Investment Q&A

Q: It seems that every day the new from south of the border gets crazier. Today (Friday) the markets reacted very negatively. Let's assume the news continues to get crazier. What do you think the markets will do. Is most of the insanity already priced in? Just how bad do you think it can get?

Q: Hi Team,
Admittedly, my portfolio is on the growthy, aggressive side of things being tech heavy with some smaller cap names. It now seems like daily I wake up to another name in the headlines dropping 10,20,30% with the slide on a few names continuing . Is this a sign the market is about to topple over cause this is what it’s feeling like. Or is the positive view 5i held for the year still in place? U assume as usual the move is to hold steady and ride the wave?
Thanks ,
Shane

Q: When is dilution a good thing? In the early days, Shopify diluted its shareholders a lot…

Q: Hello, 1.How does one protect them selves from large market crashes?
2. If one were to start a portfolio with only index funds, etfs which are the ones you would suggest. Maximum 5 etfs. Thanks.

Shyam

Q: Let us assume there is market downturn of 20% or greater. I am a retired senior and want to be cautious. I have TBills in US and Can.;
Also some BN, DSG , AEM and bonds like ZMMK. Also 10% in ZSP and VFV , XIU.
Any red flags here and suggest some additions. TAKE AS MANY CREDITS as needed to answer this. Thanks. Helen

Q: In a recent response, you mentioned that under the Trump administration the industrial sector is likely to suffer. Can you please explain why. Thank you!

Q: Hi, I'm seeing what appears to be rather large moves in these two stocks, so am wondering what I'm missing. Or are these sorts of daily movements going to be the "new normal" going forward? I'd like to hear your thoughts - thanks and keep up the great work!

Q: For now, investors seem to have decided to fade the chaos of Trumpenomics. However, one has to wonder how long the massive contradictions will be ignored.
Scott Bessent (Treasury), the man who wrote the report that identified the contradictions in the UK economy that made George Soros $billions, certainly must see the dangers, and yet, he is the source of one of the major contradictions, when he says the Fed shouldn’t lower rates while Trump demands the opposite.

Is Fed independence under attack and how will investors read this?

Are tariffs, as claimed, for revenue or to reduce imports? They can’t be both.
But if the tax cuts are to be permanent, $3 trillion in revenue has to be found somewhere.

Will Trump let a gnat like the Parliamentarian, or the Chairman of the Federal Reserve, stand in his way?

If, at some point, investors focus on the issues around tariffs-as-revenue, or threats to Fed independence they may begin to worry, and decide to sell equities.

The cost to hedge against such an event would be prohibitively expense given one wouldn’t know whether or when it would occur.

I’m sure 5i is considering these issues, but here is what I am pondering. How does an investor with a large equity portfolio manage this kind of risk? Would growth stocks be hardest hit? Are etfs better than individual stocks? What defensive stocks are likely least affected? Are there equities that would do well in such a scenario? How would bonds perform?

Q: In the context of the sector allocations question asked by Jerry today, you gave the Utilities sector a weight of 20%. Is this really what you meant? It seems pretty high to me. Besides, when we add all the sectors, the sum is 110%. Thank you

Q: Hi Peter and Team,

I’m a very pleased user of Portfolio Analytics, as well as 5i of course.

Till now, I never changed my allocations using “Custom Allocations”. Previously, I used one of the suggested allocations.

In this era of tariffs, I fear they will throw a monkey wrench into our economy as well as in the US. For example, even though tariffs on steel and aluminum aren’t yet in place, some Canadian firms have already lost orders. “The threat of tariffs is, in itself, a tariff”.

As an example, you recently responded to a member’s question and suggested that the Industrial sector could/would be vulnerable to tariffs.

Please suggest “Trump-proof” sector weightings that takes into account the uncertainty that is rampant with Trump 2.0.

Thanks as always for you assistance in helping us to make informed decisions.

Q: With the uncertainty ahead is it time to reduce the industrial holdings first , and then financials if the tariffs kick in?

Q: With Tariffs coming in USA Inflation will be headed higher. No hope for J Powell to reduce rates. This is not good for stock Market that wants lower rates. Your Thoughts ? RAK

Q: Do US politicians have to declare any and all securities that they buy/sell? Or is it only required if they buy/sell over a certain dollar value (or % of a company)?

What about the rules for Canadian politicians?

Q: Any suggestions on how to "Trump-proof" one's portfolio?

Q: Dear 5i Team:

I always enjoy your 5 from 5i section. Usually contain at least one if not more thought provoking articles and help me to understand the BIG picture better.

First a non-question! Who in the team "curates" these articles?! Thee is some consistency here.

From Ritzhold's article: Based on their take on opportunities, what are the stocks/sectors you would suggest? Financials? Stocks that will benefit from inflation!! Energy. I couldn't "decode" this article into actionable ideas.

Q: Explain this to me like I'm a ten year old. The US consumes 5M tonnes of aluminum annually. They produce 750K tons. They import roughly 3M tonnes from Canada and now a tariff. Don't our producers just say cool, increase the price 25% and we're even. Who loses here? Who has who by the you know what's? Last time our exports dropped just 14% ( the US customers had bulked up on buying when tariffs were signalled) and within two years everything was back to normal. I don't get it. Is it all just posturing and bluster? Unless the US immediately stops using aluminum aren't they the real losers here?

Q: Presuming that the price of steel goes up with tariffs, outside of the steel industry itself, what sectors and specific companies lose out here? Thank-you.

Q: Hi Peter and Team,

I notice that you often state that stocks did well under Trump's first term.

With all due respect, Trump 2.0 is, in my own view and the view of many others, Trump 2.0 is a different 'kettle of fish' than Trump 1.0. One needs only to look at both Canadian and US media to see the complete chaos that Trump is causing on both sides of the border.

Thanks.

Q: Hi,
I read with great interest Lisa and Peter’s questions and your answers on Feb. 10 about Trump, US holdings and economic warfare.
Given Trump is now making noises about how some US debt could be fraudulent, and the US may not owe as much as the Treasury reports, I see new risks.
For instance, as part of his economic warfare against Canada, could he by the stroke of a pen declare Canadian held US debt is fraudulent to put pressure on Canada to become the 51st state? Further, could he freeze Canadian held assets in the US (securities, real estate, business assets, etc.) to further pressure Canada?
Along Lisa’s line of thought, does it indeed make sense to sell some US assets and re-buy in Canada?
Final question: if I hold US cash in a US dollar account in a Canadian domiciled bank, is it safe from Trump’s potential ravages?
(Please take multiple credits.)
Thank you, Michael

Q: What would your opinion be on selling US stocks held in US funds (or moving cash) from a US account over to CAD account to realize the immediate ~40% fx gain (maybe it's not that simple, please advise)? Assuming there's options in the Canadian equities market that are just as good as that on the American side, I'm having a hard time rationalizing why this is a bad idea. Thoughts?