Investment Q&A

Q: Hi, are you willing to comment on a macro issue of the economy? I am perplexed by the housing market where volume of sales and prices seem to be hitting highs in some Canadian urban centers (not Alberta). Lumber companies are doing well. The long term Covid impact on the economy and jobs seems murky at best. Why is there so much confidence in the Canadian housing market? Due to historically low interest rates and some pent up demand? Federal policies designed to prop up the economy? I keep thinking this is all going to end badly if the jobs aren’t there to pay those mortgages. Appreciate your service. You may post this question publicly if you feel it’s Of general interest.

Q: I have been following a gradual dollar-cost averaging type approach to adding cash into the markets over the past several months.
With the US presidential election coming in the fall and a possibility of substantial political volatility there, would you advise deviating from this general approach? ie, is there a substantial chance of this event causing a market drop, that would merit changing a market approach?
Are there specific events that you are watching for that may act as triggers for coming market movements? The one that is holding my attention is Trump's overtures that he may not cede power if he loses, or if the election decision is unclear.

Thanks for your valued input,

Peter

Q: Hello,

I know they don't ring a bell at the bottom (or the top), but I am wondering whether any of the airlines, hotels, cruise lines or restaurants seem compelling right here. Not really the restaurants that are Covid beneficiaries like the pizza joints or Chipotle, more than the ones that have yet to recover. I am very concerned that with more gov't money being plowed into these industries the pre-restructuring shareholders would be wiped out. Thanks.

Q: Peter and team
I unfortunately jumped (like many others) part way down the crash in March.
I simply cannot believe another correction is not coming.
What do you recommend as a safe place to park cash and earn at least a bit of interest other than a GIC while waiting.
Also I know you don't have a crystal ball, but what are your thoughts on a correction ahead.
Thanks
Phil

Q: What's your opinion on this one? What does the future hold? Got a double and wondering if I should take some profits but still is not an over-weight position. The WE publicity that our finance minister is certainly not helping the the stock. Your pragmatic opinions are so appreciated. Thanks Ron

Q: Hi i5,

According to "Buffett Indicator", when it's in the 70% to 80% range, it is time to throw cash at the market. When it moves above 100%, it's time to lean toward risk-off. Now Market Cap to GDP Ration > 100% means stocks in bubble territory. Do you think Canadian stocks may also in bubble territory? If US in bear market, do you think the above Canadian stocks which I am holding can be survived? Perhaps, should we start to off load which may be in danger during the bear market into cash, or switch among balance or income portfolio. Any suggestion?

Q: Which 5 Canadian and US companies would 5i want to be holding when we get a significant market moving vaccine/treatment announcement? Tech and gold have been powerful during the pandemic but I want to make sure I am considering the right companies to add to provide balance if tech pauses and different sectors are needed for a leg higher. Your favs in each market and how/why you see them reacting to the announcement. Multiple credits are assumed.

Q: I'd like to get your take on a piece in the Globe and Mail yesterday by Scott Barlow related to the Canadian dollar. It's position is that on top of a large rise the loonie has already experienced, we can expect it to go much higher compared to the US$. This obviously doesn't bode well for those with investments in US dollar accounts so I wonder if you think it might be better to shift some of it back to Canada, perhaps into hedged ETFs with US holdings like XMH or VSP.
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-the-strongest-force-behind-the-market-rally-could-push-loonie-much/#comments

Q: Good morning 5i,
I appreciated your recent article, as usual. I find them helpful to understand what is going on in the investing world. You mention that the fang stocks comprise most of the gains over the past few months and that much of the market hasn't kept up. Some people are talking about a rotation out of technology into I suppose, more value oriented stocks. I don't know if this thesis is true. The Fangs seem to keep going up. But, do you think it might be a time to start a switch for a cautious investor? If so, would rsp , an equal weight US market etf, and brk, probably the definition of value, be a good way to approach this change
thanks

Q: Are there any sectors which are interesting from an evaluation point of view which should be added to nowadays? Are there any geographical areas which are in the same situation? Both are for longer term of 5+ years.

Thanks, Mike

Q: Watched Jeffery Gundlach being interviewed by Daniel Martino Booth, his credentials are very impressive, I have always liked to listen to his view of the Worlds Financial System.
According to him the Fed will take drastic measures in Drastic times. example being they have already done so by violating the Federal Reserve Act, with their purchases of Corporate Bonds, Stock purchases will probably come next.
I was confused by his biggest fear that the FED might declare their Liabilities as " Legal Tender"...... could you explain what he means by that Statement. I assumed that their Liabilities where already Legal Tender in the fact that their liabilities are backed by the Tax Payers of America, or did he simply mean he is fearful of the Fed just printing 7 trillion and wiping away all the debt.
thanks Gord

Q: How would you generally describe the second quarter results from the companies in the Canada and the United States markets.
Clayton

Q: Where do you see the market going by the end of the year?
Clayton

Q: Am heavily invested in USD titles/ US Treasuries,
reasons for CAD rise vs USD
any long term trends detectable,
ie when Gold rises USD sinks, true, some forecast gold at near 3000 USD??????
Art

Q: Would the Three Gorges Dam failure be as cataclysmic to the markets and supply chain(s) as the rumblings I am hearing?

If so, would such a threat be worth hedging against? ie., reducing equities now, taking profits, etc?

Q: Do you figure there's much to this weakening USD trend or it's likely a short term fad?

Q: There has been a lot of talk about inflation recently.
A lot of people will typically flock to gold, but if the currencies devalue, won't all assets appreciate in price, including real estate and stock? My question is - what is likely to appreciate faster: gold, real estate, or stocks?

Q: Hello 5i,
Back in 2008/09 the Fed and Central banks around the world flooded the system with liquidity to avoid a meltdown. I remember hearing MANY pundits warning of runaway inflation as a result of these moves. Fast forward to now and I'm starting to hear much the same.
In your opinion, is it likely to be different this time? Will we get runaway inflation? Or will it be more like 2010-2019 with muted inflation at best?
Thanks for your insight!!
Dave

Q: I'm thinking the current time might be an opportunity to crystallize any significant capital gains ahead of situational uncertainty later this year and early in 2021. The deepening fiscal hole suggests to me that the government will be getting increasingly desperate, such that an increase in the capital gains inclusion rate (already signaled) and perhaps a TFSA contribution rate reduction might be in the cards (remembering the near halving of that rate immediately after the 2015 election of the Trudeau government). Also, the NDP evidently considers that virtually any preferential treatment of any kind of investment income is an affront to their concept of taxation "fairness", and their support will continue to be essential for the Trudeau government. Thanks for any thoughts you might have on this.

Q: Do you believe the cyclic trade is back for real and if so, can you recommend 3 stocks Each in the US and Canada? Thanks!