Investment Q&A

Q: Oh gosh, Keith Richards for the last 2 months in the Money Saver is raising red flags about the market.....comparing where the market is now to pass markets that have plunged downwards, like big time. And there is news out of China, the yuan falling and economy slowing down, like big time, too This makes me wonder, seriously about doing this --- should I sell all or most of the stocks held in the TFSA and LIRA accounts as there would be no tax to pay.....but hold on the those in the trade accounts What are 5iR's take of the stock market going forward and my pondering about selling??? .........Thanks for your insights.........Tom

Q: I hold VOT at a loss (not useable for tax). Many analysts are declaring they are now out-of-love with growth. Do you agree that growth will, generally speaking, struggle through ~2025? Is this a good time to sell and transfer affections to Value shares— for example switch to VTV? VTV has outpaced VOT over 5, 3 and one year(s).

When I make such switches, I often find the security I sold significantly outperforms the one I lavished love on. With my errors in mind, I ask for your thoughts on growth vs. value over the next year or so. Please add a bit of your valuable commentary— that would be very helpful.

Q: For a retirement objective + dividend investing, could you rank these sectors for more safety and stability in periods of economic uncertainities or slowdown : financial services,energy,healthcare,technology,utilities,communication services,consumer cyclical,consumer defensive,industrial,real estate.I guess that some sectors are more esssential than others ?

Q: In today's Globe and Mail article, David Rosenberg argues that stocks are overpriced and concludes that "bond yields and equity prices need to adjust lower in coming months, quarters, and maybe even years. This means asset allocators should be taking profits in the overpriced equity market and placing the proceeds in oversold Treasury notes and bonds."
Do you agree with this view?

I will appreciate your insight with respect to changing our asset mix based on Rosenberg's views.

Q: I've been expecting utilities-and-telecoms to see better price action on the prospect of stable rates, but today's reversal suggests a continuing downtrend. Likewise, I've been expecting financials to continue to look past these same fears (and there has been progress), but now wonder if we've reached a plateau.

Given that these sectors 'should' be responsive to different forces, which would you pick for a quicker and more robust upturn? More specifically, should we expect utilities to continue to suffer until rates actually go down by some significant percentage?

Q: Considering the cyclicality and unpredictability of oil prices, government intervention, etc., what % if any of a portfolio would you suggest exposure to this sector? While I’ve been able to make $ here it’s always been a struggle to trade more than invest (other than pipelines) this siren which calls me to the rocks. Thanks.

Q: I hold some TLT and have obviously entered into too early. But I am prepared to be patient.
My question is more about the Billionaire Ackman article last week where he states he is shorting the 30 year treasuries. Now, is he doing that simply because he feels the it will be a long time before the Feds actually start lowering rates or, is there something else out there that I do not understand about long treasuries?

Q: Hi Team,
Shop is falling again today despite earnings beats and price target increases across the board. Is it a good time to buy the shares from todays profit takers? Also in general do you see this market sell off sparked by the fitch downgrade of the US credit rating a buying opp? There has been some brutal sell offs over the last 2 days. Which names would you be looking to buy in this weakness? Thanks

Shane

Q: Hi,

This is a BIG picture question. I don't see any questions so far on 5i.

First Japan apparently makes an about turn in their interest rates? The articles that I read went above my head! And now Fitch downgrades the US credit rating. Again too much for me to understand.

What does it all mean to ordinary people like me? Many of my friends who are all seniors mostly say, cash is King!

I know you like to be fully invested.

Any words of wisdom?
Many thanks in advance.

Mano.

Q: Lost returns from listening to esteemed, perennial doomsayers. Includes David Rosenberg.

https://ritholtz.com/2023/08/10-wednesday-am-reads-341/

Q: Everyone, where will the market go once the DOW breaks above the previous high and when will it break above the previous high? Clayton

Q: Hi Peter,

In a long-term account (20+ years), could you please describe what asset allocation you would choose (including %)? Would you stick to stocks and bonds and gold, or are there any other asset classes you'd want exposure to?

Thanks as always!

Q: I am working with my son (age under 50) to help him put together a stock portfolio. Considering that the US and Canadian markets have significantly different sector weightings what would you recommend for reasonable diversification in a growth weighted portfolio? I thought you had dealt with this type of question a number of times before but haven't found previous responses.
Thanks, Hugh

Q: For over 12 months ending June the number of TSX 52 week lows exceeded the 52 week highs.
I notice that all 3 business days this week the number of 52 week highs have have exceeded the 52 week lows
In your opinion could this be a further sign that the TSX is entering a bull market phase.?

Q: Peter; The perennial “ bear”, aka Rosenberg, basically just trashed the BOC last rate bump, saying the 2% level , they want is there. Could you comment on whether you agree or don’t and why ? Thanks.
Rod (;Publish if you wish) .

Q: My portfolio is recovering well, but still down about 5% down from its high because of the small caps that I own. They are all cheap and profitable companies, but some are still down 50%. If we go into recession will they crash? How should I deal with these companies? Should I be taking losses now to protect from future losses? I just don't understand the market right now because usually small caps are the first to recover. My original plan was to sell 1/2 after they recovered but that isn't happening.

Q: The S&P is now 25% above the low of October. Based on the statistics from previous recoveries ( you had an interesting report on these, which I can't find) where are we (likely) now? Near top of recovery phase or with significant room to run?? Thanks Jim

Q: 10:31 AM 7/11/2023
We would appreciate Peter's opinion because we are concerned about the litany of advice we hear against large portfolio concentrations in individual stocks or sectors because we are repeatedly told this is bad.

But in your answer to Angelo's question on the 7 giant US technology companies on June 23rd 23 you said "some investors like concentration. In fact, done right, concentration is one of the better ways to increase wealth. But for a general investor, we would suggest a cap of about 30% here.

5i seem to be content with 15% in the Brookfields

June 22nd to James you said "We typically get nervous as our [individual] weightings approach 10% and caution against a 'one stock' portfolio".

In our own portfolios of Canadian stocks, as long term forever holders would not the same logic apply to hold a 30% or more weighting in the 5 big Canadian Banks through all the ups and downs of the markets, for steady dividend income with some growth?

One family member has comfortably held RY since 1968 and 10 shares bought 55 years ago have grown to 326 shares today through 4 stock splits and dividend reinvestment when available, and never regretted or worried about it.

The same logic must surely apply to holding other large sector positions: 15% in 3 Pipelines, 35% in 7 Utilities, and 2 Telecoms.

I know most Brokers and Advisors like to advocate "diversification" and "trimming" and switching to "hot" sectors but it seems to me that much of these strategies are designed, even with the best of intentions, to just encourage trading and switching to generate fees.

So Peter's best advice please - in the end how bad is it to just hold a concentrated Canadian Blue Chip portfolio in Financials, Pipelines, Utilities, and Telecoms with a small 15% scattering in some other sectors? This way we have few worries, no foreign currency risk, miss the thrilling scary ups and the frightening crashes [like Nortel and Concordia], but sleep at night.

Thank you............ Paul W. K.

Q: All three stocks have been setting higher highs and higher lows since mid April. Have you heard any news on why these three stocks are having a positive uptrend recently? All three have crossed the 50 and 200 day moving averages. Clayton

Q: Hi 5iResearch Team,

My question is general. Recently I came across an article on Bond-reform proposal by Federal Government. In which it was mentioned by a group of institutional investors that this means higher interest rates for companies, provincial governments and other bodies that issue bonds. If that is right then will not mortgage cost for the home owners will go up?

I will appreciate if you could give some info on this money lending cycle.
 
Thanks

Piyush