Investment Q&A

Q: I have been rebalancing my portfolio over the past six months, reducing financials and energy and increasing utilities, telecoms, and US technologies ( all in companies you have been positive towards). I remain overweight financials, with Canadian Banks and insurers. I do have a very long term horizon, say 25 years, so if history and my nerve holds, my wife and I should have the desired dividend stream and a decent shot a capital gains over time. However, after reading yet another “we’re all gonna die” column from Dave Rosenberg, it made me wonder if I shouldn’t continue my shift and sell down more financials and increase in sectors with strong dividends that might better weather the storms that may or may not be imminent. What are your thoughts?
As always, I value your opinions. Thank. You.

Q: I read with great concern in this weekend's National Post, David Rosenberg's article entitled "10 Reasons to take risk off the table right now". He makes ten legitimate reasons to do so. I would appreciate 5I's opinion of the article and his supporting logic. My high risk equities are WEF, NFI, TSGI, MX, COV and VET.
Carl.

Q: In reference to my last question you made a couple of suggestions. I parted ways with CHR and NFI. You also suggested that I lacked diversification in some areas. I have accumulated cash since my last question to be deployed at an appropriate time. I have listed again the stocks in which I am currently invested in. Percentage allocation in each was listed in my last question. I have wonder if you maintain an investment profile of your clients. Doing so would enable you to provide more appropriate advice and/or suggestions. It would negate the need for clients to keep repeating investment objectives. Thanks

Q: In your recent market analysis you noted the $13trillion in negative interest bonds as a positive. Presumably the assumption is this money would move to equities for better returns. The most recent report shows the $13 trillion is now over $15 trilllion. Also central banks are cutting interest rates. Does this change your outlook at all?
Many thanks.
Mike

Q: What is your opinion on shorting the tsx

Q: Hi Peter

You recently wrote an article about investing versus gambling which neatly explained why investing was not gambling. I had no issue with your explanation, but must admit that lately I am concerned that investing is starting to feel more and more like gambling. You just do not know what Trump is going to Tweet or do next. China’s reactions are another issue. I am not confident that Trump fully understands what he is doing. Case in point , his remarks that China is adding all kings of money into the US Treasury due to the tariffs he is imposing. Look at the reactions to his plan to impose further tariffs on China and subsequent devaluation of the Chinese currency. You just do not know what he will do next. But it does look like China is digging in for along term battle. Your comments please. Uncertainty is extremely high now. So why not sell most equity investments and move to the sidelines?

Q: I know diversification helps but am looking for some recommended investments and strategies that might weather a correction better than others.

Q: I read comments that go like this..... Trump wants a rate cut so he can play hardball on trade wars......but how do Federal rate interest cuts do this? I'm like walking in the woods on this.......Tom

Q: Can you tell me what to think after the US rate cut? Dow is down about 450 points as I write this which is a bit surprising since I figured a quarter point cut was already baked in.

Should a typical investor change anything?

Q: What sectors/industry do you see as the most promising over the short, medium and long term?

Q: Over the weekend I was reading about the potential for mean reversion producing a rebound in value stocks in the US. Do you think this makes sense overall, or is it just about as likely as any of the ten thousand other 'this is what is going to happen' stock market ideas? And, do you have any CAD US based ETFs that would fit this profile and that you would recommend? Thank-you, again.

Q: Hello, With the news of Deutshe Bank in disarray and the high potential for a new 2008 Lehman Brothers scenario, are we going to see the tidal wave coming or is it already too late to run to higher grounds (higher % cash). Please advise.

Q: I used to think of bonds and stocks as generally moving in opposite directions so that bonds could be a safety factor in my account for when stocks go down. Stocks used to go down for economic reasons and then bonds would go up since the central bank would reduce interest rates to try to stimulate the economy. This worked marvelously for me in 2008-9. However, it is far more common now for them both to move in the same direction since stocks are dependent these days more on lower interest rates than economic news so they go up when there is a hint of interest rates going down and so do bonds as they always did. In reverse, when interest rates even hint of going up, stocks decline and so do bonds. Good economic news means the stock market is likely to decline since interest rates might go up. It seems that the market believes that it cannot survive any interest rate increases. So what do you suggest these days to balance against this unified stock and bond reaction?

Q: I have a lump sum from a sale of an investment property. I struggle with the decision whether to invest the money now given the long bull market that we've had and the increase in trade tensions and the political landscape. I know returns rely on time in the market as opposed to timing the market, but its hard to justify psychologically. What would you advise to do with a large lump sum? Do you see areas that are undervalued? Is there better relative value in Canada or the U.S. or abroad?

Thank you,
Jason

Q: This is a follow up question to my previous question about building a solid portfolio sector distribution.

You mentioned "If inflation picks up, you might want more consumer staples and less consumer disc (it is the other way around right now)"

Are you saying that it would be best to have more Consumer Disc now than Consumer Staples? If so, why?

Thanks again,

Fed

Q: I am trying to build a solid portfolio sector distribution, for reallocation purposes moving forward. This is only for the equity component of my portfolio. I am keeping a significant portion (50-75%) in non equity fixed income. I am looking for a retirement type Portfolio, with relative stability and good dividends. I am also worried about inflation getting carried away, as I feel most governments are not truly addressing the financial issues of the day. That is the reason for my 15% allocation to Mining. I have a house, so I do not feel I need to allocate anything to real estate.

Do you feel this is an appropriate distribution? Do you see faults in my reasoning?

Energy (incl pipelines) 8%
Mining (incl gold) 15%
Industrial 12%
Cons Disc 10%
Cons Staples 8%
Healthcare 6%
Financial 18%
Teck 7%
Telecom 6%
Utilities 10%
Real Estate 0%

Thanks once again,

Fed

Q: For years economists had referred to the Canadian dollar as the "petro dollar" in that our dollar fluctuated with oil prices. With plans by our government to phase out the Canadian oil sector (e.g. Bill C-69 & other policies) what impact will this have on our dollar in the future?

Also, President Trump wants a lower U.S. dollar. How do you think he will achieve this? And what impact might this have on our Canadian dollar and on our exports?

I had converted much of my investments to U.S. accounts when the Canadian dollar was closer to par with the U.S. dollar (& oil prices were high) and am now deciding if changes to my portfolios are warranted,

Thanks
Bryan

Q: Hi 5i,
Can I get your asset allocation suggestions for a taxable account based on the following guidelines:
1. I don't need any of this money to retire
2. account size is approx. 1M
3. I wish to buy individual US and CDN stocks
4. I will buy International ETF's if required
5. I am a buy and hold investor
6. I prefer not to have a high dividend due to tax issues
7. My RRSP's provide enough retirement income and are diversified
8. My TFSA's are growth oriented and are diversified
What is your range for:
International ETF's
US Stocks
Canada Stocks
Cash

thanks

Q: HI 5i team, recently you mentioned couple companies with a growth rate of 50%. Do you mean revenue or earning or some measure ? Will you please list top 20 Canadian companies with such growth prospect. Thanks.

Q: Hi Group - I am getting a bit concerned about the US dollar verses CAD, I hold 50% of my portfolio in us funds. If I believe that the US stock holdings I presently own are way more solid than Canadian companies but am concerned about the US dollar dropping significantly what defensive strategy should I consider? PS I trade with RBC direct investing Thanks