Investment Q&A

Q: Stock picking is getting too challenging!
Slowly shifting to broader ETFs. Eg utilities, energy, banks.,
Now looking more broadly at the TSX, NASDAQ, Dow and TSX.
Long term it seems that even among the professionals it is tough to beat the indexes.
Hence my shifting strategy.

Are these indexes revamped periodically?
If yes, how is it done. How often. Criteria?

Would this be the main reason for beating most of the pros?

As usual thanks for your help

Q: Hi! I am wondering where you feel opportunities in the market exist. When oil was negative very few advisors were pounding the table to buy. It seems now looking back it was a no brainer and seems so foolish that I wasn't loading up on these bargains. Will we look back and say why didn't we buy high growth tech? Or, is it beaten up renewables/bond funds you favour if adding new money? Where do the opportunities lie based on current geopolitical risks and risk of recession/stagflation?

Q: Hi Everyone at 5i!! I had the pleasure of reading Peter’s article, ‘’ 5 things Investors Rarely Think about Before Buying a Stock but should “ and it gave me good food for thought. I was wondering if 5i would put on a webinar about reading a stock’s financial reports, which help determine if a it is a good investment. I am aware of some things, but could really do with a comprehensive over view. For all I know you could have already provided such an over view and I missed it. If so, could you please provide me with a reference to the information . Cheers, Tamara

Q: Hi 5i,

Has there ever been a time (in relatively modern history) that the central banks have actually been raising rates in a recession?

For all the talk the banks have done about raising rates, very little has actually been done.

Thanks!
David

Q: re your reply to a question today:
The issue in the current environment, however, is whether raising rates actually impacts the specific inflationary items we are seeing today (such as those caused by supply chain issues and the war).

Great point. You don't heard much discussion on that. If raising rates will not dampen inflation, then the Fed may just stop raising the rates. Don't these rate hikes add to the interest costs to government borrowing? Gov't debt is much more of as concern than private debt. The US has committed to to huge infrastructure spending. And that was before the war in Ukraine. Military spending has to increase. At the least, all those weapons have to be replaced.

Q: Hi 5i - do you like the new CDN $ hedged CDR investments for US companies such as NVDA and Netflix?

Thanks, Neil

Q: Good Day
When these companies like BNS announce share buybacks. What determines when they buy back shares and how many total buybacks they exercise. Would the buybacks by Google be done the same way or are the rules in the US different?

Q: The great team, how is an increase in interest rate can lower inflation?

Q: Hello to the great 5i team,

Any website where i can verify how many shares are repruchased by a company ? Thanks !

Q: I am confused and would appreciate some of your knowledge on the mechanics of the type of transaction Mr Musk is doing in buying Twitter.

a) I thought that stockholders were the owners, so that buyout would mean everyone's shares were being purchased. Is this the case?

b) Then Musk said that the Board were refusing to consider his offer and they weren't aligned to Twitter's performance because they weren't big stock holders. Can a Board actually block a takeover? The press seemed to think so. Isn't there going to be a vote by shareholders on the offer?

c) Then there's the purchase price. If it's going to remain a public company, then that $49B goes where, into whose pockers?

Thanks for your guidance on these questions.

Q: Hi Peter

Is it possible to share the link to your asset allocation article that Steve mentioned yesterday?

Thanks

Q: Hello!

I'm fully invested in the market (just turned 30) and have a small cash cushion on the side. I'm making 6 figures and have all my RRSPs in indexes and TFSA in growth stocks. Went from $100,000 to $65,000 in the last few months in that acct. I wont be using any of the money I'm investing for 10+ years and I'm not really bothered by the drops. My plan is to keep investing monthly in indexes and your picks for my TFSA and non registered account. I will not be selling. Is this a good plan ? Anything else high-level I should be aware of. PS I have no debt and can save half my income and my job is very secure!

Q: I follow your balanced portfolio and only have vgg for us exposure. I was reading about CRD s and wondering is this an easy way to buy some us stocks. How are they different? Would it be better to use tfsa account for these investments.

Q: Just a compliment on the recent 5iR article on Asset Allocation. I am fanatical when it comes to asset allocation. I learned decades ago that the biggest impact on your overall returns is from asset allocation, not stock selection. I had never heard/read the differences between Strategic AA vs Tactical AA....nicely laid out.

Every trade I do, whether it is a new purchase, a complete sale or my usual adds + trims is only done once I review the impact on my overall AA, both by sector weighting and individual stock weighting. I rarely adjust my AA, although I did make a tweak roughly 6 months ago...raising my Energy weighting while reducing my Technology weighting. I guess I got lucky...or...just maybe I was doing a little Tactical AA adjustment.

Again, thanks for the great article....Steve

Q: Good morning, I kept almost all my growth stocks thinking I'll ride it down as usual but it's a bit worst than I thought, instead should have trimmed more to the like of NVDA and SHOP and a few others. Down over 12.6% from high so far. Everything seems to being priced for recession. Panic selling has not started yet just a slow drift down. Market could go down considerably more from here. Like 10 to 20% and we won't hear the bell.
Starting to get jittery. Your view on this assumption please?
Thanks for the great service!

Q: Will I get a dividend if the Ex-Div date is Apr. 27 and I buy a stock today? How the Settlement date of Apr. 29 will affect this transaction for the purpose of receiving the dividend?

Q: Hello, I saw your answer to Stanley: “Bonds may look better next year, and may look better if the market weakens further.” We are expecting rates to climb, which will affect the bonds value. Normally, rates would already be higher at this stage of the economic cycle, and I would understand. I just don’t see the benefits of keeping bonds in ETFs with the current situation. We might as well hold cash or at least ST bond (held to maturity) for market protection. Could you help me understand? I am thinking about changing a portion of my portfolio (VBAL, XBAL MAW104) for a stock ETF / individual bond strategy.

Q: This is something I would rather discuss rather than post, but thats not doable.

So here goes. I've been a subscriber almost since your beginnings and more or less understand how you operate and the type of investments you would reccommend in your portfolios.

There is something that really puzzles me, especially given your experience, and know how.

Take SHOP as an example. About 5 months ago it hit a high of $2230. Today it is $595.

In between the highs and the low you have waxed eloquently about the market conditions and risks involved in the Q&A section, almost on a daily basis. You've talked about increasing rates, the aggressive fed, how high value stocks react very poorly to these conditions etc etc.

In the balanced portfolio it was purchased at approx $1200 and so it has gone from a 100% gainer to a 50% loser.

To me that is a very very large opportunity loss.

My question to you guys is this.

Given client sentiment and emotional well being (given people hate to lose more than they enjoy winning) why does 5i not adopt a strategy to prevent this from happening.

For instance, a widely adopted strategy that once a position doubles half is sold to ensure that there are no losses on the position. That would make a lot of people very happy.

OR, I know you resist this, but using LIVE trailing stop loss orders. Imagine if 5i adopted a trailing stop loss order, where there is no emotional involvement, just a limit to how much you allow the stock to retreat before selling it. Imagine if there had been a 20% TSL on SHOP. And you know what, if we are stopped out then 5i can reccomend in one of its monthly updates a repurchase if they deem it ok. How much can you miss out if you are out of a position a month or less?

Most would certainly say darn, we missed a few points, rather than saying darn, what am I going to do now?

I do subscribe to other services that have perfected these techniques and they can work very favorably , especially in horrific markets like we are experiencing now. For most subscribers it can certainly give Peace of Mind.

Food for thought

Sheldon

Q: Dear 5i,
I just renewed my annual membership. I have been a happy member since you launched your service. I just wanted to email my gratitude for providing timely and unbiased objective information. I am a basic subscriber but I like the other options you provide and the continual improvements. Thanks and stay well!

Q: Thoughts on how to stomach all the volatility. Since I know you are not a fan of stop losses does one just grin and bear it. It's nice when some sectors are working but what does one do when all sectors potentially stop working? It seems there are so many unknowns which the market doesn't like. In your experience, what is it like to go through a bear market and what advice you you have for nervous retail investors. Your wisdom appreciated!