Investment Q&A

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

Q: I am worried about Cdn household debt and the credit cycle turning..
What are some sectors should investors be in if this starts picking up traction?
Or should I be trimming into more cash?

Q: What is the ‘street’ telling you about the upside, flat or downside in the market for the remainder of this year?
Clayton

Q: Hi team
do you think that the market is fully valued now ?
can you name 1-2 sectors that are under-valued that a value investor could keep an eye on ? many thanks

Michael

Q: In his profoundly influential book, The Battle for Investment Survival, originally written in 1935, Gerald Loeb states: "Indeed, should some super-solvent agency agree to preserve the buying power of capital for a substantial length of time at a stated fee per annum, informed people would embrace the plan enthusiastically if they felt there was any real possibility of the agency staying solvent."

According to Bloomberg, 17 trillion dollars are invested at negative interest rates today. Surely, much of that is smart money. Is that money acting on Loeb's dictum?

Q: Hello 5I,

Just trying to better understand the recent shifts in the stock market sentiment here in Canada. Over the last couple of weeks, I note that safe dividend growers (mainly utilities: AQN, FTS, TRP etc.) and REITS in general are trending down. So are growth stocks such as SHOP, CSU, LSPD etc.. I also note that resource stocks are on an upswing lately. Are investors seeing an upswing in this sector or are resource so cheap that they have nowhere to go nut up?What is driving the market? Are lower interest not expected anymore here in Canada? Is the pending deal in the USA-China going to benefit resource stocks in Canada so much that we will see an uptick in inflation and an eventual rise in interest rates in Canada vs. lower interest rates in the US? I am wondering what am I missing? I know no one can read exactly what will follow, but can you help me better understand the "What and Why" of what is trending currently. Thank you!

Q: I'm in the middle of switching my portfolio to a much more simple style. I've always indexed my US exposure with ETFs like VOO and VFV and have bought individual Canadian stocks just because the Canadian index is so unbalanced, holding mostly resources and financials.

I've looked at VGRO and VBAL as well as XGRO and XBAL. I'm hesitant to buy them because they have a high percentage to the Canadian index. I also don't want emerging markets or any EAFE exposure. I'm a huge fan of Jack Bogle and he preached that all anyone needed was the S&P 500 and a bond fund. Since app. 48% of S&P 500 sales are non US, it seems to me investing in EAFE is unnecessary.

My plan is to go 60%US and 40% bonds. Since Canada represents just 3% of the worlds markets, why do most Canadian investing professionals say to put 30% or more in Canada? Doesn't make any sense to me! Thanks for your help.

Q: On BNN the other day a portfolio manager said November is the second best month for Stock Markets and December the best month while September and October are the worst months. Is this so ? November is starting off as if this is correct Dow up 301 points on November 1st 2019 alone. Sell in May and go away has not been the case has it ? Your thoughts . RAK

Q: I recently attended a fall 2019 session of Larry Berman Live. His prediction was for a recession in 2020 or 2021 and he recommended that investors adjust their portfolios accordingly. I am interested in 5i's thoughts about an upcoming recession and whether 5i members should become more defensive with their portfolios.

Q: My question concerns my rif which has 50% cash right now with u.s. div. stocks representing that 50% invested. I am considering investing equally in usmv - aem and cwb (convertible bond etf) in this rif. Does this make sense in todays investment market with the u.s indexes at all time highs and trading sideways or should i hold that cash into year end . That cash in the rif represents about 23% of my overall cash position. We are 70 yoa with enough income from canadian dividend stocks to supply us with our living so look at this amount as next generation money...thanks for the great service...

Q: Hi team
the real estate sector (XRE ) and utilities (XUT) and telecom (like BCE)
has pulled back last week,
is there a sector rotation to another sector area ? (which could be Buy ?)

like to know about your expert opinion
thanks
Michael