Investment Q&A

Q: I am a senior and have been a member of 5I since you started. Between us "we" have been very successful!
I want to give back in the form of an endowment to our local Church to continue providing funds for a couple of local charities that feed and provide to those less fortunate! I will be allocating shares to Canada Helps to provide the seed funds, probably 100-200K.
I know stocks would be very difficult to administer, but ETF's less so. Also, maybe they can only do Mutual Funds.
If mutual funds do you suggest MAWER?
If ETF's and using some of your previous correspondence do you continue to to suggest ZSP, XIC, VIU, and CDZ.
Any help you provide would be greatly appreciated as we meet with the Church Staff.
Warmest Regards Gordo

Q: Hello 5i,
largely thanks to you, I have made a fair bit of money over the past few years. Certainly, more than I would have made on my own. Thank you. But, I am thinking that in my mid 70's I should start thinking about preserving it in order to pass it on. I know that stocks are you're forte, but i noticiced that you have been generous enough to give advise on other matters, as well. I will try to make this question not too close to portfolio planning advice and so hope you can advise me. In reviewing literature I notice that people say at this stage in life, we should not be looking out too far. Therefore shortterm bond etf's are best. AGG, which I own, for instance, is discouraged because it goes out to six years and there could be a downturn at just the wrong time. They also mention holding tips, corporate bonds and a GI C ladder. I didn't think that I would need these latter assets. Just bond etf's in US and CDN. I also thought government would be better than corporate, as well, because they would be more secure. Anyway, I hope that at this point in the game you can also dsirect me to the right choices, as you have in the past. Here is a list of assets suggested:

short-term Canadian bonds XSB or VSB Core stable income
Short-term corporates ZCS Slightly higher yield
Laddered GICs (1–5 yrs) GICs from brokerage Guaranteed principal
U.S. short Treasuries VGSH Safe USD diversification
U.S. short TIPS VTIP Inflation hedge
High-interest savings ETF CASH.TO or PSA Liquidity buffer

Q: Sir: What 2 US and Canadian stocks or ETFs do you see most unfairly punished now, and most likely to reward , down the road. Also could you suggest one non US value ETF or stock that cheers you a lot? Thanks-JP

Q: Hi Peter and the 5i Team,

The recent performance of QSR has been quite lacklustre to say the least. If you were buying today, in what order would you buy QSR and its major Canadian peers (AW.UN, MTY, ans BPF.UN)?

Thanks for your valuable insight.

Q: what is the annualized return of SPY, QQQ and XIC over the last 20 years. I thought I read an answer where you said the S&P only was 2% including dividends which seems too low.

Q: How does the BBB affect Canada?

Sheldon

Q: The US is on the verge of approving the BBBill which, according to the CBO and other analysts, will add massively to the US debt. and commensurate debt service questions.I know that we have fretted for decades about US indebtedness and it's been an ongoing nothing burger as the US keeps chugging along, leaving Canada and other markets in its wake. However, this time, the debt charts forecast skyrocketing debt, not a gradual increase at all. If, or when, interest rates climb, is this not a disaster waiting to happen or Is this time different? How can we tell if/when it's time to reduce our US exposure? Is the bond market our only reliable barometer? What are your thoughts on this unprecedented development? What should small retail investors be watching out for and what moves, if any should we be considering? Many thanks.

Q: Hello, I have been thinking about initiating a long-term position (6-10yrs) in Costco for a while now.

My long-held view of the US dollar remaining strong and stable has changed; I have resolved to continue holding my US dollar securities through whatever this is but not buy more US currency at this time.

The issue is whether to initiate a new position in:
1)COST using existing $US or
2)the Costco CDR in Canadian $

Which option, in your opinion, represents the best risk-adjusted return over the next:
A)6-10 years?
B)1-5 years?

Does your response for A) change for beyond 10 years?

I know there are way too many variables here for any ‘correct’ answers but it is still interesting to have 5i’s perspective.
Thank you. This is an awesome service!
-Trevor

Q: This is a general question to try and clarify many of your answers. Often when someone asks an opinion between to similar stocks the response comes down to both for diversification. I totally agree with diversification, however you also often comment that more than 20-30 positions is not necessary or manageable. I have struggled trying to have a balanced portfolio, including some income as well as growth and including all sectors. It doesn't seem possible. But your answers do make me consider other possibilities.

Thanks, Lyle

Q: Peter, could you comment a little about yesterday’s piece of Scott Barlow in G&M about the 11 market aberrations - citing BMO chief economist Doug Porter? Thks

Q: Everyone, I have made a few dud investment decisions, such as waiting too long to sell Valient and Lightspeed. If you are in that position what metric(s) do you use to say - it’s time to move on. Clayton

Q: Good morning 5i
I would like your advice on a covered call options strategy. To date I have been selling covered call options on stocks I already own, such as Nvidia, Meta, Google, Shopify, etc. I sell mostly three week to monthly expiry dates. I usual tend to buy back and roll out if the market price surpasses my strike price. ( which I have been doing more frequently, recently).

All of these stocks have very high embedded capital gains and i wouldn’t want to pay the tax if called away. So far buying back and rolling out has worked well, though.

But, I am looking at other strategies, such as buying two or three good stocks, such as amd , palientir, etc specifically to sell call options. Here being called away is not a problem, as one would have little capital gains tax and , say in the case of amd, wouldn’t miss losing it, since I hold Nvidia.

Another possibility is to sell call options on a relatively volatile etf, such as QQQ.

I highly appreciate your advice, as I do in all investing questions

Q: Are there any theories related to the VIX at a very low level?

Thanks

Q: BNN's Keith Richards says this: "Stocks rising and bond yields rising are not compatible. Rising yields push bond prices lower. While bond and stock prices are not perfectly correlated, they normally keep a reasonably close pace. Currently we are seeing huge negative divergence.

Picture an alligator about to clamp its jaws down after opening wide. I call the divergence “Gator Jaws,” meaning that the price of stocks and price of bonds are moving in opposite directions. That will change by a falling stock market, or rising bond market (falling yields), or both – but it will change."

What does he mean by this? Do you agree with him?

Q: The BNN Guest today had the following to say - do you agree, and if so, can you suggest a way to mitigate this if an investor needs growth for retirement funding?

"Three of the largest stock market peaks over the last 60 years were in 1968, 2000, and early this year. Each of these peaks have also coincided with peaks in U.S. household equity holdings as a percentage of total financial assets. In 1968, the percentage reached 28 per cent and in 2000 it was 25 per cent. Today, it is around a record 30 per cent, surpassing prior peaks in 1968 and 2000.

Foreign investors also hold more U.S. equities as a percentage of their total financial assets than ever before. All this crowding by both foreign and domestic investors into the U.S. stock market has contributed to a rich valuation for the U.S. market. At the same time, as U.S. stocks have reached peak popularity, historical evidence suggests that whenever the valuation of the S&P 500 has reached its current level, the forward 10-year annualized return has averaged around zero. And if you think you can't do worse than zero per cent over 10 years, after the booming 1990s, the S&P 500 declined 23 per cent over the next decade."

Q: What are your top 3 sectors (ex tech) to invest in the US right now for the next 3 years ? I am looking to hold 3-5 years.

Please name your top 3 ideas (ranked if possible) in each of your preferred sectors for an investor with moderate to high risk appetite, regardless of market cap.

Thank you

Q: With tRUMP's 3 strike on Iran, how do you thing the US and Cdn stocks will react this Monday and for the rest of the week?.....Tom

Q: Good afternoon! I am a newbie to this site and am so excited to be part of the 5I community! My parents have been enjoying 5I for many years and are so thankful for the portfolio advice and great stock recommendations! I have now setup my portfolio and ran into some issues with the portfolio analysis. The P/E for some holdings seem inflated eg QQQI is 65. How is P/E calculated? And long-term expected return of current portfolio?

Thanks! Kevin

Q: What sectors would be your top pick for growth over the next year or two?

Q: Included in my previous question answered today for EEM thare was also a question regarding general allocation of funds. What would be your best allocation of funds in Bonds, US, Canadian and International allocation. Sorry if my question was not properly formulated.

Thank you
Yves