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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: What do you advise about investing in banks given current market environment. What are the tipping points - pro and con? Which 2 or 3 banks [Canada or US} would you put on a watchlist?
Read Answer Asked by sam on March 12, 2020
Q: Given current market prices and with 3-5 year time horizon, what are your top 3-5 names, US or Canada, for growth.
Read Answer Asked by sam on March 12, 2020
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?
Read Answer Asked by David on March 12, 2020
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?
Read Answer Asked by Alex on March 12, 2020
Q: I found this ETF when looking at some of the top ETF providers by AUM in Canada and noticed CI First asset was #5... this looks like a blend of ZUQ and VGG, what do you think compared to some of the other US dividend ETFs trading in Canada? Would you recommend it, and what would be your opinion on CAD Hedge vs Unhedged given where our dollar is trading currently and future outlook
Thank you for the great service
Read Answer Asked by Kyle on March 12, 2020
Q: Hi 5i team,
Looking at the broad US market index (apart from NASDAQ), which will be your top two index ETFs that will most likely provide the strongest gain and the quickest bounce when the market turns around? And why? Prefer Canadian listed ETFs if available.
Thanks.
Read Answer Asked by Willie on March 12, 2020
Q: My understanding is that at least some of Lightspeed's business relates to the restaurant industry. If this is indeed true could you please comment on whether the Corona Virus outbreak might affect their revenue. It seems to me that people will be less inclined to go to restaurants until what has now been called a pandemic is under control. Also do you think that Lightspeed has the fundamentals to withstand a market downturn for the next several months or perhaps longer. Your insight into this situation would be greatly appreciated. Thank you.
Read Answer Asked by Rob on March 12, 2020
Q: Good Evening
Some economists are predicting a weak Canadian dollar for the rest of 2020. What is your opinion with respect to the performance of our dollar for the rest of 2020.
Thanks
Read Answer Asked by Terry on March 12, 2020
Q: In February, I was adding to my fixed income and believing that interest rates would not go any lower, purchased ZFH. It, like so many other holdings, has been hammered. It now looks to me that rates probably are not going up, for an extended time. If that is correct, is there any chance that ZFH will recover when the market calms down and equity prices begin to improve? Thanks for your excellent service.
Read Answer Asked by Leonard on March 12, 2020
Q: I've read the answers to previous ZWB questions and the risk seems minimal now with this decline in price to below $15, given these are Canadian banks. Are the two main risks, reduced bank dividends, and reduced or no income, causing further share price decline? What other risks may affect this ETF, and your thoughts on possible things that could cause a further price decline from here. Thank you.
Read Answer Asked by Will on March 12, 2020
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