Investment Q&A

Q: Not all that long ago this stock was in the mid 60's and just falls everyday, sometimes as much as 5% in one day. Do you still like this stock? Have you any idea what the problem is with it? On the Canadian side, seems like pretty well all of the Canadian stocks are falling. BBD.B went from $550 to $450 then back up to $525 and then back down to $445. Is this going to do what it did in the past, causing people who got involved with it to lose a bundle? Thanks, Dennis

Q: How do you expect markets will react if the Democrats take control of both houses in the upcoming elections?

Q: Please comment on Turkey's financial crisis and how would it affect US ,Canada and China stocks price. How should we prepare for the impact. Thanks a lot

Q: Good morning 5i,

Can you please provide me with your top 10 Canadian growth companies regardless of sector or market cap?

Q: Hi,
Im young (33) with good income and savings for investment for the long term. Im thinking of putting my portfolio 50% into etfs for long growth and 50% into equities for faster growth. I like the etfs since it has been shown time and time again that it is rare to beat the market long term with just selecting individual companies. With the 50% in individual equities, I would rebalance probably once per year (unless large bumps in price happen) to take profits and move them to the etfs to maintain the 50% split for a while and protect against losses. Do you think this is good approach? What basket of etfs would you recommend for this approach? Or would you look at something all in one like VGRO? If a basket of etfs is recommended would you prefer hedged or unhedged? I have read/heard a lot about a coming recession and potential dive in the US dollar (from people like Peter Schiff), so Im not really sure how to protect against that (other than growing my cash reserves also to be ready to purchase on a large drop). Or would you use a combination of ETFS and gold somehow? Thanks for putting up with my rambling here, please deduct what you need to for credits.

Thanks

Q: Hi Peter and Team,

My question is about what is the best strategy and behavior during a downturn in the markets?

From my reading of previous answered questions and on other posts on the internet, the advice seems to be, do not sell while the market is dropping. How can one be disciplined enough not to do it? What if one stock in our portfolio is dropping more that the rest during a downturn in the markets? At what point while the market is dropping, should we consider buying more quality stocks?

Thanks again for your good work.

Marvin

Q: Hi,
Have inflationary pressures become real due to the tarrifs? Do you expect this to start having impact on prices and therefore on the stock market? I suspect Trump might back pedal once these tariffs start impacting markets. What are your thoughts? Thanks.

Shyam

Q: Hi group I am taking a bath on tech stock both in US and Canada . Looking like market is going to value on these stock as opposed to growth. I also am losing a lot on financials like Visa + PayPal. What strategy should I use going fwd . Preserve capitol or wait out what happening or? . I know that this info is scattered info but generally what is your thoughts going fwd Thanks for your guidance

Q: Hoping for some education on economics here. In an answer to Terrance about portfolio weightings, you were suggesting 20% be allocated to Industrials and 5% to Materials. I would have thought Materials would have been higher in this scenario on the assumption that a strong industrial sector would boost raw material costs.

Is the reason for the suggested minimal Materials allocation because of your oft-stated concern that Material producers tend to be price takers and not price makers or is there an underlying economic reason where material costs are shown to lag production increases?

Appreciate your insight.

Paul F.

Q: Hello 5i, This is about re balancing my non registered portfolio by region. I currently have a my portfolio at 20% fixed income and 10% balanced. Now for my growth portion, what mixture would you be balancing your portfolio. US, European, Emerging markets and Canadian. It seems that over the next couple years the growth will be from the US and Emerging markets but would like your assessment for the regions and then what sectors. Thanks

Q: Hello 5i I haven't seen a sector percentage recommendation since last Dec. Could you please provide some guidance based on our current political and economic situation.
Thanks T.

Q: I've been waiting for a significant market correction for awhile. I blew it with a 3x U.S. bear ETF at the beginning of 2017. I'm getting itchy again. What U.S. market strategy would you suggest if you felt that a downturn is overdue? I'm not as liquid with my Canadian holdings so I'm only focusing on the U.S. for the time being.

Q: Hello 5i: Is there and indicator (or set) to help identify an eminent bear
market, and if it happens what would be the best step to take to minimize
the downturn of a portfolio
thanks
F

Q: I recently saw Phil Davis suggest that the stock market reacted very negatively during Nixon's presidency when members of his inner circle were indited and that this was a good time to go to mostly cash. Can you please comment on whether you think this is good advice for investors and if it is historically accurate. Any other opinions you have with regard to Trump's presidency affecting the market would also be appreciated. Use as many credits as you think appropriate.

Q: Hi Peter/Ryan,

Most of the companies in the BE portfolio have significant US or Intl exposure in terms of operations/revenue. With a portfolio allocation of Canadian (BEReport) 50%, US (ETF) 30% and Intl (ETF) 20%, the actual allocations will be higher for US and Intl since a portion of BEReport is derived from US or Intl. Please let me know your thoughts and any suggestions in terms of portfolio allocations.

Thanks
Ninad

Q: Please suggest weighting for 9 sectors for a balanced Canadian equity portfolio. Exposure for US and Fixed income is elsewhere:
Consumer
Staple
Energy
Financial
Health
Industrials
Technology
Material
Utility

Q: With interest rate hikes seemingly imminent and tariffs not going away for a while, which 3 categories of the 10 following in the Canadian market make the most sense for new money today, especially for immediate short term 1-2 years gratification?
Materials, Consumer Cyclical. Financial Services (includes real estate), Communication Services, Energy, Industrials, Technology, Consumer Defensive Non cyclical, Healthcare, Utilities

Q: Hi Peter, Ryan with all the tariff talks, if it ends up not working well for everyone and there is a trade war among countries how would a recession affect stocks. Thanks, Nick

Q: I’m investing for a parent who is currently 100% in cash, is nearing retirement and has never invested. They will not actually need income for another 3-5 years, but I would like to generate some dividends, so they can see actual cash coming off their investments (this may be reinvested). I think dividends will help psychologically if the equity portion declines as they will at least “be paid to wait” while the market recovers.

I am considering constructing the portfolio as follows:
30% Cash – PSA
50% Bonds – ZAG
10% Equity – International Dividend – PID
10% Equity – International Broad Index – XAW
10% Equity – Canada Growth – 5i

Can you provide 5i’s 2 or 3 highest conviction calls right now. I’m looking for growth at a reasonable price. Not looking for yield, but would like it to at least pay a modest dividend.

I would also be interested in any views you have about the suitability of the portfolio and any alternative / additional suggestions you may have.
If there is a correction in the equity markets in next few years or one of 5i’s A companies slips on a banana peel, I may look to put some of the cash to work and increase the equity potion.

My tactical views are: interest rates will rise with the US leading the way, the US broad equity markets are looking very expensive, Bonds are generally not a good investment and at low rates they will get killed by inflation over the long run (but they reduce volatility).

Also, in terms of allocating these investments between non-registered and TFSA, how should I generally be thinking about this? International stocks and bonds into the TFSA until it’s full and cash and Canadian stocks in the non-registered account? I don’t think they will be making any new contribution so perhaps there is no way to use the RRSP.

I look forward to your thoughts and apologise for asking a multi-part questions. If you start to run out of steam, don’t worry about the tax questions.

Thanks

Q: Seems likely we’re headed for a bit more inflation. Assuming this thesis plays out, which sectors do you think should benefit and which sectors should be avoided? Are there specific companies that could benefit greatly and which companies could be badly hurt?