Investment Q&A

Q: On Sunday, PBS Wealthtrack aired an interview with a well seasoned advisor, R. Kessler, who recommended to raise cash as the damage to the stock market will get worse before it gets better due to a severe recession etc. His case made a lot of sense, and I would be interested in your comments on this statement.

Thank you!

Q: Assuming this downtrend will bottom at some point, and eventually recover, in your opinion, which three sectors offer the best chance of minimum damage in any downturn, and the best chance to recover sooner rather than later in an upturn. Could you name and rank (best first), 3 dividend stocks in each sector that you feel will survive the downturn and lead the way in recovering in each of the three sectors. Thank you. Warren

Q: I am an 88 year old, investing for over 70 years, and an appreciative member of 5i since inception. My present objectives include creating capital losses; reducing my formerly 80 stock non-registered portfolio to only those in your Balanced Portfolio; thereby making my life easier so that I do not concern myself each day with fluctuations, and let you make the decisions;etc., I believe I have the following options; 1) Sell all present losers; 2) Henceforth buy or sell only stocks in the Balanced Portfolio 3) Where the 30 day rule applies, buy comparative stocks for the 30 days).. What is your opinion? Do you have better proposals in view of the present crisis? Thank you in advance for your usual consideration and advice.

Q: I have been sitting out this market decline with inverse etfs and HUV. I see the major North American indexes have again broken support and are heading for 2016 levels. 2016 levels would appear to be an important support level BUT the time-frame of the current coronavirus lock-down that could go on, in one form or another, for many months. The Imperial College COVID-19 Response Team in collaboration with the WHO Collaborating Centre for Infectious Disease Modelling and other organizations put out a report on March 16 (available online) that recommends the type of drastic measures we are now seeing implemented globally (social distancing of the entire population, home isolation of cases and household quarantine of their family members, ...supplemented by school, university, and business closures) in order to prevent serious loss of life (2.2 million estimated in the US alone) and huge social and economic impacts. The release of this report is what swiftly galvanized the current global efforts to contain the virus over the past few days. These efforts may seem harsh but are essential to avoid the worst effects of the contagion (as we are seeing in places like Bergamo, Italy).

The report recommends that these measure be maintained (to avoid rebound) until a vaccine becomes available, and that is estimated to take 18 months or more.

Now, we all know markets hate uncertainty. Hence the unprecedented volatility over these past few weeks. I don't see a silver lining yet, except of course the prospect of getting past the pandemic, which is a real possibility now that the correct measures are being taken. Therefore, I don't see a need to buy anything until we have flattened the curve and the markets respond accordingly. Until then we are likely to face further declines (to who knows what levels) with periodic relief rallies. Again, I ask, am I missing something?

Q: When things seem like theyve settled down some, I plan to average down on some of my higher quality (less speculative) stocks. Im also planning to do this around dividend dates since this seems like a good time to compound DRIPS and collect extra shares.

Now, the core of my portfolio is still in a few broad market etfs. Do you think in the recovery that a certain market (S&P500, Nasdaq, DOW etc. - Im assuming not the TSX since Canada is fighting an economic war on multiple fronts) will happen faster than in others? Would you think in the recovery that buying hedged would be better since the US Dollar has been climbing recently? Thanks

Q: Unemployment...

I've heard of an estimate of unemployment going up, as estimated recently by one of the big US banks, can you provide some insight to this?

When are the next figures due for Canada and USA?

Q: On fundamentals (yield/PE revenue ..etc have we reached the levels of 2008 financial crises in particular for banks/utilities and REITS. Can you please explain if majority of REITS in particular residential (eg CAR.UN) would benefit from lower interest rates why are they going down?

Thanks

Q: hi .do you think we will be in an deflationary or inflationary recession.my guess would be inflationary. thanks brian

Q: Larry Berman noted money market levels are approaching highs witnessed after the 2008 crash creating a backlog of buying power, but He also noted that only when that is combined with a vix of about 40 ( currently around 70) will the market give a sign it is likely to turn around. He cautioned any big rebounds now are not a sign the market is turning for the better, we need the vix to come down first. Does this seem logical?

Q: God day Peter, Ryan and team. I don't exactly know why but I'm getting the "sense" we are majorly oversold and we are getting close to (give or take a hickup or two) exiting "Crazyville"... Do you get the same sense?

Q: This market is offering a wonderful opportunity to buy quality dividend paying companies at discounts that seem remarkable. I think this is a once in a decade opportunity. For the long term investor, who wants dividend income as well, this is a gift.

Q: Hi TEam,
I know you don't like making short term predictions. However, Canadian dollar is dropping fast. I have some cash parked and would it be a good idea to convert them to US dollars until things settle down.

Thanks

Q: As we go through this cycle of the economy shutting down, stimulus to keep the lights on, and a restart of the economy... in Canada are we looking at inflation or deflation for the short or long term?
Thanks!

Q: Hello 5i
Could you please compare the ‘87 vs the current crash in terms of depth of declines and the time it took to rebound to precrash levels?
Thanks
Dave

Q: Total insanity ! 2 historical drops in a few days?
Nowhere to hide everything is going down(except cash)even then CDN$ 69.17USD this AM. End of the world is coming according to Mr Market. One question I have: Is this the new norm with high frequency traders and market shorts for economic end cycles?
Your view would be very appreciated!

Q: I hear that those who make covered call ETF(s) are having a problem with the level of volatility. Do you understand what that means and whether that could cause some less liquid ones to dissapear, perhaps under a condition in their prospectus? I suppose black swan events like this one can make complicated products even more complicated to manage. Thank you.

Q: For fun, let’s assume that the markets will be shut down. What would that look like? I assume there would be some warning that they were to close, and that there would then be a lot of selling prior to that. Correct? If they were to close, how long might they close for, and what could we ‘expect’ would happen when they reopened? All very hypothetical, but whatever insights you have would be appreciated.
Also, today I tried to take money out of my personal chequing account, at TD, and they capped withdrawals at $2500 per person, per day. I’ve never had that before. Concerning?
Thank you.

Q: First and foremost looks like the 5i team is working overtime to keep up with all the questions to ensure us members are not waiting long to get answers. Much appreciated! Compared to 2008 are the governments responding faster this time around and is the play book the same or different this time? Trying to see if all of these measures will have the same benefits as before?

Q: Hello team,
With regard U.S fed interest rates cut on Sunday, would BoC follow another 50 points cut soon?
When the markets return uptrend, would index ETF or sector ETF do better?
Thanks

Q: China's economy seems to be coming back. Something I ordered in January has finally been shipped. The streets in Beijing are getting busier and of course the Trump administration seems to have finally taken the threat seriously.
If the current shutdown is successful and the incubation period is 14 days would you think it reasonable to see signs of improvement after a month or so?
Your thoughts are appreciated.
Mike