Investment Q&A

Q: My RSP is comprised of VFV, VIU, CLF but I like the concept of the auto rebalancing of VGRO. However the longer duration bonds in VGRO are concerning. Would you make the switch. Conventional wisdom says bonds are going to be destroyed going forward, when monetary tightening eventually happens.
And by the way my 2020 5i account return was 16%. You guys Rock!!
Thanks

Q: I have a taxable corp account, 94% equities,(28% US, 6% cash. Just read an article that bonds even at 0% expected return would help off set losses in this and upcoming volatile market, even though interest would be fully taxed.
Would you suggest;
1. sell some winners or tax loss some losers and buy a bond fund, ?CLF. ?CBO-or another one you might recommend. What weight percentage would you suggest?
2. use the cash to buy the same bond fund or a combo of the above two or your alternative
3. buy a preferred corporate share or shares? suggestions or preferred ETF ?HPR or another suggestion
4. Would you suggest a US Bond fund, ?suggestion
5. do nothing
Thanks and deduct what you see fit

Q: With governments pouring money out the window inflation and declining bond prices seem to be a certainty. Where do you go for safety? How would CLF compare to a fund like HFR? Are equities safer at this point? Always value your opinion, thanks.

Q: The bond portion of my portfolio is equally weighted between CLF and ZAG. With CLF having a government bond and shorter term focus and ZAG having a corporate bond component and longer average bond life, would it be sensible for someone with a medium risk profile to sell CLF and consolidate the bond portfolio in ZAG to take advantage of the higher interest return?

Q: What are the best government bonds for a retired 70 year old, that presently has no fixed income????

Q: I have no exposure to fixed income and wanted to know if there are any other that you were preferred over this list? I am looking at buying all of these names each for a 5 % weight.

Thanks

Q: I am currently reviewing my mother's non-equity portion of her retirement portfolio. She currently owns CLF, ZAG and short-term GICs. The interest from these investments are not needed for immediate living expenses. The non-equity investments in her portfolio serve to reduce volatility, and provide peace of mind.

Everything I have read recently indicates that interest rates have likely made a long-term bottom. As such, I am wondering whether my mother should sell ZAG and keep her interest-bearing investments in short-term, secure instruments only (i.e. CLF and GICs). In short, should she be staying away from mid-long term bonds?

Jeremy Siegel recently recommended that retirees should modify the traditional 60/40 stock/bond portfolio to 75/25 going forward because he does not anticipate good returns from longer-term bonds. Do you agree?

Many thanks for your thoughtful and valued insights.

Q: Hi Peter and Ryan.
The US will try to open up the Economy and create employment. I remember they have talked about spending on infrastructure. I am looking for some opportunities there. Do you think CLF is a good mid/long term investment? What are your recommendations if not?
Thank you,
Yiwen

Q: Hi,
I'm trying to create a well balanced bond fund for that portion of my portfolio and have come up with this: HFR-T, CBO-T, CLF-T, TLT, XBB-T, CVD-T, SHY, FLOT, IVOL, BNDX, VSG-T
I guess I should have something that will generate monthly income as well? If I am overdoing this, please let me know...it seems like a lot of holdings. Is there a better way? A mutual fund?
Thanks.

Q: I am looking at the fixed income side of my portfolio and I am questioning the wisdom of holding CLF. Now I know there can be some sense in holding bonds even when interest rates are low (ie for the yield to maturity (YTM) and for the possible capital appreciation if interest rates go even lower). But for CLF this barely applies: the avg YTM is only 0.56% and the avg duration is 2.66 years (according to the Blackrock website on Apr 27). Thus the potential capital appreciation is very capped as the appreciation would only be in the 1.5% range if interest rates dropped to 0 and yet the potential capital depreciation is much much larger if interest rates rise significantly. So one is risking capital for a very low ytm without much potential upside and if interest rates rise, a potential rather large downside. Wouldn't holding cash make more sense?

Q: What are your top 5 Fixed Income ETFs (Cdn or US / International exposure) to hold long term in a RRIF or RSP in the current environment?
Thank you in advance.

Q: Hi Peter
What are the pros and cons of buying CLF vs actual laddered Govt bonds.
Seems CLF is easy to sell--but is there more risk in a down market?

Q: How would you rank these bond funds. I sold FTB and bought PMIF but it is not performing well. Bond funds have not performed well due to the drop in interest rates. I am retired in my late 70’s.

Q: Thanks for all your hard work during this uncertain period.

I'm transferring conservative Mutual fund monies (to get out from under their fees) over to Questrade.

I want to keep that money conservative. I'm not drawing back, but just trying to keep my allocation.

I've read that similar bond ETFs are not the best way to go forward. Some recommend cash, even US cash but this seems too fearful.

Please recommend an ETF option for this situation.

Q: XBB, HFR and FLOT have not held up well during this challenge. Can you suggest some liquid bond ETF's that will simply stay flat and pay a modest dividend?

Q: I have both CLF and ZAG in my bond portfolio. CLF continues to go up as interest rates come down. ZAG was doing the same until the last two days. Do you think the drop in ZAG is due to the industrial bond component and business credit risk? If there is fear that businesses will default on their bonds, it might be appropriate to take profits in this fund.

Q: Do you see more downside to ZCS? And why ? It seems very safe in this environment but I want to make sure I understand the risks. Thank you!

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: I am a long time subscriber and an avid reader of the Q&A. Even with all I have learned, I am still having a difficult time understanding how to invest the fixed income portion of my portfolio. I want fixed income to provide portfolio stability by protecting on the downside while offering the possibility of capital gains along with some income.

I am a buy and hold investor on the equity side and I am comfortable deciding when to sell a company. However, the fixed income side seems to demand a more active approach - or does it? For example, you have been suggesting that interest rates seem likely to decline in the coming months so that would favour long term bonds. But for stability, or as an offset in case I am wrong, should I also hold short term notes? Should my fixed income portion be split 1/3, 1/3, 1/3 among cash, short term and long term and just left at that or is it necessary to continually monitor and adjust these weightings? Or is there one fund that does all that already?

Appreciate your insight.

Paul F.

Q: I purchased XBB and am looking for another fixed income etf to compliment it. Thanks, Len