Investment Q&A

Q: Hi 5i,

Will the China Evergrande Group crisis will be causing the US and Canada market in big problem? If there is any, which sectors will have most affected. Many thanks.

Q: In a normal market pull back , where do you see support levels in the tsx and the dow ?

Q: I see the indexes rising inexorably while much of what I follow and should otherwise be supported by emerging policy wallows, from which I conclude that the market is very narrow - that those doing well and driving the indexes are a small portion of the whole. That is very frustrating especially when the outperformers role/function is not clear. Do you think you could address this? From my point of view the indexes simply do not represent the majority of investment sentiment.

Q: Hello team,

This is a comment from Yellen:

a delay could "cause irreparable damage to the U.S. economy and global financial markets."

Your opinion on this article would be much appreciated. How can we protect against such a scenario?


https://thehill.com/policy/finance/571237-yellen-us-on-track-to-default-on-national-debt-in-october

Thank you!

Q: Now that the sale of the Kansas City Southern Railroad is confirmed, what share movement (up or down) do you anticipate in the shares of the Cpr and the CNR? Because a Canadian railroad now owns an American railroad do you think the Government of Canada is more or less likely to approve the joint project of the CPR and the State of Alaska?

Q: Hi 5iresearch team

On a scale of 1 to 10, 10 being certainly, how likely do you think a stagflation scenario will happen in the US economy?

Second question, what types of investment will likely win in stagflation (gold, certain stocks, bonds, real estate, cash … etc)?

Third question: can you recommend 3 Cdn and 3 US stocks that you think will do well in stagflation? Can you please rank them if possible?

Thank you for your great service, I really enjoy reading your answers everyday in the Q&A section.

Q: Owning stocks is by nature an intangible asset. In the event, of lets say, a black swan event such as a cyber threat world wide and all our intangible assets are basically in digital form (as opposed to physical and tangible) what, if anything can an individual owning stocks do, if anything, to make that asset more tangible? I assume the stocks in all your model portfolios have been suggested because of they have been deemed higher rated companies, those more likely to survive any temporary stock market crash. But can we make owning them more tangible or are we fully at the mercy of the Internet?

Q: Hello,

I have been reading about Evergrand in China and their potential default on $300 Billion in housing debt. It's being noted as the Chinese Lehman Brothers.

Do you see any knock on affects to the rest of world economy?
How big can this go?

Q: If inflation does continue can you give names of companies that i may want to hold and company's that i should not hold in different categories? Thanks, James

Q: Hello,
I would really appreciate hearing your thoughts on the EU’s Sustainable Finance Disclosure Regulation, the EU Climate Transition Benchmark (EU CTB), and the EU
Paris Aligned Benchmark (EU PAB)?

I would appreciate your macro view on these and the impacts you see them having, if any.

On a side note thank you 5i for always having such excellent materials. I particularly look forward to reading your blog.

Q: In response to yesterdays "tapering" report, if one is looking to add liquidity in order to take advantage of a resulting market dip, would you consider selling existing positions that have done well in the recent market growth with the intention of buying back in at a low point? I know you often advise against trying to time the market but this seems like one of the few scenarios where it could be in ones interest?

Or would I simply be better off to leave my current positions alone (everything is slated for long term holds) and try to put aside as much cash as possible in the meantime while we wait for the opportunity to buy?

Thanks

Q: What stocks in Canada do you believe will do well with the passing of the Infrastructure Bill and Reconciliation Bill in the USA? Please list in order of preference. Thanks.

Q: Peter,

Bank profits are massively up. Normally they suffer when the interest rate differential between the deposits and loans is as squeezed as much as it is now. What is the big reason for the huge profit jump? Is it simply the loan revenue from mortgage lending, the reversal of prior loss reserves , the wealth management areas or something else?

Thank you

Paul

Q: Was up 30% on MG. Purchased at $84.50. Stayed too long at the party. I still like it longer term. I like the fundamentals. Do you if so why?
I hesitate to average up here. You have better insight on MG than I do. Also in my experience over the years September/ October are notorious months for market drop, I have 10% in cash for purchases just in case. It’s a large well diversified portfolio. Cyclicals make me nervous here.
Roy

Q: Hi, My questions is about the best way to hedge the current market and economy. I have a large portion of my money in the stock market, and I feel things are becoming over extended. I've thought about putting some money in the VIX, however I'm not sure if that's the best way to play a downturn. I'd appreciate if you could give me your opinion on the best way to hedge, in case of a heavy downturn in the market/economy. Thanks a lot.

Q: The data currently coming from Israel and the UK indicate that the vaccine efficacy is waning, earlier than many predicted. Given that most Western countries have employed a vaccine strategy to address Covid, I would like your advice regarding how to position a portfolio in the event of a Black Swan event.

In the fall, we will likely have another flu/virus season in northern US and Canada. Basically, I see 4 possible scenarios of decreasing probability but increasing risk: (1) the vaccine acts as advertised and we have few cases/deaths; (2) the vaccine is less effective than expected and there are many cases, but few deaths; (3) the vaccine is not effective and there are both many cases and many deaths; and (4) as has been suggested by some top scientists, there are long-term risks with these mRNA vaccines and deaths/ adverse events are much greater than if no vaccine was taken.

If an investor has concerns about scenarios 3 and 4 in particular, but is hopeful that such an event does not occur, how should one best position the portfolio. Should one stay fully diversified sectorially and geographically in stocks? Should one consider increasing allocations to gold, cash, bonds, etc? What are your thoughts?

Many thanks for your insightful advice.

Q: what sectors could really be affected badly if interest rates go up significantly? thank you.

Q: What sectors on the TSX are going to be strong in the next 3 months?

Q: Were do you see the US markets going in the next 5 months?

Q: It looks like around Seven AM this morning the Canadian dollar abruptly shot up a more than 1%, thus wiping out any gains I might make for the day. Any idea what the cause was? Any predictions about where the dollar-dollar ratio is headed in the near term? I hold a lot of US stocks in unhedged Canadian ETFs and am now reconsidering the helpfulness of hedged products.