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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Thank you for your thoughtful answers to my previous questions, Peter and Co.

This year, my 50/50 asset allocation portfolio using SPY and a US Money market fund did well while the market ended where it started. I rebalanced when the market dropped by 10% which happened three times — an unusually high frequency.

History shows that 10% drops happen twice within three years whereas 5% drops occur more than twice a year. Would investors do better by rebalancing after a 5% move rather than waiting for a 10% move?
Read Answer Asked by Milan on December 18, 2018
Q: EquityClockOct 24th, 8:07 am
US New Home Sales down 8.9% YTD, weakest performance since 2008.

Given that housing is known (or so they say) to be a predictor of how well the economy is doing.....what are your thoughts on the above news? Should we worry or at least be cautious?

Thank you!
Read Answer Asked by Silvia on October 25, 2018
Q: Markets seem to be shrugging off the threat of a trade war. Do you think there is a high risk of a crash? Are Investors are not taking it seriously? Or would the impact of more and more tariffs be small enough that it’s offset by current economic growth? Thank you.
Read Answer Asked by John on June 21, 2018
Q: I have SPY and VIG and VUN for the US markets
I also have some US mutual funds which I intend to liquidate sometime in the next 12-18 months
Could you give me an opinion in general about the US market ?
since Jan there has been a pull back, Don Vialoux a few months ago hinted that
there could be pull back in the next few months
thanks
Michael
Read Answer Asked by Michael on March 20, 2018
Q: I wonder if I could get your take on what Jim Cramer says is behind the current mess in the market. According to him most of the problem is hedge fund managers having to sell stocks to make margin calls on heavy, leveraged short bets they made on VIX volatility funds. It makes as much sense as any other reason I've seen. If it was just fear of a rising yield the big banks would be rising, not leading the way lower. https://www.cnbc.com/2018/02/08/cramer-these-4-securities-will-signal-the-end-of-the-sell-off.html
Read Answer Asked by John on February 08, 2018
Q: I have been wondering for some time about market valuations and your recent comment about inflation being bad for markets has raised it again for me. If a market is doing reasonably well and inflation sets in could there be a reset of stock valuations. If so what sectors could get re-evaluated and is it across the board in a given sector or specific to certain size market caps?
Thank you
Clarence
Read Answer Asked by Clarence on February 07, 2018
Q: From BMO Capital Markets, regarding the cost of borrowing (rising interest rates) and the new US tax bill. "Starting in 2018, companies can only deduct interest expense of up to 30% of its EBITBA. Any amount beyond this, will no longer be deductible. This will tighten further in 2022."
I read this quote, and noted that while you do not cover US Markets, this tax increase on companies in the States, may largely affect some of your members' portfolios. I really don't have a question about it, but thank you again for your guidance in regards to searching for value stocks. Susan
Read Answer Asked by Susan on February 06, 2018
Q: Any general comments on the current market sell off? Thanks.

(I hate to get into the mode of worrying that this is the start of a bear market scenario - prolonged time of continued losses. The cure to that worry for me would be reasons x, y, and z to be reassured that is not happening at this time. And so, if one just waits it out.. things will eventually come back, and go higher too)
Read Answer Asked by John on February 05, 2018
Q: I am noticing that alot of investors are very worried about a market correction. It is a fact that the market will drop at one point but are we overdoing it at this point and time. If the market is to have a correction in the next 12 to 16 months isnt it still time to be invested in the stronger sectors and maby pull back on the weaker ones
Read Answer Asked by James on January 30, 2018
Q: Norman Rothery recently wrote an article regarding the CAPE ratio. He indicated that the CAPE was above 32 where as the median value is aprox. 16 implying that a S&P market correction of 50% would be needed to bring the market down to its median value. The article was very convincing as are all his articles, they seem to very well researched and well presented. Could you comment on this CAPE ratio and how much faith would you put it. Thanks Ron
Read Answer Asked by Ronald on January 05, 2018
Q: Why the small cap sector has been lagging for the last 6 years. Its been underperforming for a long time. Also, why the millennials are not interested in his sector. I just do not understand why the sector is so unloved.

Last question, what is the difference between the US small cap vs Canada small cap.

Thank you in advance for your comments.

Norwood
Read Answer Asked by Norwood on January 05, 2018
Q: I believe there is not much opportunity in the the technology and health sectors in Canada, so have invested in USA to gain exposure to those sectors. Are there any other sectors where investing in USA be preferable to maintain proper diversification by sector?
Read Answer Asked by Robert on December 29, 2017
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