Investment Q&A

Q: There was a report from CIBC strategist titled " The Benefit Of Unhedged U.S. Equity
Holdings Is Moderating" due to persisting weakness of USD and the likelihood of USD remaining weak ( and decline more over time ) against CAD and other major currencies, as a result of Trade/Protectionist policies of current administration, for next 2-3 years.

The report also noted that traditionally CDN Mutual Funds, holding USD securities, were mostly rewarded due USD strength historically against CAD, resulting in superior performance in CAD terms. Also, CDN companies with sizable business in USA, also benefitted, as they report in CDN.

We noticed this in our USD Investment Portfolios, where YTD performance was lower by 7-8%, when converted in CAD, compared to its USD performance.

So, it's a two part question.

1. What is your view about about the weak USD thesis and whether it's always best to leave the USD stock portfolios, as is, since over long period of time, currency fluctuations cancel out to a Neutral.

2. If you concur with the CIBC strategist thesis, what are the possible options to Hedge the USD positions, for a Canadian retail investor ? ( Considering, MF portfolio Managers have access to sophisticated options )

PS: Since 5i team, manages a large fund of USD small cap, it might be specially interesting to have your thoughts.

Thank You

Q: Hi

Is now a good time buy some USD for my portfolio or wait?

Thank you!

Q: Do you think if US tax gets approved then lots of international investors would sell off US dividends stocks or it would impact all the US stocks.

If there is impact do you think international investors would move to CDN or Europe or which markets they would invest.

Thanks for your great service

Q: I’m trying to understand the impact US tariffs - and in particular tariffs on steel and aluminum - could have on our economy and certain companies. Tariffs make goods going into the US more expensive which means US costs increase. These costs a would normally be passed on to the purchaser or the purchaser would look to a new, cheaper supplier. If the US can’t produce enough of their own steel and aluminum and since this new tariff affects all countries doesn’t the US still have to buy from Canada? Excess capacity in the US could make up the difference but is there that much excess capacity there? And for something like potash which I think is irreplaceable don’t tariffs on that product just harm American farmers?

Appreciate your insight!

Paul F.

Q: I have read a synopsis of the recent Ray Dalio book, a guy who has a solid reputation in world wide financial circles. He sees 3 years max at the current rate of spending until the a U.S. hits a wall and serious defaults begin to happen,and the U.S. dollar gets hammered.I have no confidence that Carney can make any positive moves here in Canada to improve the economy . He showed his hand today. Everything will come back to his climate change issues, and dealing for years with native tribes, which will stall investment,and retard any hope of significant positive change. So, as an aging senior where do I go to best protect my capital here in Canada…..Gold, bitcoin, Swiss francs ?I’ve been a market investor for 55 years. Seen pretty much everything. I’m wondering if this time it really is “different”.
Thoughts?

Q: this breaking news from last night caught my attention - tRUMP does not have authority to impose sweeping tariffs against Canada and other countries, rules U.S. court
what will be the outcome of this for the US stock market???
but the US Supreme Court could over rule this over turn the lower court ruling as the majority on the Supreme Court favour tRUMP
Is it a time to but US stocks???.......thanks for your insights ...Tom

Q: There's been a lot of noise lately about widening bond market spreads and their potential implications. From your perspective, is this a meaningful early signal of broader market stress and if so, how might it impact public equities in the months ahead?

Appreciate your take.

Q: Given today's unsettled economic atmosphere, which investment sectors would you favor and in what proportion?
Many thanks for your stellar service!!!!!!
brian

Q: Curious how you think the dollar will do this year? Is it time to take some of my US ETFs and buy the CAD hedged version?

Q: My question is on portfolio management, trimming rather than selling.

I'm hearing and feeling that some sectors and companies, or even countries like the US market, are a bit expensive, ahead of their skis, and might well be trimmed. I have done so for gold, for example.

I would like your opinion. Even if you don't agree with the premise, what areas would you trim on that basis.

Lastly, can you suggest some areas that do not fit that premise and are under-valued. I think this of oil and gas, for example.

I'd be grateful for a detailed answer on this and would be happy to spend a few points for it, as you see fit.

Thanks, as always, for your wisdom.

Q: How serious do you feel the aggregate global debt situation is? I have read that the total is now well over $300 trillion USD. Government and consumer spending seems somewhat out of control in much of the world. Let's put it this way -if the Earth was part of an interplanetary federation, would the aliens' financial authorities think we are heading towards bankruptcy?

Q: A lot of talk that the Private Equity market is a bubble about to pop and cause deep challenges. Any thoughts? Jamie Dimon very vocal about stagflation and again, a pop perhaps likely to occur. Any comments and insights would be welcome.

Q: Just read this in Globe and Mail - Canadian individuals who own U.S. securities directly are subject to a 15 per cent withholding tax rate under the current treaty. Under the new bill the withholding rate could ultimately rise to 50 per cent.
If you were me, what would you do???......tom

Q: Hi
How is Section 899 of the proposed U.S. 2025 tax reform expected to impact Lumine Group (LMN) in the short and medium term, particularly in terms of tax liabilities and profitability, given that it is a Canadian company operating in the U.S.? Do these potential impacts make LMN less attractive as an investment at this time?

Q: Hello 5i,

With the USA facing a Trumponomic meltdown, do see an advantage of purchasing CDR's for US stocks today?

What is the recommended % of a portfolio for Canada, USA, Europe, International, and Emerging markets. It looks like a little more global diversity may temporarily dent impacts from USA rhetoric and threats.

Thank you
D&J

Q: Where do you see US Treasuries going over the next 6-12 months, given recent weakness due to massive American debt. Is it a reason to exit US assets, including stocks, or do you see the problem resolved somehow? Is it a simple case of the US Treasury Market simply being too big to fail? Welcome your insights. Thanks as usual.

Q: We have experienced a nice rally in spite of the traditional chaos associated with equity investing. I am thinking I would like to take some risk off but need to balance the portfolio income generated vs rrif drawdownn. Thinking I should reduce the Cdn Market ETF ( lowest income generator) and retain high yielding defensive generators. I know increasing cash level generates lower income still. What are your thoughts moving towards more preservation with this strategy.

Q: The TD chief economist is predicting a recession for Canada, and is also concerned about stagflation. What are the best investments for our protection?

Q: I have a question prompted by recent headlines (sorry, a rather unsophisticated view of investing).....there appears to be ongoing negotiations between the USA and Iran, with a suggested that some sort of agreement can be reached on nuclear stuff, with the result that Iranian oil will no longer be sanctioned. Some commentators talk about the oil market being flooded with the world price of oil dropping significantly. Do you see that drop in price as very likely? Wouldn't that bring the stock price of Cdn oil producers way down? Is it time to dump shares in oil stocks (I am under water now and this would only get worse). Many thanks for your excellent service.

Q: Hi 5i. Question #4 from me as a new subscriber. I continue to have about 70% of my savings in cash with plans to input through dollar cost averaging. A couple of weeks ago you suggested a spread over 6 months. Is this still your view? It seems that the rebound has taken place and I am worried about missing the increases. But I know we are still in an uncertain market. Thank you