Investment Q&A

Q: I do not recall the rationale for the change in RRSP rules to lift the requirement that RRSPs had to have a certain percentage in Canadian equities. Canadian companies have a hard time raising equity, and this rule change must have caused a lot of money to leave the Canadian stock market for the US. I would support a reinstatement of the rule for any new money. If Trump wants to hit Canada with tariffs there is no reason why Canada should encourage investment in the US.

Q: How should I protect my portfolio before Trump introduces tariffs of up to 25%. Which companies would be most affected and might be sold before this happens?

Q: Hi 5i,

Basic clarification - when you allude to allocation percentages in a portfolio - do you 5i - speak to the allocation % in an OVERALL Portfolio? Example (All non reg and registered investment accounts) or within a specific portfolio (i.e. RRSP etc.)?

Thank you!

Q: Hi Peter and 5i Team,

Recently, Noah Solomon has had several articles in the Financial Post in which he describes the inherent dangers of the S&P 500 due to its high valuation, warning signals from the CAPE ratio, etc. (I’m using VFV as a typical ETF).

What is your assessment of his views? What strategies might a retail investor employ if there’s validity to his thesis?

Thanks as always for your insight.

Q: In general, how should Canadian investors consider adjusting portfolios in light of the tariff threat? Should they be reducing exposure to Canadian equities on a relative basis? What fixed income /cash alternatives should be considered?

Q: Could you please tell me what the average P/E is for the 11 sectors of the TSX?

Thanks in advance, Carl

Q: Hi Folks,

With some uncertainty in the future, including possible US tariffs and reaction tariffs, I curious if you have any thoughts on what those actions might mean for the short and medium term. I assume they would be withdrawn at some point (so not asking long term). Specifically, how banking (TD, BNS), and companies CSU and DSG and the overall TSX. Please free free to deduct 5 questions.

Q: I read Frederick Vetesse’s article in the Globe and Mail today (Jan. 8) about the currently high P/E ratio indicating a potential stock market crash, and would be interested in your comments on it. I’ve included the link here:
https://www.theglobeandmail.com/investing/personal-finance/retirement/article-why-a-stock-market-crash-may-be-imminent/
Thanks so much for your sage advice over the years, and wishing you and your team a Happy New Year!

Q: As Trump’s inauguration approaches and our government falters it appears increasingly likely that the risk of tariffs is not zero. Yet Canadian markets don’t seem concerned. Do you have any guidance current Canadian equity holdings? The answer to these problems is usually to do nothing but it looks as though there is potential for serious market disruption.
Within your portfolio recommendations (my largest would be Tfii, gsy, shop, mg, byd ) do you see companies that are high risk of significant harm?

Q: Hi 5i

Please as many questions as needed.

I am heavily invested in stocks and want to raise cash, putting more money into bonds. I have about 10% in Canadian oil and gas, 5% gold stocks, and about 13% in uranium stocks. I am going to hold my gold and uranium.

What allocation would you suggest for a retiree in terms of portfolio holdings of gas and oil?

I am concerned about the possible coming tarriffs and the effect on the Canadian ecomomy. Most of my holdings are Canadian. A lot of these are in dividend stocks. I have held them through the past few years but I do need to increase the allocation to conservative investments. I plan to reduce most by about 20% or consider outright sells. I currently prefer to reduce downside risk than worry about the upside.

Can you help me decide from the viewpoint of possible tarriffs and effect on the Canadian economy which are at risk the most. Could you class these as hold, reduce or sell. I will hold all my U.S. stocks which are about 15% of my portfolio and haven't listed those here.

Thank you for your very helpful advice.

Q: Good Afternoon
Today a well known analyst predicted, in the Globe and Mail, that we could get a correction on the TSX worst than the one in 2018 when the index fell 11.64 % if Trump implements his 25% tariff.
Further, if the tariffs stay longer, a TSX loss of 35%, as we saw in 2008, is possible.
What is your reaction to these comments and what is your prediction for the TSX in 2025 ?

Q: Curious if you read Howard Marks latest "Memo" published yesterday https://www.oaktreecapital.com/insights/memo/on-bubble-watch ? He addressed issues of bubble characteristics, market concentration, market valuation and forward expectations relative to current market valuations. What is your impression of his Memo?

Thanks.

Q: Happy New Year. Could you please post Total Returns 2024 (including distributions) for the TSX, NASDAQ & S&P markets? Thanks

Q: If you were setting up your investment portfolio for 2025, what would you want as your optimal concentrations per sector?
1
All the best in 2025!

Q: What is the difference between ROE and ROIC and which should investors focus on (if not both)? For growth, what would be a favoured % range to mind? Thanks!

Q: Many are feeling the market is high. Certainly, we can't expect another year of 20% growth.

I'm interested in a strategy of maintaining those gains. Does that mean pulling money out of stocks that seem overgrown, or does it mean investing new money into areas that have not been part of the recent rise.

What sectors do you think these are? I nominate well-known companies (especially tech and giants like Costco) as overgrown even if they are good companies, and energy and small cap as part of the second group.

How does this compare with your thinking?

Q: Interview of 3 economists this month wich similar conclusions :"markets are extremely ( and historicaly) overvalued" , all anticipate some correction in January and "roller-coaster" after..No mention of sectors though ...Do you agree with this overvaluation thesis, and if this were the case ,what sectors would be less at risk ?

Q: Canada has accelerated both inflow and outflow of Foreign investments in Canada since Liberals took office. The Liberal government is abandoning ship, Canadian dollar is nosediving, and our deficit continues to spiral out of control!
Canadian stock investors like us here on 5i are taking big risks in buying Canadian stocks only to see our dollar erode, our stocks erode, and our investments erode.
I feel the only way to combat these issues outside of our control is to buy American stocks and investments as the more I invest in Canada the more Trudeau and his Liberals will find ways to screw my hard earned dollars, that are getting smaller by the day!
Your thoughts, thank you!

Q: what do you think about the commodities area right now oil and gas precious metals
and the other group of metals? do you see the stock under preforming or doing better then the tsx in general? Also what 3 areas do you see possibly out preforming the markets?

Q: Everyone, what is your biggest regret about investing? Clayton