Investment Q&A

Q: Markets in general. Andrew McCreath is stating that markets are over priced and "agrees with the OECD that the valuation accorded stocks has gotten ahead of the fundamentals". Is it time to sell or at least be extremely cautious at this point?

Q: Hello, my question is about an article I read in CMS. Bill Gross says investors need to watch only one number in 2017 to figure out what returns are going to look like across the various markets, and that’s whether the 10-year Treasury yield crosses the 2.6% mark. As of today the 10-year yield is 2.48%. "If 2.6% is broken on the upside...a secular bear bond market has begun," Gross said. "Watch the 2.6% level. Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important than dollar/euro parity at 1.00. It is the key to interest rate levels and perhaps stock prices in 2017."
So my questions are, what will happen if it crosses the 2.6% mark? Does this mean that the yield on bond ETFs such as XBB and VSB will increase? Does this mean that this will be good for the stoch market in general? What is a secular bear bond market?Regards, Gervais

Q: Place(s) to park some cash in Cdn funds (50K) for a short term hold to ride out potential volatility & recently talked about possible market correction?
Ted

Q: I noticed on your macroeconomic card that inflation rate is higher than gdp growth. What causes this and is it something that can continue over the long term ? Thank you.

Q: Hello 5i team,
Your article on hedging for a market downturn is quite timely; thank you.
A 5% or 10% correction is not too worrisome as it could be recovered in a relatively short period of time.
I do not foresee a "black swan" event; do you? In my opinion, the current steepness of the yield curve does not signal the eventuality of such an event.
Regards,
Antoine

Q: I have been considering moving to a larger percentage of cash (60-70%)
My concern is that with the proposed tax plan due from Trump next week that the market is thinking one thing and if it does not line up with what is proposed that we will see a dramatic fall.
Can I get your thoughts please.

Thanks

Q: The high markets seem poised for a correction, do you think moving money into CLF, CBO, or any other bond ETF is a good way to go. Maybe ride out the next few months and move back into equities after a correction has taken place? Thanks.

Q: In follow up to my previous question, what sectors would you consider adding for diversification? And also your reasoning why.

Q: Hi guys,

Just wanted to know your thoughts about EMH and active investing. We all know that fees are a huge drag on performance; but interestingly, an old Globe article by George Athanassakos argues institutional factors like hugging the index are the main factor for underperformance.

http://www.theglobeandmail.com/globe-investor/investor-education/real-active-management-is-worth-the-price/article26874608/

Would there be an advantage in returns (not including fees or commissions) with following a disciplined 100k model portfolio versus investing 100k in a traditional 300mil fund with the same holdings? I suppose inflows and outflows would be a major factor as well.

Thanks for your opinion.

Q: Hello! Do you think it's better this year to put new money in US or in Canada ?
Thanks for the great service !
Martin

Q: I know its just a short time into the new government in US, and we are so closely affected by US economy, I wonder if you can recommend sectors for buy sell or hold yet. Should I hold my cash for more tranparency?
Thanks

Q: Gary's question regarding the border adjustment tax 9BAT) on oil reflected my concern, as well. Presently, Canada ships 3.5 boe and Mexico is at about 800,000 so energy independence seems well down the road. If there is a BAT, some have said gasoline prices in the US will rise proportionately. I don't understand that conclusion. Canada only gets $40/barrel and Mexico $46. They can't raise the price to cover the tax so does that mean US recipients will get less and then raise prices to consumers?
Thanks.

Q: With trump's policies I expect rising inflation. What sectors/investments would do well in rising inflation.

Q: What is your call on CAD in 3 years from now? I meant long term(in 2020) where CAD would go?

Q: Looks like us financials are losing steam / as is the US currency against the Canadian $ I have some profit in US financials would you take the $ and run or wait?

Also what do you see for the US $ against the Canadian currency going fwd especially after Trumps comments today that the US $ is too strong ? - I under that this is 2 questions thanks as always for your insight

Q: I saw a report today that the Republican GOP is planning to introduce a bill to reform (lower) US corporate taxes that includes a so called "border tax" on all imports. Some talking heads have commented that if it becomes law as currently written the US dollar will see a big increase (as much as 25%). Have you heard about this and do you have any comments? Is it time to overweight US holdings to hedge against a currency increase?

Q: Please mention sectors you feel should be over weight in Canadian and US markets. Intuitively, in expanding economy I would pick Consumer Discretionary, Industrial and Technology. You may have different answer for Canada and US.

What proportion of portfolio should be in US stocks.

Thing you

Q: Is there a link which will provide the return & total return of TSX & S&P500 for each year? What are the numbers for 2016?

Thanks and all the best in 2017..

Q: is there investments for the Canadian markets that take advantage of volatility ,should the incoming US administration do some things that start to take down the TSX ? Thanks and have a super 2017

Q: Some economists argue that as debt to GDP ratio rises, it reaches a certain point when further fiscal stimulus will have little effect. Debt can be measured as Government Debt or Total debt (Government, Corporate and Individual). David Rosenberg in his New Year musings about the way things might be going in 2017, (a rare freebie for cheapies like me who don't pay for his missives) uses nonfinancial debt. How is "nonfinancial debt" defined, pray? Happy New Year and many thanks for your help again. Henry