Investment Q&A

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

Q: Everyone, if you could suggest a book(s) or magazine or blog to a 20’s person about investing what would it be? Clayton

Q: Genius act being passed in the USA for stablecoins. Will this effect other, Crypto etc
Does 5I have any suggestion for stocks or wait & see. will it also effect payment type stocks. Tks 5i

Q: Ross Healy, who typically does not make sensational statements lightly, spooked me yesterday during a podcast interview with Amber Kanwar. He sees tech stocks dropping 60% which will invariably pull other types of stocks down for the ride. He suggests moving to gold... could you suggest a couple gold stocks with strong balance sheets? A mix of large, mid and small caps would be great. Thanks!

Q: What would you consider acceptable in a TFSA USD vs CAD percentages,
Would a balanced approach 50-70% CAD and 30-50% USD make sense or
if I keep 100% in only one what would be the justification if any
thank you

Q: What are your thoughts on using covered call ETFs to increase the yield of a portfolio?

Q: There was a report from CIBC strategist titled " The Benefit Of Unhedged U.S. Equity
Holdings Is Moderating" due to persisting weakness of USD and the likelihood of USD remaining weak ( and decline more over time ) against CAD and other major currencies, as a result of Trade/Protectionist policies of current administration, for next 2-3 years.

The report also noted that traditionally CDN Mutual Funds, holding USD securities, were mostly rewarded due USD strength historically against CAD, resulting in superior performance in CAD terms. Also, CDN companies with sizable business in USA, also benefitted, as they report in CDN.

We noticed this in our USD Investment Portfolios, where YTD performance was lower by 7-8%, when converted in CAD, compared to its USD performance.

So, it's a two part question.

1. What is your view about about the weak USD thesis and whether it's always best to leave the USD stock portfolios, as is, since over long period of time, currency fluctuations cancel out to a Neutral.

2. If you concur with the CIBC strategist thesis, what are the possible options to Hedge the USD positions, for a Canadian retail investor ? ( Considering, MF portfolio Managers have access to sophisticated options )

PS: Since 5i team, manages a large fund of USD small cap, it might be specially interesting to have your thoughts.

Thank You

Q: Do you think if US tax gets approved then lots of international investors would sell off US dividends stocks or it would impact all the US stocks.

If there is impact do you think international investors would move to CDN or Europe or which markets they would invest.

Thanks for your great service

Q: Materials sector in Canada or US
In my 80s and we have very little to no exposure to any companies in any of the Materials subsectors.
I know that at our age we should probably invest conservatively and consider capital retention as imperative, but the advisers we had in our early income generating years had that strategy and we missed out on massive growth.
Since becoming a member of 5i, I have become bolder and made up a little lost ground, so I have some appetite for growth, but steer clear of absolute gambles.
What would you suggest for any stocks in the materials sector, where there is a moderate dividend, but ample room for growth?

Q: I’m trying to understand the impact US tariffs - and in particular tariffs on steel and aluminum - could have on our economy and certain companies. Tariffs make goods going into the US more expensive which means US costs increase. These costs a would normally be passed on to the purchaser or the purchaser would look to a new, cheaper supplier. If the US can’t produce enough of their own steel and aluminum and since this new tariff affects all countries doesn’t the US still have to buy from Canada? Excess capacity in the US could make up the difference but is there that much excess capacity there? And for something like potash which I think is irreplaceable don’t tariffs on that product just harm American farmers?

Appreciate your insight!

Paul F.

Q: I have read a synopsis of the recent Ray Dalio book, a guy who has a solid reputation in world wide financial circles. He sees 3 years max at the current rate of spending until the a U.S. hits a wall and serious defaults begin to happen,and the U.S. dollar gets hammered.I have no confidence that Carney can make any positive moves here in Canada to improve the economy . He showed his hand today. Everything will come back to his climate change issues, and dealing for years with native tribes, which will stall investment,and retard any hope of significant positive change. So, as an aging senior where do I go to best protect my capital here in Canada…..Gold, bitcoin, Swiss francs ?I’ve been a market investor for 55 years. Seen pretty much everything. I’m wondering if this time it really is “different”.
Thoughts?

Q: this breaking news from last night caught my attention - tRUMP does not have authority to impose sweeping tariffs against Canada and other countries, rules U.S. court
what will be the outcome of this for the US stock market???
but the US Supreme Court could over rule this over turn the lower court ruling as the majority on the Supreme Court favour tRUMP
Is it a time to but US stocks???.......thanks for your insights ...Tom

Q: There's been a lot of noise lately about widening bond market spreads and their potential implications. From your perspective, is this a meaningful early signal of broader market stress and if so, how might it impact public equities in the months ahead?

Appreciate your take.