Investment Q&A

Q: How do you see these companies perform in a rising interest rate environment?

Q: Is there a reason for the selloff today.
PB

Q: When higher interest rates eventually actually happen in the US, what do you think the initial reaction will be for semiconductor stocks? Will the first reaction be a dip, or perhaps they might move higher?

Are there any other events, such as an invasion of Ukraine, that you think would significantly impact the semiconductor stocks in the short term?

Q: Hi guys: If stagnation did appear later this year, what would be your top 5 U.S. and Canadian stocks?

Q: Hi Everyone at 5i! Me again. With your crystal ball on the table , how do you anticipate our Canadian dollar doing over the next few years?
Cheers, Tamara

Q: Hi All at 5i! Was the market run up in 2021 in anticipation of the pandemic being over, now contracting because the recovery is dragging on? Cheers, Tamara

Q: Hi Peter/Ryan as an investor and not a gambler who's tried to make a buck over the years doing what's right, investing in good companies having a properly balanced portfolio to not risk loosing it all, what chance do we have when this Jeremy Grantham comes out and makes a statement about the stocks collapsing. That alone can cause people to panic and sell, no? Thanks, Nick

Q: Re your response to John, January 17th, you answered "it's hard to beat a single great company that compounds year after year".
Could you please recommend 5 Canadian and 5 US companies that fit into said catagory that have declined recently due to the tech sell off, and represent a good buy/nibble point,
Please include a mix of larger e.g CSU and Google, along with more recent up and comers e.g. Shop and Roku, which seem to be among your most obvious favourites.
Thanks Peter.

Q: I read a lot about the Market online and through the media and I am seeing numerous who have claimed to have predicted such downturns as the 2008 and 2020 and who are saying that this one will be 30% plus before the end.

There have been a lot of downgrades lately and most recently being AMD and XPI. What is your take on this?

Thanks so much and hoping to get some insight into what is going on now.

Q: Hi 5i Team,

Jeremy Grantham in an interview on Bloomberg said he is certain of a coming crash in financial markets. Given the fact that he has been right in calling the Japanese bubbles in late 80s, the tech bust in 1999/2000, the housing bubbles in the States in late 2000s, I would like to get 5i's take on his call.

(I understand that he has been a shrew investor for 50 years and a crash caller for just as long. I suppose if you keep calling for a crash long enough, eventually you're going to be right on a few occasions. Just my thoughts).
Cheers,
H

Q: The market has been weak since the start of the year with the NASDAQ down over 10% from its November high. I don't own any not profitable tech, but I do own Shopify. Seems like the market is fading into the close the last few days and can't sustain a rally. Does this suggest more downside on a waiting pattern until the BOC and FOMC meetings next week. If history serves, it seems like these tightening cycles always overshoot in anticipation of the start and then settles out a bit. I guess the big difference this time is inflation and whether it moderates or forces the Fed to keep tightening. Thoughts?

Jason

Q: I am a little embarrassed to admit that I am in all tech and growth companies. The rhetoric now about the interest rates, the war activity in Ukraine/ Russia, Threat of invasion China to Taiwan. Inflation and other factors that create the current environment. The question is boiled down to when do we see big tech i.e. MSFT, Tesla, NVDA and little tech : EGLX hit bottom and make gains again? CNBC Tom Lee Fundstrata says first half is volatile and choppy and the second half of 2022 we see gains and steady improvement. How low does the Nasdaq go before a upwards turn?

Q: What be the short term impact on the TSX of an actual physical invasion of the Ukraine by Russia. I find that the markets seem to be ignoring this real possibility in the near future given Russian influence in the worlds energy market.

Edward

Q: I get that there is money moving out of growth (tech) and into other areas of the market. However, all the mentioned names here have CAGR of > 25% amongst other great fundamentals (free cash flow, equity,...). So long as fundamentals don't change, I can't see any reason to sell - only to add to these names on this opportunity. So long as business grows (and >25% is huge!) all these should be winners in the long term, no?

I've experienced significant whiplash with most of these stocks but am optimistic that with a longer timeline I should be okay.

I'm hoping for two things in your response:
1. Giving me comfort that my thinking is correct and if I hold on I should be okay, and;
2. Of the list, the one stock you would add to today.

Thx for the comfort,

Cam.

Q: Question about Disruptors:

I am concerned about disruptors negatively affecting the future safety of my Canadian dividend portfolio that I have built for retirement - mainly blue chips. I have a long term view, and invest accordingly. Here are my concerns:

Banks (their high fees vs Fintech)
Utilities (eg. Tesla Energy Ventures)
Energy, Pipelines (EV's)
Insurance (Autonomous Vehicle reliability, companies increasing Human Longevity)
Telecoms (Cable-cutting)
Railroads (Autonomous Trucking)

Telecoms seem to be jacking up the cost to the customer for their internet service substantially to compensate for lost cable revenue, so maybe less to worry about there.
I know that it will take time for some of this to play out, but I read articles on disruptors daily, and some of this seems to be evolving quite quickly.

I am looking for portfolio diversifiers. Besides some disruptor ETF's I also own NTR and TECK.B which seem to be less apt to be impacted. I also own ATD, assuming that their change-over to charging stations will be successful. Other than Canadian Tech, what other solid Canadian companies would be good picks that perhaps may be "less impacted" ? FSV for instance ?

Also, if you have an alternative view on this, I certainly welcome your opinion.

Q: I've always been a buy and hold type of investor, and I consider my portfolio well-balanced. However I am wondering if there is some merit in moving some investments around, the way large institutional investors do, in times like these. For example would it be ill-advised to move say 20%, or even more, of current tech and growth investment money into the stocks that are more in favour now, such as financials and energy etc. So the idea being to weight the portfolio toward the stocks in favour, rather then just staying the course regardless of what the market does. Thank you.

Q: Over the last 50 years or so which governing party has been most favourable to the S&P 500?
Republicans or Democrats?

Q: I'm entering retirement and won't be adding much more new capital to savings and so capital preservation is paramount as I look at drawing down phase in the next 6 months. Right now I am still heavily exposed to the markets with about 85% equity exposure. I want to increase the amount of safety but am concerned with the loss of purchasing power and feel the old 60/40 rule isn't adequate anymore. The big dilemma in today's environment is that there really aren't a lot of alternatives to stocks for keeping up with inflation, but this involves capital risk. What balance do you think is more appropriate in this environment? I'm thinking around 75/25 while trying to keep around 12-18 months of expenses in high interest savings so one doesn't have to sell into a down market.

Are you aware of products offered in the market that may provide returns of 5-8% while being "fairly" safe for the capital invested?

Any suggestions on perhaps bond funds that offer returns that will at least keep pace with inflation after fees without undue manageable risk for capital safety?

Looking for any ideas..preferred shares ETF's? (know there is still some capital risk here). Thank you for your help and input.

Q: How do we as investors gauge "capitulation" in the markets. Would you say we are getting close in certain sectors i.e. technology. Thanks for your insight.

Q: As with many of your members, im considering some portfolio adjustments and deployment of TFSA contributions to start the year.

What names in Canada and the US are you most excited about in 2022/2023 that you view as meriting consideration?