Investment Q&A

Q: In view of the severity of the selloff, would you accelerate buying stocks in this market or spread the over 6 months or more ?

Any indication what the new multiple looks like for the US and CDA markets vs foward earnings. I suppose it s anyone's guess but I thouht you might have interesting comments. Thank you!

Q: Hello,

I am wondering what your thoughts are on the eventual recovery? We won’t know 100% until the virus plays out further but best guess, what do you think a recovery will look like?

My thoughts are that once the virus is under control we may see a quick turnaround in the equities market due to the economies ramping back up, but I am concerned that if this virus continues to provide more questions then answers we may be stuck in a longer downturn.

Keeping the recovery in mind, what are your thoughts on picking away at a Russell 2000 position over the next few weeks/months and what effect will a rising loonie (if Russia and SA work through this spat) have on the dollar hedging. Is it best to buy the Canadian version or the US version with this drop in the loonie and hopefully the eventual recovery in it.

TIA

Q: I have these 3 ETFs in my RRSP for fixed income exposure. I am strongly considering selling CBO and CLF, down approximately 3% each, to raise funds to buy stocks that are, in my opinion, getting to really attractive valuations today. I'll keep XHY because it is down a bit more (11%) and will likely recover as things improve. Is this an acceptable strategy in times like these. 25+ years until retirement.

Thanks,
Jason

Q: Hi Peter. I own ZWH.U which is down about 26%. I had thought that the covered call strategy would have provided some shelter from the downdraft, but it appears that really isn't the case. Oh well. My question relates to going forward. Since the covered call strategy will likely limit future gains, what ETF would you suggest for ZWH.U's replacement in my US accounts? thanks, J

Q: Peter and team
I sold off all my equities part way through this recent collapse.
I have followed your BPort, along with some picks from the GPort.
I do not have the time to diligently follow individual stocks anymore, and was thinking of switching to ETFs.
What are your thoughts about splitting some 400k in cash between ZCN,ZDV, and ZUE. Is there too much overlap in the two Canadian ETFs, and what are your thoughts on going with the "hedged" ZUE?
This is a non registered account. I am pretty sure that ZUE is treated as a Canadian Equity with no foreign withholding tax. Correct?
Thanks

Phil

Q: Your thoughts on this pls Peter/Ryan and team: with the VIX over 72 as I ask; historically (and I know all bets are off in this environment) and a best guess: are we "somewhere" near maximum panic?
Fyi I have been a net buyer over the last couple of weeks, panic creates opportunity imo. Your thoughts and opinions have been invaluable even though some have been hammering you for your answers..thanks!

Q: Hi there,

I'm currently in 100% cash. What are typical signs of a rebound and that the turbulence is over and how long does it usually take? In other words, traditionally what signals would one use to know when to buy back into the mark. Also, for simplicity sake, what ETF would you recommend buying to get torque coming of the bottom or that would lead out of the bottom/recession?

Thanks!

Q: Considering the huge drop in portfolio values, do you still recommend staying the course or would it be prudent to take profits where we still have them?

Q: I am looking to pair ETFs or stocks for growth and safety. What do you think about this idea and XMU [or ZLU] and ZUQ, for example. What portfolio percentage would you allocate to this strategy?

Q: What's your view of Covid 19?
In the event the contagion is contained, should we expect a meaningful market rally or would the damage done to the economy be felt for a longer period at this stage. Simply looking for your outloouk and gut feeling. Thank you!

Q: How does one preserve capital at times like these if one is fully invested, mostly in equities? This is defintiely not the time for changing sector allocation...How does one deal with having a full position SHOP for example? Thanks.

Regards,

Shyam

Q: You may recall my question a couple weeks ago when I had sold all equities and was building a defensive portfolio of inverse etfs (HXD, HQD, HIX, and volatility HUV) and asking for further suggestions for the troubled times ahead. I noted that this coronavirus is not a one off event (like 9/11 or the 2008 crash) but a steadily worsening situation on a global scale that was sure to lead to major declines (especially given how overbought N. Ameican markets have been) and also stoke volatility. My thinking was that having made the "trend my friend" during the 11 year bull market, it was high time to give the bear a chance. The virus was the spark, but it could have come from elsewhere, as we saw with the oil shock yesterday.
Needless to say, the returns on the bear bunch have been stellar (I keep moving up the stop losses to lock in any gains when the markets decide to turn positive). Each 'bad' day is putting more money in the coffers for the days of capitulation when it looks like the tide is finally turning. (Disclaimer: I don't recommend this approach to everyone, as leveraged etfs can bite both ways, and one must always use stop-losses). Many experts are chanting the old mantra "the best thing to do is do nothing" and advising us to keep our long-range objectives in sight. One problem with this is that after such routs, markets often look for new leadership and favor new sectors of the economy. This happened after the tech crash, when it was back to bricks and mortar.
My question concerns methodology: I don't really understand why anyone would hold any equities through the kind of rout we are witnessing (except maybe virus-driven names like Clorox or some of the Pharma companies working on vaccines). Isn't it far better to sit on cash (cash is king and queen) or do a bit of contrarian investing in order to keep eking out modest gains through the market mayhem? Then, one can rest easy until the dust finally begins to settle (instead of losing sleep wondering what the next day or next moment will bring), and gradually leg into your favorite long-term positions on the worse days? Am I missing something?

Q: Good evening,

I have $100,000 sitting in my account and have been very patient to enter the market over the past couple of years. Right now seems like a good time to max out my TFSA and invest a large portion of this money but the question remains where/how? Individual stocks? ETFs?.

I’m 30 years old, have no debt and rent. This money I guess can be considered my savings so there’s no timeline as to when ill need it. With an outlook of 2-10yrs being invested with a moderate risk tolerance (would like to see some decent returns) any suggestions?

Q: I see your 5iresearch ETF growth portfolio holds WXM. I also separately asked if WXM was a income or growth ETF. Your reply included comment that WXM fee of .65 % was high and the 5 yr ROR not very impressive at 5.12 %. Is it an ETF worth holding or not ? I am confused

Q: Given the drop in interest rates, I would appreciate 5i's view on Rate Reset Preferred Shares. I am a senior with a 60/40 portfolio of fixed income to equities and a focus on quality names, income and moderate growth in capital. What would 5i think of my selling a bond, taking advantage of recent price rises, and putting the proceeds in a Rate Reset Pref share (or ETF) for a longer term hold. Would 5i please suggest one or two names to consider.
Thank you.
Edward

Q: What would you look for in timing a buy? The vix at over 80? In particular I am interested in adding to my position in Verisk Analytics but this could apply to any stock.

Q: Any interesting happening in the markets the last little while? The price drop has been swift, but given where the S&P was in December 2018 (2416), there still seems to be some room on the downside. Is this a good level to start buying at? Different issues were affecting the market in each instance, but it still seems early to be a buyer right now.

Jason

Q: I am trying to understand how a payroll tax cut rumour can spark a potential bounce in the market and if a big bounce (should it happen) is just an artificial bounce or something to take seriously? To me it would seem that coronavirus is only just beginning to be felt in North America and that rate cuts and tax cuts can't change the impact of fear and potential shut downs. My question is do you think the market has fully priced in the impact of coronavirus on the economy or has it just reacted to the headlines with another probable leg down when earnings are dented?

Q: The only thing that didnt go down with the rest of market was an asset class called Pensions. I believe the assets behind all pensions when south including the deterioration of the credit quality of the bonds held within .Is it possible that pension holders may feel the same pain as other asset holders?

Q: For investors with high level of cash and based on current information available, how would you deploy capital going forward?

If we experience another big drop in the coming days, would you advise waiting for more stability. I did buy stocks today but remembered that I bought in too early in the last downturn.

Thank you for the special report today. Much appreciated.