Investment Q&A

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

Q: I noticed an interesting thing the other day, with the CPI announcement in the US causing a sudden severe tech market downdraft. Tech stocks such as Amazon went down about 6% and have stayed there. Smaller Canadian tech stocks didn't however. I hold both Converge and Topicus and they are both trading higher than they were two or three days ago. Does this decoupling mean that smaller Canadian tech stocks may have bottomed? Ie. all of the weak shareholders have been flushed out and mostly long term holders now hold the shares?

Q: Hello 5i, What sectors would you be looking to invest in and in what countries? This is for long term with a buy and hold strategy? Thanks

Q: Hi Peter,

Over the next five to ten years, what is your expectation from a risk-return prospective for the following asset classes? Please provide your ranking with a brief explanation for your rationale.

Annualized returns for the past ten years are noted below as per BlackRock:

U.S. equities – 13%
Canadian equities – 8%
Infrastructure – 7.3%
Japan equities – 6.6%
REITs – 6.1%
European equities – 5.3%
China equities – 4.9%
High yield bonds – 3.4%
Emerging Market equities – 3.3%


Thanks George

Q: Hi,

Can you give 5 small and midcap stocks US and Canadian that fits the category "that have purely domestic revenues and don't have to worry about recessions" as mentioned in your article in National post.

Thanks.

Q: The headline from the Globe and Mail, after the stock market closed on the 13th of this month - Surprise jump in U.S. inflation sends stock markets tumbling, and this - Dow sees worst one-day selloff in more than two years as fears of another large Fed rate hike rise. For me, dipped my toe into the turbulent waters and added to existing positions, well, somewhat. Now I'm wondering  - what the rest of the week will be like. and even for the next week??? Your observations from past experience would be much appreciated....and ready me with some insights about what to expect and also ready myself about what to do next..........Much thanks........Tom

Q: Hello 5i. Can you explain some market psychology. First of all who is buying shares that are being sold in this market downturn. How can the markets get spooked one day and fall 5% and yet climb 2-3% next day. Its been known for a while that the fed will be raising rates to tame inflation and yet the market reacts as if this is a surprise. Very confusing market. What would be a few indicators that we have reached a bottom in this bear market and are back in a bull market?

Q: Hi Peter, Ryan, and Team,

If we can trade with zero commission, and were just starting out with a TFSA, which of the following two options would you recommend, and why?

1. The Canadian Money Saver Model ETF Portfolio
2. The ten stocks in the "Beating the TSX" as described in https://dividendstrategy.ca/btsx-portfolio/, and has also been featured in the Canadian Money Saver from time to time.

Thanks as always for your pertinent advice.