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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: I have stayed away from bonds but recently I think it's time to allocate some funds to bonds. I have holdings in VANGUARD ALL-EQ ETF PTFL (VEQT) and VANGUARD GL VAL FACTR ETF (VVL) and would like to divert these funds into all-in-one ETF funds with 60-40 equity-bond funds. What do you suggest?

Read Answer Asked by Gary on May 17, 2023

Q: David Rosenberg has recommended a mix split nearly evenly among long-dated US treasuries, high-yield bond and high-paying dividend stocks for investors seeking a favourable return with reduced overall volatility. My questions are:
1) are long-dated US treasuries the same as bonds?
2) how long would you go?
3)could you recommend a long-dated US treasury ETF and a high-yield bond?

Read Answer Asked by Mary on May 01, 2023

Q: We have held VIG in our RRSP/RRIF accounts for about five years and are happy with the performance. It is now around 7% weighting (I know you are ok with larger ETF weightings vs individual stocks) but I'm thinking of reducing it by about 25% to bolster our underweight fixed income holdings and also to hedge against possible market downturn. My only other fixed income holdings are TLT and a couple of short term GICs. Does this switch make sense and if so what short term bond fund would you recommend if I were to make this move? Thanks for the continuing great service.

Read Answer Asked by Martha on April 30, 2023

Q: Structured notes are a stock/bond hybrid with a limited life span or maturity. When an advisor touts them, they may sound appealing because they often combine high coupon rates with some level of principal protection that would enable their buyer to get their original investment back. Legally, they are unsecured debt obligations of the issuing bank. Unlike most bonds, their coupon payments are often contingent on the performance of an underlying asset such as a stock or index, which means coupons may not always be paid. Structured notes often have no potential to appreciate in price or have an explicit cap on maximum gains.

According to Amy Arnott, a Senior Portfolio Strategist at Morningstar,

“Structured notes may offer big payouts, but those advertised yields aren't always worth the risks. In fact, when we recently dug into some of the academic research on how structured notes have performed, we found that two of the three studies we reviewed found that on average, structured notes have failed to perform better than a balanced portfolio of stocks and bonds, and at times have failed to keep up with risk-free Treasury bills.

Structured notes still account for a tiny fraction of investable assets in the U.S., but they've been gaining in popularity amid recent market volatility and record-low interest rates. They're often described as a way for risk-averse investors to capture additional income while limiting downside volatility. But their embedded costs, complexity, lack of liquidity and transparency, and often unfavorable payoff profiles make them difficult to use in a portfolio. Investors tempted by double-digit yields should therefore tread carefully--or take a pass.”

Can I please get your thoughts and views on structured notes and whether you are in agreement with Amy Arnott’s opinion on structured notes as an investment vehicle? Is this another losing investment opportunity like buying shares in WEED.TO back in the Spring of 2019?

Read Answer Asked by George on April 27, 2023

Q: If the unthinkable happens and the US doesn't raise the debt ceiling leading to the US government defaulting, how would this affect holdings in each of HSAV, HSUV.U and ZMMK? Secondly if an investor held both such an opinion and such holdings, would it then be prudent to sell the holdings before the limit is reached? Please define the risks to these holdings if any actually exist.

Read Answer Asked by Ken on April 25, 2023

Q: I keep hearing about the 60/40, 40/60 ratio of what you should be invested in with regards to Stocks and Bonds...

- I have Never held Any Bonds of Any Sort...Just Stocks...

- Please recommend some sort of Bond Investment I can consider that is somewhat safe, but Not ultra conservative...

- I remember when my parents said that Canada Savings Bonds were a good and reliable investment...a vintage memory...

Have a good weekend

Read Answer Asked by michael on April 24, 2023

Q: This article appeared on the BNN/Bloomberg website yesterday

Can I ask you to please translate it to something understandable? Is it saying regardless of monetary policy that market forces may drive yields higher (and by extension bond prices lower?) If so, this seems to fly in the face of a lot of advice out there that now is a once in a lifetime opportunity to buy bonds?
Thank you.

Read Answer Asked by Stephen R. on April 21, 2023

Q: How would you recommend adding a small/prudent amount of exposure to bonds in the current market environment?

Read Answer Asked by Patrick on April 21, 2023