Investment Q&A

Q: I am starting a new portfolio, totally separate from my existing ones due to different ownership and would likely sell after 3 years. What sectors do you think will have the most positive movement in the next three years?

Q: I would like pics on shorting the market at this time. thx J ETf" s included.

Q: With an outlook that there is substantially more downside risk than upside potential in the markets, does it make sense to set up some pairs trades to reduce market risk. I don't short stocks, so I was thinking to use bull and bear ETF's. I had in mind (1) long NASDAQ (QQQ) / short Russell (RWM) and (2) long Investment Grade Bonds (LQD) / short High Yield (SJB). First of all, what do you think of the strategy and second, do my selections seems reasonable? Thanks for your valued advice.

Q: Hi, Covid19, China vs USA trade, Upcoming USA Elections, etc. How do you see the markets behaving to the end of 2020, should We be alert and think about selling/parking some cash for next year?
Thanks 5i.

Q: What do you think is the probability the Bank of Canada will resort to a negative interest rate, and if so, what would be the best investment strategy? What ratio of cash, bonds, gold, silver, and stocks? Thank you. Bob

Q: Good morning with the increased sabre rattling from the Trump administration against China my mind goes to what if we end up in a trade standoff. Just looking at North American stock sectors which will be effected the most and which offer the best protection if the dog pooh should hit the trade fan?
Thanks David

Q: Hello,with all the recent debt taken on by governments all over the world,this has kind of brought gold into the spotlight as a possible “safe haven” do you think Paul Tudor Jones strong endorsement of bitcoin would be a competitor for investment dollars in that space or am just misreading this
Also do you think with this tremendous amount of government and consumer debt load,do you think gold could be a good investment going forward for at least a possible 1-3 years and maybe even much longer depending on when balance sheets of governments start to look better thanks

Q: Hello,
I was about to question when I should make a significant buy in my kids’ TFSA’s, and should I wait until 2nd and 3rd quarter earnings are out which could substantially affect the market to the downside. Then I read your article: Unintended Investments consequences from Covid crisis. You seem to have answered that very well in that the Central banks of the world have a “put” on the floor of the world’s markets and the worlds’ governments have politically put cash in the hands of those who need it most somewhat enabling the economy.
So in other words, you would suggest to get a move on and start investing before the expensive market becomes more so?
Cheers,
Rick

Q: I believe recently discussed a maneuver to exchange CAD to USD. Is that something I can do in a self directed I trade account?

It seems to me that if this is a dead cat bounce in the market and there is another test of lows that having USD would be a good hedge. What are your thoughts on the best currency to preserve capital?

Q: I am trying to understand what is going on with the market. While the drop that happened was expected the fall was exaggerated by virus implications. The market now seems to be back to where we were before the drop which by some accounts was overdone and ready for a fall. Yet now there are even more reasons for a storm to occur.
Please, any thoughts you have to make sense of this.
Thank You,
Peter

Q: Can you confirm my understanding of what is happening: Deflationary pressures based on lockdowns/economic slowdowns due to COVID-19 and Inflationary pressures based on bond purchases/stimulus from central banks around the world.

If this is relatively (and simplistically) correct, do we have a belief on which pressure will win out over time?

Q: What equities would you expect to perform well in a currency devaluation environment (large deficits funded by money printing)? Thanks.

Q: I had some cash on the sidelines in March and managed to buy at some lows.
Im actually in the black now overall and of course my emotions (I think greed) take over and I think I should sell a portion in preparation for another dip - maybe a big dip after some of the reality of the impact of covid 19 is realized.
I bet you hate questions like this but, would you sell a third and see or just ride it out ?

Q: Good Morning 5i Team,

Employment numbers are coming out tomorrow and they will be dramatic.

Do you have any thoughts on how the unprecedented job loss reports might effect the markets?

Thanks for all you do

gm

Q: From your prespective does the huge difference in P/E in canada vs the SP 12.8 vs 20+ represent a buying opportunity for canada or does it reflect the market difference ie the greater resource content in the tsx.

Q: In one of your questions you said it looks as though the worst of the pandemic is over. Just wondering from a financial perspective why you would have this take.

Thanks

Q: What do you think of this etf as a hedge to the market ?

Q: What did you think of the earnings report of BRK.B? What do you think about Warren Buffets comments?

Interested to know what your thoughts of this market moving foward (e.g. re-test the lows in March, low downward drag, best to continue to buy small and steady over time, sell anything that might have been bought too high at the rally)? I ask this question as I assume all your subscribers are wondering as these markets are difficult to navigate.

Thanks so much for your fantastic service. Best investment decision I have ever made. Hope you and yours remain safe and healthy.

Q: Given that my Margin account has the 5 big banks and 2 Telecoms paying dividends on a periodic basis and that I'm not "too" concerned that these will cut their dividends, would it be wise to implement trailing stop loss orders for these in case there is another retest of the lows of March. Had I done that at the beginning of the year, I could have picked up the above at much reduce prices with resulting greater dividend yields. And would using the same procedure for my RIF account (which has mainly REITs) be beneficial to capture the current values to avoid further losses there.
Your comments. Thank you

Q: Hi Peter: When I sit back and take a look at the big picture and review how my portfolio performed during COVID-19 (so far), I try to see what lessons I can learn, then turn to how to apply those lessons to make my portfolio stronger.

I am a retired, dividend-income investor. I am a huge believer in asset allocation and have designed a portfolio, in my opinion, to be reasonably well diversified, although heavy to Canada. It WAS roughly 70% equities (including 32% foreign content) and 30% fixed income (roughly 15% insured annuities, 15% Fisgard Capital...both averaging in the 5-6% pre-tax range and minor cash). My equities are mostly blue chip, dividend payers, as you can see above. The 3 mutual funds are a very minor part of my portfolio, especially Eric's Energy Fund (<2%). I also receive a company pension and CPP-OAS which, when included, drops my equities to roughly 32%.

I use various metrics to monitor my portfolio, such as P/E, P/BV, P/CF, P/S, Beta, ROE, Div growth, Payout%, technical indicators like 200 mda. I am normally a buy-and-hold investor who trims/adds around a core position.

Periodically I measure how "at risk" my portfolio is relative to the overall market. I do this by prorating my portfolio using Beta. Based on equities only, I averaged 0.68 and for my entire portfolio I averaged 0.44. So, one would think that if the overall market (TSX) was to drop 30%, then I would have thought my portfolio would drop 44% to 68% of that, being in the range of 13% (overall) to 20% (equities only).

In actual fact, my entire portfolio dropped 27% from peak to trough vs the expected 13%...over double! I understand that EVERYTHING was sold off...almost no exceptions. So what do we learn from this and what changes should we consider? Do we accept that "sxxt happens" once in a while...you can't predict every event, accept it and move on? Should we consider increasing the cash component as a buffer? Or...is there something else to be learned here?

Thanks for you help...much appreciated...Steve