Investment Q&A

Q: Good morning,
My grand childrens' (8 years old) in trust accounts each have $60K in CASH and would appreciate your thoughts and comment on the merits of my following investment plan:
Q1. Investing $20K in each of these funds (HXS, HXT and HXQ) and not selling any of them until the children are 18 years old at which time they would each open a TFSA account and start transferring each year the maximum annual TFSA contribution allowable from their non registered account to their newly opened TFSA account; and
Q2. Assuming that you are ok with the above plan and given that there may well be still a further sell off in all three sectors, when would you recommend initiating a full or partial position in all three sectors? Thank you.
Francesco

Q: Dear 5i,

Can you provide some ideas where one might invest some cash if we have negative interest rates.
Should we be borrowing money to take advantage of negative interest rates?
Do you think negative interest rates would inflate the Canadian real estate market prices?
What observations have you made from European negative interest rate policies?

thanks

Q: Hope everyone at 5i is doing well in these times!

I have been sitting on mostly cash in my RRSP/LIRA and would like your recommendations on the best ETFs to consider for my full US and International exposure. All of these would need to be listed on the TSX as I am purchasing in CAD $. While I know you prefer non-hedged, I’d greatly appreciate if you could explain benefits/workings of hedged vs. non-hedged considering the current environment. And provide ETF recommendations for each.

I am looking to achieve a balance of diversification, reasonable MER, minimizing any withholding tax while optimizing the potential in market recovery. For US, I would like to have a technology ETF, health care ETF and a broader spectrum ETF – but also open to ideas. Also, looking for recommendations on International – one broad ETF or perhaps that and a mix of ETFs. I recognize there can be overlap (e.g. between a tech and broad sector fund), so if you can give me a sense of the degree of duplication that may be present in your recommendations. Perhaps going heavier on tech right now could be a good thing.

While I started off thinking ETF selections would be relatively simple, in reading various Q&A there seem to be many important considerations - your assistance is appreciated. Again, all of these are being purchased in RRSP/LIRA accounts with the goal of optimizing my returns over a 10 year window.

Q: Hi Guys
a bit of a conundrum here, i came into the crash with 45% cash hoping to buy some U.S. stocks, but the low CDN dollar is making me question whether it's worth it. I'm usually a long term holder, buy U.S. stocks for their dividend growth over time. Whats the most you would be willing to pay for a U.S. dollar when buying U.S. companies, my thinking is around $1.40/ $1.41 is this to high?
thanks Gord

Q: Do large pension plans such as CPP and other provincial plans carry a portion of their holding in cash, with the thought of taking advantage of severe drops in the markets

Q: I understand that the market is forward-looking. What has been difficult for me to ascertain, especially in these tumultuous times, is how forward-looking they are. I realize no one knows the future so we all have to decide for ourselves how long we think COVID19 will continue to roil the markets. But is there any way to know (guestimate) how far out the market currently thinks this will last? For example, I am writing this question on Sunday and wondering how the markets will react come Monday. Personally, I feel the increase in cases and apparent disarray in the leadership in the US is unfolding as I anticipated it would. Would a steep downturn in the markets Monday morning suggest analysts had it wrong or would it not really tell us much regarding the anticipated future? I guess I am looking for an indicator like the percentage chance that is assigned as to whether or not the Fed will change interest rates. Don't know where that percentage comes from but it always seems rather accurate.

Appreciate your insight and for your wisdom. It's helping me to keep off the proverbial ledge!

Paul F.

Q: Last year I took a sizeable position in VEE as one of the main parts of my foreign diversification. It has, like so much else, dropped a lot. I am wondering if the prospects for recovery in the emerging markets are not as favourable as the potential in the US or Canada, where economic resources (or the ability to backstop printed money) are stronger. As such, I am inclined to sell this position (and as you point out, harvest a tax loss) and migrate to some North America holding(s). Your comments, pls. Thanks for your excellent service.

Q: Hi guys,

Thanks for your valuable advice.

I am trying to process the wild swings going on and the lagging advice coming out through business news channels. With the new upswing in the markets, everyone is now proposing what we should have bought (and could still do). This is frustrating as it was good advice a week ago, and things will surely change again.

While we all understand that there is no crystal ball, what do you feel are likely scenarios for markets as investors process central bank and legislator market stimulants?
It appears that investment strategy is now heavily influenced by what has dropped, in combination with highly likely to be supported by government as critical assets.
If you could suggest any further insight in future direction or departures from recent strategy, and whether you feel that the government interventions are likely to hold us at a V shaped market curve, that would be helpful.

Thanks,

Peter

Q: 3 days up in a row. Should we be buying?

Q: Luckily, I went to cash on most of my US holdings in Feb, but kept some VIG, thinking it would survive better than others. That has not really been true and I notice that it does not bounce as much on an up day as one like VIS, which also pays a higher yield. As I start picking away at re-building my US portfolio, what 3 ETF's would you recommend?

Q: Canada had 1 million ei claims. the us had 3.3 million claims 10 times pop are we that bad

Q: Looks like the markets are liking the financial aid packages approved in the last day or two but do you think that this bounce is warranted? Would you start deploying cash here in both the Canadian and US markets or wait for less volatility? What does your experience tell you? Thanks.

Q: During this downturn in the market I believe 5i said it could be a V recovery. At the rate we are going we should be back to normal very shortly. I read 5i questions and write a lot of answers pertaining to me over the years. Do you see this recovery going at this rate or will there be a noticeable pullback? Thanks Dennis I really rely on your service

Q: Hi everyone,

I hope everyone at 5i and their families and friends are healthy and getting through the quarantine period.

I have a question about building positions. I assume its generally accepted that a full position is a 5% weight. Do you recommend sticking to full positions (5%) and half positions (2.5%) or can you build positions at 1%, 2%, 3%, 4% and 5%. Assuming a 1% position might be a junior gold miner, a 3% position would be something like Suncor, which is a good company, but volatile because its based on the price of oil and a 5% position being a stable, blue chip like BCE? Is it ok to look at it this way or does it make things too subjective and its best to stick to full positions (5%) and half positions of (2.5%-3%) and perhaps avoid some of the more speculative investments that would be a 1 or 2% weighting. If you're not comfortable holding 3%, maybe its not worth the investment?

Thanks,
Jason

Q: What is the one stock you would suggest to go all in with this correction?

Q: Can you please advise what happens during the depression. Which sector performs the best.

thanks for the great service.

Q: Want to get your opinion of what’s happening in the market today? Fear of missing out rally? Did you expect stimulus package in U.S. to create this much optimism when the virus is still spreading like wildfire in places like New York?

Q: Do you think we've seen the bottom now that the USA is close to a stimulus deal (as of writing today). I was wondering whether that stimulus announcement will be the last bit of good news for awhile. I'm trying to decide whether to wait for further lows which seems to be what everyone was calling for or whether to go in with a part position now. Your thoughts today on the stimulus deal and what may be to come would be appreciated. Thank you.

Q: David Rosenburg said on BNN: "I think that in short order we have all gone from talking about a recession to a steep recession, and now I think that we are talking about some form of Economic Depression, which might not have a formal definition, but it is a steep plunge in economic activity over a period of time, and then coupled with a very abnormally weak recovery."
The market is very spooked. Can I get your reaction/opinion, please.

Carl

Q: Lots has happened since your March 9 special report. Which ones are now your favorites?
Any other names you find interesting or sectors to avoid at the present time?
Thank you,