Investment Q&A

Q: Hi!
I'm concerned about the potential for a looming recession in the context of increasing interest rates, especially in the US. As a way to hedge against increasing interest rates and to protect against downside risk, I was wondering if you could recommend some high growth, high dividend paying stocks, US or Canada?
Thanks!

Q: Given the recent volatility in the US I am wondering about portfolio insurance in the short term. While holding cash is one way to mitigate a drop, I don't really want to hold much more than I currently do so I'm wondering if HIU would be a good way or if there is some other strategy you might suggest. I hear many comments about more significant declines, with the trade issues that are currently occupying a lot of political talk, raising rates, and, if the Dow gets back up to the 26,000 level that could be a double top, all of which make me nervous.

So, since I am a long term investor, rather that take profits and raise more cash, what would you do for some short term downside portfolio insurance? Thanks

Q: The latest Liberal budget seems determined to put the nail in the coffin for Canada's economic future.
Some points from the Financial Post: “Declining business investment remains a critical concern for Canada, which is a signal that entrepreneurs, investors and business owners don’t see the country as a hospitable place to do business. From the end of 2014 to the latest quarter with data, the level of (non-residential) business investment in the country declined by 19 per cent, after accounting for inflation. Among a group of 17 industrialized countries, Canada now has the second-lowest level of business investment as a share of GDP.”

Your thoughts?
What is the mood of investors and business owners that you have spoken with?

http://business.financialpost.com/opinion/morneau-delivers-a-budget-in-deep-denial-about-the-dangerous-territory-were-in

Q: Is the correction over? If yes, technically when did it end? I know the technical correction start time; what technical event declares a correction has ended?
Many thanks for this, Elmer

Q: Hi Peter and Team - I know this question is a little outside of the regular type of question/answer component of your services and that you are not in the business of predicting macro economic events. However am just wondering if you have any thoughts on how interest rates may play out over the next couple of years both in Canada and the U.S. With the tax reform package now passed in Congress is it quite possible that this could lead to fairly major inflationary pressures in the U.S. and therefore substantial interest rate increases. If so then what might be the effect on Canada's interest rates and resulting stock market movements. Thanks.

Q: Hi,
I am wondering what would be a good template to go by in terms of how much of an overall portfolio should be Canadian ,how much in US,international and emerging markets.
For example would you Suggest 60 % be in Canadian equity or bonds, 20 % US, 10% international and 10 % emerging markets .
I look forward to reading your suggestion on this.
Thanks so much,
Susan

Q: What do you see as the best strategy to benefit from downturns like what we’ve seen lately. Is it just make sure you always have cash to deploy when one happens or is there some stock/fund that is average most of the time but really benefits from the pull backs somehow?

Q: Just as the financial crisis has resulted in identification of banks which are "too big to fail", what, in your opinion would be the consequences if a computer trading program were to be identified as one that is either "market moving or trend prolongation". Would the average retail investor not be on a more equal trading position if those computer were made to make public those events which trigger their buy and sell? If we all decided to jump on the exact same trade, there would be no winners and losers . If AI computer trading accounts for more and more of the trades then, short of the individual investor pulling completely out of the stock market, how does one have any confidence in their own investment thesis?

Q: I have been wondering for some time about market valuations and your recent comment about inflation being bad for markets has raised it again for me. If a market is doing reasonably well and inflation sets in could there be a reset of stock valuations. If so what sectors could get re-evaluated and is it across the board in a given sector or specific to certain size market caps?
Thank you
Clarence

Q: could you please comment on todays decline in both the tsx and dow any reasons why and is this a correction or a sign of things to come thankyou

Q: Can you help with secor allocation for 2018. Realise that the allocation will vary depending on factors such as risk tolerance, age etc. Just seeking your thoughts on reasonable ranges for allocation with a view to tweaking our investments. Thank you as always for your much appreciated assistance.

Q: Hi 5-i:
I read somewhere that the volumes in the stock markets are generally highest at the open and near the close , because etf's are investing any
overages. Any truth in this? Could I assume that this is a good time or
bad time to trade. When in your opinion is the ideal time of day, if any?
Thanks,
BEN.

Q: The stock market performance of the TSE for 2017 was poor compared to other world stock markets including the USA. Do you expect more of the same and if so, what major world exchanges would you invest in 2018. With thanks, Bill

Q: Any particular reason the markets fell so much on Monday? Do you think this is the start of a larger trend or market correction?

Q: The TSX has not performed very well this week. I think the weak US $ is putting downward pressure on Canadian stocks. Do you agree?
What other factors may be working against the TSX at present.
Thanks

Q: Hi Gang,

How accurate would this be, its a clip taken from BNN.

We’ve been keeping a keen eye on the yield curve as it’s the best predictor of an impending recession. While the curve is flattening (short end rising while long end not rising as much) we are but two to three rate rises away from inversion. An inverted yield curve generally leads an actual recession by ~12 months. Based on our calculations we are at least ~18 months away from the next recession.

Thanks
Anthony

Q: If the U.S. gov. shuts down. how will this effect the markets..how has it effected the market when it has shut down in the past.

Q: Dear Team:
I have been retired for 5 years now and have been self investing with a return of 13.58% on average. I have reached 60 years and feel that I should have more fixed income as of right now; I have about 12% of fixed income. My portfolio size is over $1M. I have 2 questions for you:
1) Do you think I need more fixed income?
2) If I was to increase my fixed income, I am thinking of an ETF for either Re-set Preferred Shares or Short Term Corp Bonds or Real Return Bonds. Which do you like?
Thanks for your time
Jim

Q: What was the sector rotation in the US you spoke of yesterday?? It was "a fairly strange market day with a giant US stock reversal."

Q: A question about Geographic Diversification.
Percentage of Canada, USA and World Stocks?
What is the recommendation? For 2018?
Thank you.