and via individual position sizes.

However, I am also looking at the macro picture and things seem to be going parabolic. I am contemplating trimming to increase my cash position from 2% up to 5%. I understand in the past you have indicated that the key things to watch are interest rates are unemployment. They are both low, so "let it ride". So, what to do...let it ride vs trim? I know this amounts to market timing, which I know you are not fond of and, coincidentally, I am lousy at.

In your past life, as a fund manager, when did you raise or invest your available cash and what factors pushed you to do something or to just sit on your hands?

Thanks...sitting on my hands for now...Steve

Q: Interest rates. I use the theme that interest rates will show where the country is in the business cycle. At this time interest rates will be declining or will be stable rather than rising. Therefore the chances of a recession are very low to low.
I would appreciate your opinion.
Clayton

Q: We’re do you see the Canadian dollar in relation to the US dollar this year? Weakening, same as it is today or strengthening? Also would it be stable or with volatility?
Clayton

Q: Reviewing the issue of asset allocation and I must say that I have been avoiding bonds. The ETF approach interests me, but when to by is a mystery, re; haven"t seen bond gains lately. Appreciate any clarification you can provide & thanks!

Q: I am in my early 30’s. In terms of creating a strategy for buying and selling stocks shouldn’t I just always be buying stocks, even if the market goes down?

If I have a 30-year run way until I start withdrawing or using the funds wouldn’t it be best to just find great companies to average into?

Your thoughts are greatly appreciated in advance.

Thanks,

Dave

Q: Hey Guys,

What are we to make of the constant negative headlines on some websites (zerohedge in particular) that talk about a recession coming this year?

I have been hearing in the headlines for years that there will be a recession...but it hasn’t happened yet.

I just don’t want to invest right before a major downturn like in 2008.....

What to do?

Thank-you.

Dave

Q: Hello Peter, I am thinking of shifting my portfolio to bit more defensive and generate some income too -
1. option 1 - To increase allocation to fixed income / bond type position.
2. option 2 - To buy more of defensive positions - like BNS, BCE, CU, FTS, MCD, HD, JNJ,
3. Counter position - that would have counter move to market drop.
Question - How would you approach / handle the situation and what would be your choice in each option.
Thanks

Q: What would you suggest looking to buy in anticipation of a potential crisis in the Middle East which unfortunately now seems imminent. Oil and gold I suppose are the obvious sectors that come to mind. Thanks.

Jason

Q: I have some US funds to invest. Growth and some protection in a downturn. What stocks? I am thinking IHI,VZ, V or IWO ?? other suggestions?

Q: When will the buying of stocks begin for 2020. Most of the stocks that I hold have traded below their averages for more than two weeks.
Appreciate your service.
Clayton

Q: Hi could you please share your views on the level and direction of interest rates for the next 1-5 years. Thanks.

Q: Has the time come to get back into Japan? If so can you recommend a mutual fund or ETF as a vehicle? I'm looking for a reasonable yield, blue chip quality, with Yen and/or US exposure.

Q: I manage my daughter's investments and will be selling a mutual fund (RBF1018) and plan to purchase XIT, as her asset allocation is light on technology.

86% of XIT is made up of SHOP, GIB.A, CSU, OTEX. P/B = 5.3 and P/E = 35.2. Technology has had quite a run this year...the chart looks parabolic and might possibly be forming a double top. I heard years ago that after a big run, stocks may settle back roughly 1/3 of the recent gain. This would put the "settle" price to be around $25.

I know this is the same as market timing. OR....just buy it now. Your thoughts?

Thanks...Steve

Q: I'd like you to comment on a change in the banks recently as per Money talks

in short... end of July saw all 5 banks reporting quite well with Loan Loss Provisions (LLP) as expected if not maybe a little low.

Now this past week all five appear to have seen significant turns.

CIBC saw their profit dip 6% which is really unheard of. Plus, they increased the Provisions for Loan Losses (PLL) by 52%. TD earnings slipped 4% with a PLL increase of 35%. And Royal Bank president Dave McKay said "based on what we're seeing today the next couple of years are likely to be challenging." RBC Provisions for loan losses jumped up by 41%.

I read somewhere else where it was said these increases in funding for loan loss preparation is an indication the banks are "down turn ready." Is this the canary in coal mine?

With all the recent growth in the markets, is this something we should be concerned about? I think this could be a very significant story-line moving forward for investors.

Thanks for all you do

gm

Q: I have quite a bit of money to invest but I am in no hurry, maybe even in January as there are a lot of problems in the world just now.
impeachment, British Vote,,Brexit, Trumps antics, upset world
What are your thoughts or suggestions

Ernie

Q: I was interested in Brookfield Asset Management CEO Bruce Flatt's comments during a BNN interview with Amanda Lang this week. Flatt said that "We are close to 11 years into this economic cycle. I don't think economic cycles have been repealed; there will be a recession." He added that Brookfield is more cautious today than it was in 2009 during the world financial crisis. His company is holding lots of cash and staying diversified to weather the downturn. With 5i's years of investment experience, I would appreciate your opinion on the risk of a recession and your recommendations for capital preservation of investment money if such a situation might occur. Thanks!

Q: Is it timely to start a position on the above 4 stocks,& please rank them in order.Thanks for u usual great advices & services

Q: There is all this talk about a recession coming and sharp drop in the markets. I'm wondering what is the best way to respond to these events when they occur? If we look historically is there a trend that points to the best time to start buying after a big market drop? I'm just thinking when he market has dropped say 20% in a day due to an event, some may jump in instantly or the next day and invest their cash holdings, then the market may drop another 10% due to panic. Is it best to ride it out, but maybe miss the first post pullback pop, I believe you mentioned most bear markets last a year or 10 months roughly on average, so what point of that cycle was historically the best on average to get back in, 3 days, 3 months, etc? Thx

Q: In your answer yesterday to Michael regarding economy as a whole you said .... The keys are interest rates and earnings. Interest rates are now moving lower, and earnings growth should be decent next year, after slower growth (tax cut comparisons with 2018 and trade wars) in 2019. We would consider it fairly valued. There is a lot of money sloshing around, and the economy is good. There are also far fewer stocks than in past cycles, due to buybacks and merger activity. While a 5% to 10% correction would not surprise us, we are not overly worried about a 2008 market-type scenario.
While true I have been noticing more and more layoffs in the news lately and was wondering at what point this has an impact.
CN. 3000 laid off
Alberta Innovate lays off 125 of 650 employees
U of C 250 laid off
13000 predicted layoffs in the oilfield coming
200 lost jobs in Kelowna Tolko mill
More mills in BC closing