Investment Q&A

Q: Hello, Most Banks and Utilities got hammered today mercilessly and stocks in these sectors made new 52 weeks Lows. Any specific reasons, in your view ? Energy has held very well and Tech sector appears to have found a bit of a ground. Treasury/Bond yields seems to have resumed their upwards trend after a brief 2/3 days pause. Many Experts (5i included) have indicated that there was a lot to feel good about in the two days of market rally, including strong market breath, the VIX topping at 34, on Friday etc. Do you think, it's not All Clear yet and market could test new lows ? Thank You

Q: General question: About how far forward does the market look. Per another question asking whether we are nearing the bottom (I know no one can accurately predict it). Looking out to mid 2023, I see a recession and lower corporate earnings. Looking to late 2023 and into 2024 I think we may be in a more robust corporate environment if Central Bank mandates start working.
So, if the market looks out approx 6 mths, we may be seeing more downside. If the market looks beyond and see's better days, maybe we are nearing the lows...?
Your thoughts, thanks!

Q: Hello 5i Team
Thank you for the ongoing guidance .My question is about the last two days rally, do you see it as longer term rally or will it be short lived?
Thanks

Q: In the next two quarters, earnings will likely deteriorate in both the US and Canada as the effects of the fastest rate hikes in history start to apply. If these earnings seasons are ugly, will the market decline further? Or is the positioning of the fed (potentially pivoting/easing/stopping rate rises) more important than this?

Q: Hi there,

I am sitting on about 35% cash currently that I accumulated in mid August before the indexes rolled over (SPX ~4200). Obviously no one knows where the bottom is, but if you had to make an educated guess, where do you think the SPX will bottom out and when? What strategic would you use to deploy cash? Would you DCA over a couple tranches?

Thanks!

Q: With tax selling season coming though a lot of selling have already happened. This also coincides with the FED's next Interest rate change, November seems gathering a lot of dark clouds. It just feels that the rest of the year is wasted and preventing a Santa Claus rally not much will happen from now to the end of the year.

What do you think? How do you see the rest of the year unfolding?

Thanks for your precious advise in these dangerous times.

Yves

Q: Hi, what to you think of Volkswagen here? If I understand they used the recent Porsche IPO to raise funds to invest in the EV space - they are gunning to be the lead EV provider in Europe and compete with Tesla. But with recession looming near future looks bleak for expensive cars. Do you like VW for a focus on EV longer term over others? If so, would you hold off for awhile or is there a lot of negative baked in the current price?

Q: With brisk FED tightening creating havoc in global currency and bond markets, do you see a slowdown in QT and/or rate increases? While delivering a muted effect on inflation itself, FED actions seem poised to tip off other crises in the world's financial system....is BNS at particular risk because of their emerging market exposure?

Q: If Russia drops a nuclear bomb in Ukrainian territory ( a scenario becoming more likely every day ), the question of whether a company’s stock has a compelling P/E ratio is irrelevant.

Forget inflation, forget Covid, forget Trump, forget budget deficits, forget supply chain. Follow Russia/ Ukraine.

Please help me to decide not to sell everything, stock up on cans of beans and head for the hills.

Thanks
Derek

Q: I see a lot of questions about tax loss selling with the intent to re-buy after 30 days, and I've never utilized this before. I have approx 250k in an unregistered account across 15 companies, and I'm obviously down on many of them (a lot of tech). Is it okay to not try and take advantage of tax loss selling in this way, given that I'm planning to hold many of these name for at least the next 3+ yrs, and potentially much longer (like 5-10+)? I will be continuing to add to my unregistered account (since I've maxed rrsp and tfsa), and hope to become an increasingly savvy investor, but I'm a bit scared of screwing up tax loss selling to this end, especially at this time with the current volatility. So, would you recommend that this is something I must add to my "arsenal", or just ignore it for now? Are there many successful investors that stay away from the sell then re-buy in 30 days approach all together? Thanks!

Q: A recent story on CTV news had the following:

I don't think that we're in a recession just yet, but I do think that one is on the horizon," David Doyle, the head of economics at Macquarie Group, told BNN Bloomberg. "Our baseline is that Canada will enter a recession in the first quarter of 2023.

Macquarie Group, an Australia-based global financial services provider, estimates Canada will face an approximately three per cent contraction in gross domestic product (GDP) and a five per cent rise in its unemployment rate during the predicted recession.

We actually think it will be pretty severe in Canada," Doyle said. "I think the die has been cast on this front. Because inflation has become so elevated, and unemployment was allowed to fall so low, I think a recession is almost inevitable at this point.

1. Do you agree or disagree, and why?
2. And if there is a chance of a "pretty severe" Q1 2023 recession in Canada, how would you position your equity investments? Go to cash? Go to certain sectors? go to the USA?

thank you for your excellent service.

Q: Do you concur with David Rosenberg's comments in the FP today stating that inflation is not our current problem but rather a lack of liquidity and forced sales of quality assets?

Carl

Q: What happens to the market if nuclear weapons are used in Ukraine.

Q: Morning 5i team,
The Canadian dollar is down about 10% over the past year.
Does it make sense to convert Canadian to US dollars to purchase US securities at this time? The securities may have to increase 15 to 20% just to make up the exchange rate.

Thanks for your opinion

Joe

Q: Everyone, stocks go up and stocks go down. Own the best and wait for the dust to settle either way. I have been through the tech crash, a few financial crashes, the COVID crash and now we are going through the Putin war crash. I have also been there during the market rallies. Stuff happens and believe that holding for a long time is better than picking the right day or days to invest in the market - time in market beats timing the market every time. Take care and see you on the other side. Clayton

Q: Hi Team,
This is more of a general question/ observation of todays price action. On a very negative day yet again, across all major index's where it seemed almost everything is down, some of my worst performers which I thought would be down even more yet were actually positive on the day. In specific (RBLX,SHOP,SQ,TOI (almost NVDA...was positive for a while). Anyways, should we read much into this? Is this a sign that some of these beat down names may actually be flirting with bottom? Or is is just wild trading and a one off perhaps? Your thoughts would be appreciated. Thanks

Shane.

Q: Hi 5i, looks like markets are going to take out June lows. With all the talking heads talking about more pain to come, what does your gut tell you?

Thx again for all your advice.

Q: Everyone, Now that the fed has raised rates, what do you see the market doing the the next year. Clayton

Q: I'm perplexed by these "defensive" stocks. Both are breaking down with the market. Shouldn't food and insurance companies fare better? They haven't and now I wonder when the market turns if growth companies will fare better and lead the market higher (eventually). So what's in store for these companies going forward? Throw in the towel and put into growth companies?

Q: Nouriel Roubini (Dr. Doom) is forecasting a hard landing for a 2% inflation target rate with the S&P being off by as much as 40% and referred to the levels of debts of corporations and governments.

Even half that is nerve racking. Can you please give your thoughts and opinion on the matter?

Carl