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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: Looking for your crystal ball on who you think will underperform or outperform in 2023. Can you rank overweight underweight or neutral on overall market performance:

USA, CAN, EU, Global, Emerging Markets.

Reason I ask is I am heavily overweight USA and thinking it might be a good time to move to neutral in USA and move that cash to one of the other 4 geographic areas.

Read Answer Asked by Tom on January 27, 2023

Q: Hello Peter et al:

A great question by James today and equally a great answer by you! AAPL wasn't included in James' question and hence the price targets characterized by Good price VS Great price for AAPL wasn't mentioned. I have added AAPL here.
(MSFT: 240/210; GOOG: 95/80: AMZN: 95/80.)

IF I were to request you to wear your Option trader's hat, (after all you manage a fund based on options!) how would you play these stocks. Assume that these are long term holdings and cash covered. Should one simply either buy puts or sell covered calls. Your "great" price targets roughly assume about 15% downside correction.

If indeed these solid stocks are going on sale and if one is determined to hold them for ever, why would one not make any money whilst one waits?
That's the thesis behind my question.

Many thanks in advance.

Mano

Read Answer Asked by Savalai on January 26, 2023

Q: Good morning 5i,
I enjoyed reading your latest market report on the potential for decreasing inflation, and am thinking of tweaking some sector realignment to capture this possibility.
I have had a good 2-3 year run with RSI but their earning do not look good so am planning on selling this. Will then redeploy funds into utilities which are underweight currently. Does this approach make sense for an income investor?

Read Answer Asked by Steven on January 25, 2023

Q: Thank you for your report yesterday on month-to-month inflation, which I found very useful. Is month-to-month inflation something that you have been reporting consistently, or would you consider reporting it from now on given the focus at the moment?

Read Answer Asked by D on January 25, 2023

Q: Hi 5i Team!

Respecting you don’t have a crystal ball and going on general wisdom that the markets like to look ahead.

How much of the full impact of rate hikes has been priced into the current market?

There is another (maybe last one?) almost certain rate hike coming for both the US and Canada, should we expect more volatility from this announcement or is for the most part already priced into the market?

Thanks for all you do!

Read Answer Asked by Wes on January 23, 2023

Q: Hello Peter and Team,

We are celebrating the start of CPP and OAS this year. With that in mind we have to think about RRIF in 7 years, investments , bonds, and GIC's in our RRSP's. We also have a small TFSA for higher growth stocks. With that said, it is time to retool our investments. We have not been a fan of bonds for over 10 years though we are open to bonds now. .

Which mix of CDN/US/Foreign Bonds, GIC's, and top 10 stocks would you recommend for RRSP's if you have a clean slate with a 7 year outlook.?

Thank you so much for your service. It is the best site by far for advice, CDN portfolios, and general questions by subscribers.

Sincerely,
Debbie and Jerry


Read Answer Asked by Jerry on January 23, 2023

Q: I follow most of your balanced portfolio. Other names in my portfolio are ones you recommend highly.
I have 15% of portfolio in VGG, 2% google, 2% NIVDA
The rest is in Canadian equities and I am looking for advice for percentages in each sector..
4% Materials
7% Consumer Staples
6% consumer Disc
18.5% Financials
19.5 % Industrials
22.5% Tech
6% Utility
7% Energy
If you look at my percentages of Canadian equities please indicate areas I am too high in and areas I need to increase my exposure in.
I realize this question may take a little time. Please take as many question credits that are needed. Thanks for your excellent service over the years.
T Steve

Read Answer Asked by Stephen on January 23, 2023

Q: Hi there,

I've been reading up on the US vs International stock cycle as of late. It appears as the cycle of under and over performance tends to happen in cycles. Obviously no one can predict the future, but do you think International will outperform over the next few years considering where are are in the economic cycle, rates, valuations etc? Can I please have your thoughts?

Thanks!

Read Answer Asked by Michael on January 23, 2023

Q: The market has been trading for 14 days this year - what has the market indicated to you? Clayton

Read Answer Asked by Clayton on January 20, 2023

Q: Hi 5iResearch
Is there a sector rotation happening now in the market?
If no, do you expect any sector rotation in the foreseeable future?
Unless the answers to both questions are no, can you please identify these sectors (favourable, unfavourable)?
Thank you,

Read Answer Asked by Ahmed on January 20, 2023

Q: In many cases buying the top 3-5 stocks of an index gives a better end result than the whole index since you don't have to drag the less performing.
1-Do see the same apply to the S&P500?
2-In a 3% (normal?) fed rate what is the normal multiple for the S&P500?
3-What is the current forward PE for the S&P500?
4-How does this apply when the top 5 holdings are technology with higher multiples than the banks and oil companies?
Many questions but one goal, trying to put the dry powder in an optimal manner.

Thank you

Yves

Read Answer Asked by Yves on January 20, 2023

Q: Hello 5i,

A general market question.

Seems a though the next “wall of worry”
to climb as inflation is receding is going to be the potential debt default of the US government. I think they will be extending the debt repayment for as long as possible into the summer/fall, but ultimately I believe a refusal by US congress to increase the debt ceiling to be very credible this time around.

Would appreciate your thoughts and how best to position a portfolio for the worst case scenario?

Read Answer Asked by GREGORY on January 19, 2023

Q: May I have your thoughts on the USA’s debt ceiling? There is speculation in the press that the most conservative elements (called the “Freedom Caucus”) inside the Republican Party will refuse to raise the debt ceiling without drastic cuts to the country’s chronic budget deficit. In a worse case scenario an impasse will cause government bonds to default. The caucus is quite small but seems to have a large influence over the Republican Party due to its very slender majority in the House Of Representatives. I will need to take some money out of my RRIF this year not covered by the RRIF’s dividend income. Do you think I should be selling stock now or to put it another way will a government bond default is simply not realistic? After all it would take only about 10 Republicans to vote with the Democrats to raise the debt ceiling.

A bond rate spike is typically bad for gold prices but in this case might be positive for gold. Do you agree?

Any thoughts you have would be appreciated.
Jim

Read Answer Asked by James on January 19, 2023

Q: Hi group I am out of credits...Hopefully you can give me some guidance on how to play China opening up from Covis restrictions. Commodities and oil seems to stand out if you agree what companies have the most potential upside. Also looks like big tech is another beneficiary if you agree what is your top picks in this sector as well. Thanks for your goodwill service it much appreciated

Read Answer Asked by Terence on January 18, 2023

Q: Do you think the prospects of investing in Emerging markets funds is improving? Are they going to be better performing compared to developed markets? Does the rising interest rates impedes their progress?

Read Answer Asked by ZIM on January 17, 2023

Q: Bond market drives the stock market.

I keep hearing this message. Would you please provide a explanation of why this is the case ( if you agree) and how this works. And WHO are the drivers of the bond market.

Thanks as always.

Read Answer Asked by Donald on January 16, 2023