Investment Q&A

Q: I was wondering if you could tell me how much the Canadian markets are being impacted by zero to date trading options. According to an interview I heard on TD , the US Option Exchange is putting out options with daily expiry. Reference was made to this practice before the 2008 market crash.
I would appreciate your thoughts on this topic.

Thank you.

Q: this is a question about buying us stocks when exchange is high to make sure I understand correctly.

Buy us stock when us exchange is high; example rate of exchange 1.40 means 100 shares @ 10 cost me 1 000 x 1.4 = 1400 $ can
stock price doubles from 10 to 20, means I should have twice as much money BUT if I
Sell when us exchange is low, 1.0 means a 100 shares @ 20 gets me 2000 x 1.0 = 2000 $ can
Price per unit doubled from 10$ to 20$ but actual return to you only went up by 600$ due to exchange rate effect.

so this (presently) would be a poor time to buy us stock due to high exchange rate. CORRECT ?

the corollary to that is: the best time to buy a US stock is when the exchange rate is low or at par with american dollar. CORRECT ??

Since what matters is final amount in my pocket. should I use historical average U.S. exchange rate as a rule of thumb for when exchange is a "good" time to consider american stocks and buy when below ? example historical exchange rate is 1.2 and buy when 1.1

what are historical average U.S. exchange rates over many decades ??

thanks

Ernie

Q: Hello Peter,
I know you may not provide 100 percent guarantee on this answer but am now getting worried. I am not very impressed at our investment managers (when reading news papers or watching BNN) as it seems not many are doing proper research.. For example, AQN was a go to stock but all of a sudden with bad results, everyone is bailing out.. it was obvious that with high rates, utilities would be hit ; why is this a big surprise now and most managers are bailing out.. xbc wow what a stock to buy ; all of a sudden it is bankrupt.. With BAM and BN, BIP, i am not worried about the stock price. I think the leadership is smart but i am worried about potential accounting issues. I know you have said that the issue has been brought up before, but in your opinion, is it something to be concerned about in terms of reducing 5 percent weights. I would hate the shoe to drop again.. if you owned the companies in Brookfield, would you be worried about accounting issues? Since you are not pushing the stock purchases, i am thinking your answer is more objective.. Please advise.

Q: Retired dividend-income investor. Is this how you spell "capitulation? The VIX is still pretty low...not even at 30 yet, let alone 40.

Thoughts?

Just sittin' here on my hands for the most part...doing a tiny bit of buying.

Q: A short while back there was a 5i comment that you thought there was a good chance that small cap stocks would rally early in the new year. Wondered why you thought that? At the moment there appears to be a great deal of fear and pessimism in the markets . Many good companies are getting pounded. And technical charts are pointing downward. So , within this environment where it is hard to resist not selling everything and moving to the sidelines, what reason is there for small caps to rebound?

Q: Bonds / fixed income are down substantially
Do you see a recovery in their values in 2023 and can you support your view
Thanks

Q: I thought CPI was the root of all the evil afflicting this market and to me this was confirmed Nov 10 and 11 when the market rocketed upward apparently based on not a bad Oct cpi. Then we get an even lower cpi for Nov (on Dec 13) but then followed by 2 days of fairly hard down markets. What is your take on this? I know the rate hike and fed comments were in there too but to me they were all pretty much in the expected range. And it's not like talk of a recession is news. Thank you.

Q: So where is that market report/Dec. 13 available on your website to read that the other member/Iulian praised so much?

Q: Commodity prices are not in fear of inflation Normally they would plunge as they have in the past.
When rates are high,there's a tendency to refuse to lend interbank ,which is one factor which tends to lead to a recession. But refinancing mortgage s or corporate debt at higher rates is normal. Commodity prices and interest rates are not the issue this time around, so would labour costs and corporate profit margins be more to blame for our inflation problem?.if so, how do you control these issues?

Q: Hi Peter,

After the fed outlook for the economy and the fed rate 2023 what is your opinion of a near term price movement of TLT? Do you think the fed was setting the expectation of a hard landing / recession without acknowledging that the fed rate is restrictive enough already?
Regards
Rajiv

Q: Greetings: On a few occasions, I can remember in an answer to a question it was stated that it is best if possible to avoid trading when the market first opens and 30 minutes before closing. Recently, it was stated that a lot of institutional and algorithmic trading is done in these time frames. Wouldn't that provide me with more liquidity, and in turn possible better purchase and sale prices? I cannot find the specific questions and answers, so if I am quoting you incorrectly, please excuse me. Please enlighten me on this subject. Also, could I get a link to Eric Nuttall's appearance on the money show on Dec 1. Thank you. BEN.

Q: Please explain "the Santa Claus Rally" and the period of time it generally occurs.

Q: I am wondering about my cash position. Given so many things affecting investor confidence how long do you expect to maintain the cash levels in each of the three model portfolios? What might cause you to make changes?

Thank you,

Mike

Q: Can you give me the symbols of ETF's that matches the movement of the tsx 60 , SP 500 and the NASDAQ. With the lower mer or fees. Thanks .. Borrowing money to invest on the stock market was something that was getting very popular. With interest rates now at normal rates in my view I believe this will end. Our economist drop the key interest rate at the beginning of covid to reduce the risk of a recession. In 2022 these same people are raising the interest rates to prevent inflation. I believe they will not succeed. I wish I had a company that could right out checks and not needing any funds to pay them. Only or government can do this.The same people that are raising and lowering or interest rates. Imagine that. Thanks for the great service but with 122 credit questions I guess I'm not using your services to the max. You guys are great happy new year.

Q: The Bank of Canada hiked their policy rate 50 bp's today - will this be priced in to Fixed Income instruments (GIC's/Bonds/TBills etc) immediately or would it have already been priced in in anticipation.
Thanks

Q: If only one was to be added to right now which would you pick? I have both at at a higher cost. Are you expecting a bounce in January? Thanks.

Q: Is the current inverted yield curve predicting a recession in the next 6 months? Regards, Ron

Q: Retired, dividend-income investor. I harvested some ZRE related tax losses in my Cash account in October. I am now rebuilding a position in my wife's TFSA. I was planning on 3 tranches, every second month (using your suggested "spread out your investments over a 6 month period). I bought my first wave a week ago.

Now that Chairman Powell has made his recent remarks about the potential slowdown in the rate of interest rate increases, does this change your thoughts about the pace of investing new monies into the market? Would you endorse accelerating the injection of new $$$....specifically for ZRE?

Thanks...Steve

Q: The first ones to forecast next year results are Goldman Sacks and they are pretty bearish on the stock market. They forecast the S&P to finish the year at 4000 after picking up steam in H2 while the first half should be down while traders will adjust their premiums with no gain in profits next year. Do you agree with their thesis? Where do you see the better overweight. In US with blue chips or smb ? Canada with oil and basic material? Look for dividend to try to make some yield? Please elaborate on your rational. Thanks a million$$$

Yves

Q: I am wondering what your thoughts are on annuities for a retiree, assuming no need to leave wealth on passing. Also assuming two scenarios: (1) putting all one's money in annuities, and (2) a small portion to ensure not ending up homeless while investing the rest in high risk growth stocks. Okay let's add a third one, a well balanced portfolio all in equities a little light though on dividends, with a floor protection of annuities. Talking about a straight life annuity, nothing fancy. Thank you.