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 I don't think economic cycles have been repealed; there will be a recession."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!
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Investment Q&A
Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.
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Dollarama Inc. (DOL $189.46)
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Alimentation Couche-Tard Inc. (ATD $69.10)
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Premium Brands Holdings Corporation (PBH $82.86)
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Spin Master Corp. Subordinate Voting Shares (TOY $23.70)
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
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?
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
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
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?
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!
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.
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
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
Q: is there a currency that Canadians could buy with Canadian dollars that is safer than our money . I am thinking that Canada's growing deficits, may not be good for the value of our dollar.
Q: Tech stocks have taken a beating over the last two months, due to high valuations and a shift to value stocks. Do you foresee a continuation of this trend into tax loss selling season and further drops, then finally bottoming out into the new year, or are we now dealing with just normal volatility?
Q: I continue to struggle to find the right level of diversification, especially fixed income in my portfolio. One of the strong reasons for my struggle is the recent very strong bond performance and concerns that I am too late.
The standard rule of thumb 60/40 blend is challenged here. I am wondering if you saw this article on the Globe’s website. Could you take a look at the article and share your thoughts on Merrill Lynch’s thesis ? As well as the suggestion of using dividend paying stocks as, at least, a particle substitute.
Thanks.
.... from the Globe and Mail Investor website ( a partial excerpt...)
The 60-per-cent fixed income, 40-per-cent equity portfolio has been an important benchmark for balanced funds and overall asset allocation for decades.
Merrill Lynch analyst Jared Woodard, however, believes the 60/40 portfolio is now far less relevant because of the rising risks in bond markets.
In The End of 60/40, Mr. Woodard cites three reasons that bonds may no longer provide the portfolio stability and consistency they once did.
The first reason is that bond portfolios have not been providing diversification. He writes, “The core premise of every 60/40 portfolio is that bonds can hedge against risks to growth and equities can hedge against inflation; their returns are negatively correlated."
The problem in recent years is that periods of major market weakness have seen both bonds and equities fall.
In the U.S., longer duration government bonds have generated terrible risk-adjusted returns over the past three years - lower than junk bonds and emerging market equities. This means that investors who bought Treasury bonds for steady returns and lower portfolio volatility have seen volatility actually increase.
The data is U.S. based, but the performance of U.S. and Canadian long-term bonds has been virtually identical, as this chart posted to social media underscores.
Mr. Woodard’s final warning about bonds concerns overcrowding. He notes that globally, the fund manager allocation to U.S. Treasury debt is close to a 20 year high. So far in 2019, investors worldwide have sold US$208-billion from equity funds and bought $339-billion worth of bond funds.
With government bonds so popular, the analyst is concerned that “Crowded positioning means that natural swings in bond prices may be exacerbated as active investors rebalance their holdings.”
To the extent that Canadian investors have made the same switch to fixed income – and the 38 per cent increase in the market capitalization of the iShares Core Canadian Universe Bond Index ETF suggests fixed income has been popular domestically - these risks are also present here.
The standard rule of thumb 60/40 blend is challenged here. I am wondering if you saw this article on the Globe’s website. Could you take a look at the article and share your thoughts on Merrill Lynch’s thesis ? As well as the suggestion of using dividend paying stocks as, at least, a particle substitute.
Thanks.
.... from the Globe and Mail Investor website ( a partial excerpt...)
The 60-per-cent fixed income, 40-per-cent equity portfolio has been an important benchmark for balanced funds and overall asset allocation for decades.
Merrill Lynch analyst Jared Woodard, however, believes the 60/40 portfolio is now far less relevant because of the rising risks in bond markets.
In The End of 60/40, Mr. Woodard cites three reasons that bonds may no longer provide the portfolio stability and consistency they once did.
The first reason is that bond portfolios have not been providing diversification. He writes, “The core premise of every 60/40 portfolio is that bonds can hedge against risks to growth and equities can hedge against inflation; their returns are negatively correlated."
The problem in recent years is that periods of major market weakness have seen both bonds and equities fall.
In the U.S., longer duration government bonds have generated terrible risk-adjusted returns over the past three years - lower than junk bonds and emerging market equities. This means that investors who bought Treasury bonds for steady returns and lower portfolio volatility have seen volatility actually increase.
The data is U.S. based, but the performance of U.S. and Canadian long-term bonds has been virtually identical, as this chart posted to social media underscores.
Mr. Woodard’s final warning about bonds concerns overcrowding. He notes that globally, the fund manager allocation to U.S. Treasury debt is close to a 20 year high. So far in 2019, investors worldwide have sold US$208-billion from equity funds and bought $339-billion worth of bond funds.
With government bonds so popular, the analyst is concerned that “Crowded positioning means that natural swings in bond prices may be exacerbated as active investors rebalance their holdings.”
To the extent that Canadian investors have made the same switch to fixed income – and the 38 per cent increase in the market capitalization of the iShares Core Canadian Universe Bond Index ETF suggests fixed income has been popular domestically - these risks are also present here.
Q: Does your crystal ball predict a recession in the next six to twelve months.
Clayton
Clayton
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BMO Low Volatility Canadian Equity ETF (ZLB $53.36)
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iShares Canadian Value Index ETF (XCV $42.59)
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Vanguard Canadian Aggregate Bond Index ETF (VAB $22.91)
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Vanguard FTSE Emerging Markets All Cap Index ETF (VEE $40.63)
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Vanguard Global Value Factor ETF (VVL $54.38)
Q: Hi 5i team,
Group A: XCV 35%, VVL 35%, VEE 10%, VAB 20%
Group B: VSB 15%, ZPS 15%, XSB 15%, XIU 30%, VCE 20%, XAW 5%
For short term 2-3 years, which group would you pick? or any better idea?
Group A: XCV 35%, VVL 35%, VEE 10%, VAB 20%
Group B: VSB 15%, ZPS 15%, XSB 15%, XIU 30%, VCE 20%, XAW 5%
For short term 2-3 years, which group would you pick? or any better idea?
Q: What do you think the impeachment proceedings will mean in the us dollar ? Will this effect the psu.u performance ? I am about to invest a large amount of us dollars in this fund, will it be affected ? Would you give some insight as to how the us dollar performed during previous impeachments please.
Cheers, Doug
Cheers, Doug