Investment Q&A

Q: Morning Peter and Team,

Would you please shed some lights on what both the Canadian and US markets were like during periods of high inflation (touching double digit) in early 1980s.

Also how do see the markets will react now if inflation continues on its current path of 4 to 5% annually. Please name sectors that would benefit from relatively high inflation and sectors to avoid.

Cheers,
H

Q: Hi Peter.

Many of my and other high growth stocks have taken a beating. Many of them down more than 50-60% plus off their highs. However, the DOW and the NASDAQ don’t seem to have taken a tumble of that proportion.
My concern is that if this is truly a “bust “ as some pundits are calling it out to be and the indices like the S& P etc are due for further drawdowns, that could result in these hard hit high growth stocks going even down further.
In simple terms, how does 5 I see this playing out.? By stopping to taper, is the Fed creating another bust as they shore up liquidity?
Thanks

Q: So, it looks like the US has expanded their money supply (M2) by 40% over the last 18 months. That's 40% of all money "printed" since 19681 Firstly, that seems like a terrifyingly huge expansion and I'm hoping I've got it all wrong, but if that is the case, it would seem the amount of money floating around the system needs to eventually find a home which would likely lead to a significant bull market for quite some time.

How would you interpret the mid and long term effects on the stock market as a result of the most significant monetary expansion in the history of the US? Have we seen the bulk of the effect already baked into the market?

Q: Should investors be concerned about the current valuation of most companies in the stock market? Investors like Michael Burry have been warning about the consequences of overvaluation in the markets. Thanks

Q: When the 2009 financial crisis hit, governments used significant fiscal stimulus which set off a huge bull market.
My questions are:
1) how many years of a bull market was this responsible for?
2) should we expect a similar bull market duration from the 2020 market crash and resulting stimulus due to Covid?

Q: High inflation numbers have come out--what do you think? Do you believe we are entering a higher inflation world, and if so, what (i) sectors and (ii) specific stocks would you emphasize for that? Thank you!

Q: I use XIT as my technology proxy and NNRG as my energy proxy, both in my TFSA. My current thinking is to trim-add around core positions to meet portfolio asset allocation targets.

In general terms, what does your crystal ball say about future performance...1-2 years out? Eric thinks energy could double. What do you think technology (XIT) will do...lately it seems to be around the 30+% for a 5 year average? Just trying to ballpark their relative potential performance.

Thanks...Steve

Q: Dear Peter and team,

I know from your previous answer to my question and others, you believe in momentum as an important factor in investing.

Do you think the recent price action in the energy and Gold sectors are real and sustainable? Do you think they have the momentum and the legs to go for some more time, say a year?

Gold has hit 1900 before but really hasn't gone beyond 2000+ in a sustained fashion. Plus Bitcoin is here to stay?

Q: Hello, I have 3 questions:

1. What do you think about CTS Third quarter report today?
2. What do you think about TMD company?
3. What do you think about simultaneous breakout in gold and USD?

Q: Hi, Peter

Rates are going up. One of these days, we are going to wake up and hear the news that rates have gone up and we're all going to say, "Oh, geez, I wish I had done....X",

What's X? What will we wish we had done before rates start going back up?

Appreciate your thoughts on this atypical question.

Robert

Q: Hi,

What would be the implications of China waging a war on Taiwan on the markets..US and others may jump in too ..Chinese seem to stocking up groceries and other essentials..
Do you think slide due to Chinese real estate and the country’s policy to tech companies likely to continue and what sectors do you think will be most affected. Thanks for your insight.

Shyam

Q: with the infrastructure bill passing what companies would you recommend as being in the best position to benefit.

Do you feel it might be better to be in infrastructure companies or stay with high growth companies in technologies.

Thank you.

Donna

Q: Hi 5i,

From all three of the model portfolios, which consumer cyclical defensive stocks are under valued?

Tks.

Q: It seems to me that going forward inflation worries are real. Assuming my thesis is correct, I have read that one way for investors to protect their portfolios is to buy companies with "pricing power". What exactly is pricing power and can you give me a list of Canadian and American companies that currently have the most pricing power.

Q: It seems like a lot of analysts are talking about a resource bull market especially regarding the inflation/stagflation discourse.
Do you feel we are heading into a resource bull market?
And, are there certain sectors you favour - Oil/gas, copper, uranium, food, precious metals?
Finally, are there any stocks within this very broad resource sector that you think is a standout. Please take as many credits as necessary
Much appreciated

Q: Would you please comment on the current use of ai and how it effects stocks ,especially with concentration of wealth.

Q: Hi 5i,
I wonder if the market is (and will continue) reacting quite negatively to the new federal cabinet, out of a belief that economic growth, national self sufficiency and real prosperity for Canadians is not currently high on the list of government priorities. Nothing can hinder economic health like obstructionist government policy and I sure see lots of that in Canada these days. I'm feeling like I should concentrate hard on moving as much as I can into US and international names.
Would you say I'm overreacting to what the next 18 months to 2 years (the usual life span of a minority government) might bring to Canadian business? Are there sectors that are likely to thrive during that period, other than maybe the banks, do you think?
Thanks for any insight you can offer.
Peter

Q: May I please have your thoughts on the current Canadian dollar strength,
and whether you think it might be timely to convert funds to US dollars?
With my portfolio currently weighted about 25% in US currency I'm finding (as usual) multiple and developing opportunities in the US, but with the larger Canadian component significantly in cash. I'm not sure how deep an exposure to the US dollar should be reasonably targeted.
Thanks in advance for your opinion.

Q: For the last 11 years - I have been investing in Canadian companies with a track record of dividend increases. I have been a 5I member for most of those 11 years and you have always provided very insightful guidance - Many thanks!

The strategy has worked pretty well and is very tax efficient owing to the Dividend Tax Credit. Recently there has been alot of political talk about "taxing the rich" particularly vis a vis the capital gains inclusion rate - with less - but still some talk about elimination of the DTC. ("Rich" of course means anyone with any taxable holdings at all).

Aside from the obvious impact on my tax bill if the DTC were reduced or eliminated - I worry that there would be huge impact on the Canadian market. What are your views on the likelihood of a change to the DTC and would you expect a large impact on the stock price of Canadian dividend payers.

Thanks!

Q: Hi
with inflation rising what sectors should we consider being in and which should we avoid

Thank