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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.

Q: Could you explain why banks are not doing phenomenally well given the interest rate increases?

I understand that it may lead to fewer loans and some defaulted loans, but surely floating-rate loans and the higher interest of new loans would far out-profit these.

On that note, would you recommend locking in a floating rate mortgage at this point?
Read Answer Asked by Kevin on March 13, 2023
Q: Peter; Do you think Powell would dare to do a 50bp hike in the face of the SVB debacle- could this actually be a silver lining for him ? Thanks
Rod
Read Answer Asked by Rodney on March 13, 2023
Q: Dear 5i team.

Here we go again with the annual US debt ceiling shenanigans.
This time seems to be a little different as the level of crazy appears to have ramped up in the US political sphere.

May I ask for your collective professional views on what your crystal ball says the possible initial market reaction (bond/equity) might look like assuming they DO NOT come to agreement in time, this time around?
Is there a preferred position on Bonds you would suggest if such a scenerio materialized?

Look forward to hearing your views on this.
Read Answer Asked by Arthur on March 13, 2023
Q: Hi Team,
So...first the crypto banks start to fall. Now SVB bank looks to be collapsing, I have heard due to the impact of rapidly increased interest rates. What happened here? Should we be worried about a domino effect here similar to 2008? (hope not!) I typically thought high rates are "good" for banks...to the point where the economy starts to come to a standstill that is. Thanks for the insight.

shane.
Read Answer Asked by Shane on March 10, 2023
Q: Peter; Is there a way to track the US dollar ? Thanks
Rod
Read Answer Asked by Rodney on March 07, 2023
Q: Greetings, 5i Research,

Thank you for your authoritative answers to my previous questions.

Outside my tax-advantaged accounts, I plan to sell just-in-the-money, cash-secured puts on SPY on Mondays, expiry dates on Fridays of the same week. I expect to be assigned half the time. When assigned, I will own SPY, which will allow me to sell just out-of-the-money covered calls on the security. I will repeat the process when assigned, and sell just-in-the-money, cash-secured puts again.

My question is what are the risks of this approach?

Thank you.

Milan
Read Answer Asked by Milan on March 06, 2023
Q: In general, do publicly traded companies suffer as steeply as consumers when interest rates are high? Does their debt level directly amplify that pain or do they hedge with loans at fixed rates, use preferred shares to fund large expenditures, and the like? Are there sectors or specific companies that are truly strained by interest rates?

Separately, my mental model is that when oil is in high demand the CAD should be relatively strong against the USD. I hate converting at $1.40 per greenback. Yikes. Are there obvious factors that suggest the CAD should strengthen, stay the same, or weaker further?

Many thanks,
Read Answer Asked by Marilou on March 06, 2023
Q: A recent guest on Market Call stated that while we have been in a dis-inflationary cycle for decades, we are now in a re-inflationary period which could go on for a long time. This means interest rates continuing to rise in steps over perhaps several years. First, could you comment on this view. I would like to hear your ideas about the direction of near term interest rates, as well as long term. I know that this is a predictive type of question but I highly value your opinions. Secondly if we are indeed in for a long stretch of gradually rising interest rates could this possibly mean a long term decline of growth stocks, or at least the ones that are not yet profitable. Thank you.
Read Answer Asked by Rob on March 03, 2023
Q: Good afternoon folks
I listed to Robert Kessler on Consuella Mack show called Wealth Track on Sunday. He is very convinced that we all should get out of stocks and go into US LADDERED TREASURIES. He feels the market will be very bad for 15 years or so. What is your take on his view?
Thank you all for your guidance through the good times and the turbulence. I've been with you for almost 9 years now and highly recommend you.
Read Answer Asked by El-ann on March 01, 2023
Q: What do you make of the thesis that the next decade will not belong to tech stocks but instead to commodities? I have always avoided commodities, believing the the cure for high prices is high prices (lithium for a recent example). Once interest rates start getting cut, won’t we just be back to tech stocks looking like the best area for growth again?
Read Answer Asked by Michael on March 01, 2023
Q: Everyone, what has you gleaned from the quarterly report so far this year. Clayton
Read Answer Asked by Clayton on February 28, 2023
Q: Hi 5i, can we have your thoughts on this mornings inflation numbers out of the US?

Thx.
Read Answer Asked by Christopher on February 28, 2023
Q: If you were very concerned about the economy (think 1920's) and especially the Canadian economy (Liberal endless spending); and had sufficient income from real estate and private investments to fund your life style until the end of ones life, would it make sense to convert ones stock portfolio to something like PSU.U? I have done very well on my stock portfolios over the past decade, except for past 15 months. I am concerned that there are many factors that North American public corporations have to deal with and that profit are being pushed aside to meet their corporate goals.
Read Answer Asked by stephen on February 27, 2023
Q: Hi Guys
will the default level not go through the roof on all these Corporate Bonds in the next few years when they have to re issue debt at much higher levels ? and wont a recession really contribute to high bankruptcies.
What kind of a correction in this ETF can we expect, something along the lines of 30 %, Algonquin Power was sure hit hard with higher floating rates.
Thanks Gord
Read Answer Asked by Gordon on February 27, 2023
Q: With rising intrest rate banks should earn more but why Bank stocks are under performing?
Which sector should benefit from higher intrest rate?
Read Answer Asked by Nizar on February 23, 2023
Q: Hi

Is it time to lighten up on the following and look at growth stock..

In our RRSP we have

LIFE at 5% of the RRSP (still not underwater)
XYLD at 9% of the RRSP
ZWU at 5% of the RRSP

Like the dividend but two holdings are are dropping in valve.

Thank you

Mike
Read Answer Asked by Mike on February 22, 2023
Q: I'm hoping you may answer this question even though I'm out of points as the Q@A may be of general interest to readers! May I please have your thoughts on the latest inflation stats? I realize it's hard to say, but do you see a light at the end of the tunnel? I keep reading about Michael Burry's dire prognostications and am concerned. It seems though that there is a mixed bag of opinions - for everyone like Tom Lee saying things will start looking up, there are others who say we are in for a mutli year inflationary period. Thank you,

Jason
Read Answer Asked by Jason on February 15, 2023
Q: Hi all , my question is when should you add more shares to your portfolio holdings if you plan to hold the stocks you have for a few years. Is there a good time during the year when to add , is it after good company results or when a company goes up or down a certain % , or just keep a % weighing and never add to it .
Thanks,
Read Answer Asked by Costa on February 15, 2023
Q: Hello 5i,
In the "Managing your Prtfolio" section of the Portfolio Analysis it is mentioned that a sector should be no more than 20%, yet I am warned tht I am near 20% in an industry. What is the reason for the difference? Could it be that the industries make up a sector and here are diffeent values for industries than for sectors?
Thank you
Stanley
Read Answer Asked by STANLEY on February 13, 2023
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