Investment Q&A

Q: I'm entering retirement and won't be adding much more new capital to savings and so capital preservation is paramount as I look at drawing down phase in the next 6 months. Right now I am still heavily exposed to the markets with about 85% equity exposure. I want to increase the amount of safety but am concerned with the loss of purchasing power and feel the old 60/40 rule isn't adequate anymore. The big dilemma in today's environment is that there really aren't a lot of alternatives to stocks for keeping up with inflation, but this involves capital risk. What balance do you think is more appropriate in this environment? I'm thinking around 75/25 while trying to keep around 12-18 months of expenses in high interest savings so one doesn't have to sell into a down market.

Are you aware of products offered in the market that may provide returns of 5-8% while being "fairly" safe for the capital invested?

Any suggestions on perhaps bond funds that offer returns that will at least keep pace with inflation after fees without undue manageable risk for capital safety?

Looking for any ideas..preferred shares ETF's? (know there is still some capital risk here). Thank you for your help and input.

Q: Stan Wong on Market Call had EQRR as a top pick. I've been looking for an ETF like this. It looks like the MER is .35%. What do you think of this or do you have a different one that you could recommend for outperformance with rising interest rates? Thanks!

Q: How do we as investors gauge "capitulation" in the markets. Would you say we are getting close in certain sectors i.e. technology. Thanks for your insight.

Q: what are your top 4 picks for companies who will flourish when supply chain/labour shortage issues end. thanks Richard

Q: Hi! The tech rout continues this morning. I previously was able to trade this rotation when it happened in 2021 and they seemed quite short lived. This feels a little more permanent because of the imminent end of tapering and lift off of rates. Impossible to predict, but do you see this rotation as lasting longer than the others in 2021 and if so is it too early to start nibbling at some beaten up names like SHOP and NVEI and GSY?

Also, I'm not sure why GSY is getting thrown out lately. Good valuation with good earnings and a recession doesn't seem likely.

Thanks,
Jason

Q: I know there is not a simple/easy answer. I have some pretty good returns in my oil holdings but would like to let them run a bit more. However, between Mike McGlone of Bloomberg (very bearish on oil) and Eric Nuttall and Rafi Tamazian (very bullish) I am conflicted. How are you feeling about the price of oil over the next 6 - 12 months?

Thanks very much for your help.

Mike

Q: Every time I read David Rosenberg, I want to cash out and head for the hills. So far the market has ignored his usually bearish views.

However, his point that 80 % of the stock market growth is based on higher multiples , not higher earnings, caught my interest.
Several questions: is he correct; how far above long term mean are we ; what has caused this; how much of a correction if we revert back to long term mean ?

I am a senior and rely on my investments for a significant part of my income but haven’t pulled the trigger yet ! Thanks. Derek

Q: Which sectors might do well in 2022 and which sectors might struggle?
Thank you

Q: Hi 5i,
What is the rationale to invest in sector-specific ETFs rather than index funds? It seems like the index themselves typically perform quite well compared to ETFs unless one is looking to gain exposure in a specific sector.

Looking back to Adam's question on 06-Jan regarding 2021 performance:
S&P 500: 28.7%
TSX: 25.1%
Here I thought I was doing reasonable with my 16%...
I certainly enjoy investing and learning about specific stocks and ETFs but this difference is hard to ignore.

Thanks,
Kyle

Q: Conventional wisdom seems to be that growth stocks, esp. pricey hi-tech names, are being hit due to fears of interest rate increases. But some of these names don't seem to be directly vulnerable, with low/no debt, strong balance sheets to fund growth without borrowing, and products that wouldn't be especially vulnerable to rate increases for consumers (e.g. retail like shop or lspd). So what am I missing? Could you suggest 2 or 3 growth names that should be relatively safe, or at least bounce back quickly?

Q: Morning,
Your opinion. Will the European stock markets play catchup to the North American markets in 2022?

Q: do any of you have an opinion about what will happen if inflation continues and the government and banks refuse to raise interest rates any meaningful amount or at all ? and if this should happen , what should we be investing into ? thanks and all the best for 2022.

Q: Hello 5i!

So I am a little overweight in technology and feeling the burn a little over the last few months. I am considering re-balancing but am wondering about timing (I know, its impossible! lol)
You have commented that the Q4 is typically good for technology stocks so would you anticipate that they may see positive momentum in the next month or so? I realize you don't have a crystal ball but just based on general market patterns?

Also, what is the general window for Q4 earnings reports? ( end of Jan to end of Feb?)

Lastly, a sincere thanks for all you folks do. Your expertise, education and general good common sense have made a world of difference to the whole 5i community (and their families!).

Wishing you all a healthy and happy 2022.

Q: hello to 2022, 5iR.......and for me, back to the regular lifestyle of reading first thing in the morning, 5iR Answers to Questions. Now that it is a new year, what are your top investment predictions ........yea, a tough Question given so many uncertainties, right?!...........Tom

Q: UPST, LSPD, and NVEI are my biggest losses. The recovery is little to none. In order to recover my money over time, would I be better off selling UPST and replacing it with NVDA; selling NVEI and replacing it with TFII; selling LSPD and replacing it with ATZ? Hoping to hear from you.

Q: I know you tend to espouse wide diversity in the market and no stock greater than 5% of the portfolio, which I respect and understand, but if one were to overweight a sector (or sectors) what would you choose?

Q: I paid a lot more attention to my investment approach this year, and obviously used your service to make a lot of my decisions, slowing trying to align with the recommendations of your portfolio analysis. I currently hold 25 different stocks.

Looking back at 2021 my overall investment return was 21.41%, slightly lower than the TSX Composite Index of return of 21.74%.

I'm not unhappy with that return, obviously, but I'm wondering given my level of success if I should be simplifying my life and just moving to a few ETFs to cover appropriate geography/industries and forget about it.

This is probably a hard question for you to answer but you might have some insight.

Q: Can you list your potential biggest January bouncers, maybe 5 Canada and 5 US for aggressive investors? Thx!

Q: Everyone,
My investment strategy is rather simple, buy the best of the best stocks and wait, wait, and wait. I haven’t sold stocks in more than three years. In order to sell I wait until something fundamental have changed. Time is on my side for gains. But should I think about other trading strategies, such as puts / calls etc etc … ?

Q: What do you consider a poor, ok, good, and very good return (ranges please) for a diversified portfolio over a 5-10 year period? I want to understand the comparative performance of my portfolios, which I have been holding for 7-12 years now. My portfolios are not similar.