Investment Q&A

Q: Hi,

I am reading periodic articles in financial media discussing growing consensus of financial professionals turning negative on equity markets. While I realize traditional points of balance discuss how there are two sides to a trade, etc, could you please offer your thoughts on the probability of the floor falling out from this market, and in contrast, what would be a catalyst for a next leg higher.
The ongoing layoffs in the tech sector appear to reflect demand/revenue fallout from the discretionary economy.

Q: There has been incredible volatility in the markets with indexes and stocks bouncing up and down for last 3 years making investing in stacks and bonds difficult. There has been no really true safe escape haven in equities or bonds apart of cash and money markets and recently Guaranteed income securities. Considering all these factors influencing the markets today would you venture your opinion when we could reach some market stability ?
Miroslaw

Q: I think Canada is heading for a 'soft landing' where growth remains intact, employment is decent and interest rates remain at this level for at least a year. What Canadian sectors or industries will benefit from this environment the most?

Q: Hello 5i
I have read recently that several US analysts think that the Canadian market will do better than the US this year. T Rowe Price was the most recent one in the National Post, i think. Wondering what you think of this thesis. And if you believe it, how would you organize to profit from it? I imagine the thesis has a lot to do with resources with the possible re opening of China. Is there, for instance, a good etf? Or, what stocks would you choose to create your own etf substitute?
Thanks as always for your excellent advice

Q: Could you tell me what the total return (including dividends) was on the TSX, DOW, S&P 500 & NASDAQ in 2022?

Q: I am a long-time shareholder in CGI Group (ticker: GIB.A on the TSX), a Canadian success story. Since 1996, the stock has risen some 300-fold (from 40 cents, split-adjusted, to new high this past Friday (~$122/share). One reason for the dramatic capital appreciation over the past 27 years is that, to my knowledge, CGI Group has never paid a dividend, preferring rather to buy back shares most years. I am curious, given the Canadian federal government's announcement re: taxing share buybacks (beginning in 2024, I believe), how you feel this might affect CGI share buyback policy in particular, as well as for other Canadian companies, in general.

Ted

Q: What would be the top two or three sectors in the Canadian market for new money in the coming year?

Q: Hi,
I was bit surprised by your answer to Kevin's question today about your sector preferences. You had chosen the following: XIT/XRE/XFN/XLY/XLV.

I thought given the current possible recession scenario lurking in the background and also from your own answers to others, you would have chosen XLP, soft or hard landing people need Staples to survive, XEG because of all the uncertainties, XBM/GLD as one expects demand to go up when China opens up. Plus as a hedge against the USD going down.

There must be a reason for your choice. I am curious to find what your rationale was/is.

Q: if the primary objective is to maximize return, with minimal risk, over a 5 or 10 or 15 year time frame why would you consider stock picking over index funds? Personally i do it, using a barbell approach, because I think i can beat the index in some capacity.

But if you believe the general consensus that index funds vastly outperform active funds or stock picking why should we try?

Q: Do you expect the US will raise interest rates tomorrow and if so how will the stock market likely react ?

Q: Hello 5i Team
On BNN Bloomberg today one of their guest a Banking manager mentioned that Emerging Market is in the beginning of a decade of recovery.Please give me your thoughts and does this translate in EM out performing and what percentage should one own?Please deduct the appropriate credits for these questions.
Thanks

Q: The market has rallied nicely. I have some holdings ,non dividend paying ,that i have struggled with holding on to and have come back nicely Would now be a time to review ones stock holdings,maybe raise some cash in anticipation of slight pull back or considering a pause in rate hikes, would you go all in with growth stocks?

Q: Looking for your crystal ball on who you think will underperform or outperform in 2023. Can you rank overweight underweight or neutral on overall market performance:

USA, CAN, EU, Global, Emerging Markets.

Reason I ask is I am heavily overweight USA and thinking it might be a good time to move to neutral in USA and move that cash to one of the other 4 geographic areas.

Q: Hello Peter et al:

A great question by James today and equally a great answer by you! AAPL wasn't included in James' question and hence the price targets characterized by Good price VS Great price for AAPL wasn't mentioned. I have added AAPL here.
(MSFT: 240/210; GOOG: 95/80: AMZN: 95/80.)

IF I were to request you to wear your Option trader's hat, (after all you manage a fund based on options!) how would you play these stocks. Assume that these are long term holdings and cash covered. Should one simply either buy puts or sell covered calls. Your "great" price targets roughly assume about 15% downside correction.

If indeed these solid stocks are going on sale and if one is determined to hold them for ever, why would one not make any money whilst one waits?
That's the thesis behind my question.

Many thanks in advance.

Mano

Q: Good morning 5i,
I enjoyed reading your latest market report on the potential for decreasing inflation, and am thinking of tweaking some sector realignment to capture this possibility.
I have had a good 2-3 year run with RSI but their earning do not look good so am planning on selling this. Will then redeploy funds into utilities which are underweight currently. Does this approach make sense for an income investor?

Q: Thank you for your report yesterday on month-to-month inflation, which I found very useful. Is month-to-month inflation something that you have been reporting consistently, or would you consider reporting it from now on given the focus at the moment?

Q: Hi 5i Team!

Respecting you don’t have a crystal ball and going on general wisdom that the markets like to look ahead.

How much of the full impact of rate hikes has been priced into the current market?

There is another (maybe last one?) almost certain rate hike coming for both the US and Canada, should we expect more volatility from this announcement or is for the most part already priced into the market?

Thanks for all you do!

Q: Hello Peter and Team,

We are celebrating the start of CPP and OAS this year. With that in mind we have to think about RRIF in 7 years, investments , bonds, and GIC's in our RRSP's. We also have a small TFSA for higher growth stocks. With that said, it is time to retool our investments. We have not been a fan of bonds for over 10 years though we are open to bonds now. .

Which mix of CDN/US/Foreign Bonds, GIC's, and top 10 stocks would you recommend for RRSP's if you have a clean slate with a 7 year outlook.?

Thank you so much for your service. It is the best site by far for advice, CDN portfolios, and general questions by subscribers.

Sincerely,
Debbie and Jerry

Q: I follow most of your balanced portfolio. Other names in my portfolio are ones you recommend highly.
I have 15% of portfolio in VGG, 2% google, 2% NIVDA
The rest is in Canadian equities and I am looking for advice for percentages in each sector..
4% Materials
7% Consumer Staples
6% consumer Disc
18.5% Financials
19.5 % Industrials
22.5% Tech
6% Utility
7% Energy
If you look at my percentages of Canadian equities please indicate areas I am too high in and areas I need to increase my exposure in.
I realize this question may take a little time. Please take as many question credits that are needed. Thanks for your excellent service over the years.
T Steve

Q: Hi there,

I've been reading up on the US vs International stock cycle as of late. It appears as the cycle of under and over performance tends to happen in cycles. Obviously no one can predict the future, but do you think International will outperform over the next few years considering where are are in the economic cycle, rates, valuations etc? Can I please have your thoughts?

Thanks!