Investment Q&A

Q: What are likely to be the most durable investment themes for the next 5-10 years or more, and what would be the best ways to play them?

Q: what % allocations by sector is 5I recommending for a balanced portfolio in 2024

Q: There is a lot mentioned about digital currency being adopted by central banks - last heard to-day on Michael Campbell's show, Replacing fiat currency? In which case the central banks and by extension governments or their agencies would be able to control what we spend it on and monitor us in terms of their political agenda - a good example is this climate change fiasco whereby they use it to tax us. What do you think the mechanism would look like to replace fiat with digital? And, how would gold pricing be affected - increase demand and thus the price?

Q: May I ask a follow up to my using a 20DMA as a potential entry point for a stock purchase. I picked the 20 day average because when members ask for suggested entry points you seem to respond with values within 2-3% of the current stock price. I agree a 50 day average has more of a margin of safety, but seems to be more value oriented and the stock may never drop that low within a shorter time frame. Thank you

Q: Regarding the question asked by kel today re ranking the sectors can u give a brief rationale for technology industrials utilities financials and healthcare

Q: PSA


i find it funny that the media fawns over these great companies; gushing over their collective 2023 'huge gains

never mentioning that 5 of 7 haven't even made it back to their 2021 price

so those unlucky enough to have bought at the last euphoria (fall 2021) or almost breaking even

(and yes, i agree these are some fabulous businesses)

good luck

Q: I have a friend who wants to start investing at a regular frequency (every weeks or months) to avoid bad trading decisions but he is a bit reluctant to start investing in the S&P 500 since it is almost at all time high.

What are your advices in this case?

Q: Looking into your crystal ball, can you please rank the 11 sectors for expected performance between today and end if 2024? No rationale necessary.

Q: How things change, 6 months ago or the past year, so many questions on where to deposit money for a 4% yield, than the market goes up nicely and no more questions on money markets. Now i suppose those that missed out are now trying to catch up at higher stock prices. Once Again buy good stocks with earnings and stay invested.

Q: There is so much buzz in media about the Magnificent Seven- the latest grouping that alleges dominance from these mega cap leaders and how 2024 is likely to see them fall from grace at least in momentum rallies, or at least in contrast to others.
Don’t support this assertion, ie is there relative price and growth rate relative to others such that they are due to get leapfrogged, or worse decline? I feel like this same line has been towed for several years and look at five and ten year growth rates for any of these as examples.
If you had some chunk of change would you lean here or elsewhere, say to financials or industrials?

Q: Your thoughts on the S&P 500 over the next few quarters? Is the risk/reward in favor of stepping into both spy:us and spgp:us in equal proportion's. Or continue to collect 5% from money markets for a couple of quarters. Is the P/E for the spy and sogp all ready pricing in the profits for the year? Would you prefer spgp over spy or would you have other considerations? It looks like spgp has been outperforming spy.

Thanks
Brian

Q: Seems to me finding stocks to create personal wealth over the long term is not that hard if a bit of effort is put into it, could be said all you need is common sense perhaps. Also seems to me the most common mistake for small diy'ers would be portfolio management, the buying and selling mostly, tax planning perhaps to a much lesser degree. 5i has provided many many good ideas as a long term member over the years, a few loosers too - dont want your head to swell too much. 5i deserves much credit to my success, thank you very much. Your investing ideas have provided several opportunities, I feel it's the portfolio managment skills you've taught me that was more important to create wealth. All that being said, could you expand on this remark you posted today, "we tend to leave some (minor) room to add if opportunities present themselves in the future" ?

Q: Hello Peter,
I will greatly appreciate your thoughts on my thinking process as I construct my portfolio for this year. I would like to know how closely your thinking aligns with mine and what would you do differently.
I am a retired senior, not risk averse yet mindful of the necessity to curb excessive enthusiasm. I like to think I keep the risk to reward tilted towards the latter.
My thinking goes like this. I expect the Canadian economy to go through a mild recession or at best ride the US economy to <= 1% growth. Hence, I want to allocate 30% Canada and 70% US (including marginal international through ETFs).
I feel that since interest rates have peaked, the stock market should return higher than historical average this year. I think the allocation should be 20% income, 25% balanced, 30%growth,10% investor suite and 10-15% trading opportunities. I think that automated AI/technical based trading software will have a larger presence, making the market a little more volatile and provide with trading opportunities.
I also think that more interest rate cuts in Canada than the US, the income portfolio should be all Canadian. High yielding stocks should provide capital appreciation as well in this environment.
I am not considering Shopify and CSU as part of a portfolio. I already own them and they are qa significant part of my assets. Any adjustment will have significant tax consequences. If required I will take decisions independent of the portfolio.
I look forward eagerly to your feedback.
Regards
Rajiv

Q: A question regarding interest rates and the effect it has on income stocks such as those in the Income Port.

Much is currently being hypothesized about interest rates going forward. Not about higher or lower, but the amount of cuts and how long it will take to get to a neutral rate.

That being said, if rates were to drop by 2% over the next year, and all else being equal, maening no black swan events or a deep recession, to name a couple, what correlation would you assign to stocks which have been beaten up during the 4.75% increase to the BOC rate? A 2% cut in rates is a 40% reduction, in the rate.

I assume that with falling interest rates, money would flow back from savings accounts, GIC's and the like. Stocks like BCE, T, ENB and the banks and utilities or any that are currently yielding >4% should see some attention, no?

Thoughts?

Thanks,

Kelly

Q: Understand that crypto is outside of your coverage universe, I am curious to hear your thoughts on Bitcoin as an investment.

How viable is it?
Do you see it appreciating in value over the next 5 years, and if so, would you expect above market returns?

Lastly, for an agressive investor (with the clear and unequivocal understanding that huge losses can be Incurred), what would seem like a reasonable portfolio allocation, in terms of percentage, to BTC? I was thinking 10%.

Thank you.

Q: Everyone, what did you learn at the end of the first week of trading? Clayton

Q: Market timing for investing in QQQ. Is this the good time to get in?

Q: Do you think there will be a dip first week of January when people take some profits and don't have to pay the taxes until 2025? Should one sell some stock if they're in registered accounts next week and take advantage of this?
Thanks

Q: As a general comment; I have noticed that you quite often end your answers to questions on commodity related stocks (especially energy) with ‘If sector exposure is desired’.

May you expand on this caveat? From what I gather, 5i is generally averse to the commodity sector. Are my assumptions correct ? Thank you for clarifying.

Q: Everyone, large cap tech stocks have had an amazing year. So going into next year and next year, will managers sell some and redeploy cash or sell lots and deploy cash or will they keep there current amounts hoping for an average gain next year? If they sell this will put a downward momentum on the Nasdaq 100. Clayton