Q: Hi Peter and Team - I know this question is a little outside of the regular type of question/answer component of your services and that you are not in the business of predicting macro economic events. However am just wondering if you have any thoughts on how interest rates may play out over the next couple of years both in Canada and the U.S. With the tax reform package now passed in Congress is it quite possible that this could lead to fairly major inflationary pressures in the U.S. and therefore substantial interest rate increases. If so then what might be the effect on Canada's interest rates and resulting stock market movements. Thanks.
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Investment Q&A
Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.
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NVIDIA Corporation (NVDA)
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Dollarama Inc. (DOL)
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Boyd Group Income Fund (BYD.UN)
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Alimentation Couche-Tard Inc. (ATD)
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Shopify Inc. Class A Subordinate Voting Shares (SHOP)
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Block Inc. Class A (SQ)
Q: I can't add to my RIF, I can't put more than $5,500 in my TFSA annually, so my unregistered cash account is holding shares that will mean major capital gains. I have trimmed periodically, but currently ATD.B is up 1,068 %, SQ up 119%, NVDA up 324%, SHOP up 207%, BYD.UN up 118%. I am not complaining. I offer 5i my sincere thanks for your advice over several years that has been so rewarding. I tend to hold overly long , so I am wondering whether I should in future sell when a stock has reached, say 40%, and buy another stock? What to do?
Q: I think most investing houses recognize the US is going down a path of debt destruction. What is your assessment and thoughts of the the opinions expressed by Peter Schiff as it relates to the US. He has some very compelling arguments but many think the economy is actually in great shape..?
Q: What do you see as the best strategy to benefit from downturns like what we’ve seen lately. Is it just make sure you always have cash to deploy when one happens or is there some stock/fund that is average most of the time but really benefits from the pull backs somehow?
Q: Hello, with the Dow down more than 4% twice this week, can you comment based on your observations (volume, block size, leverage or other) and experience if the automated trading could explain this volatility and trigger this panic. Also, would you know if the level of leverage and use of derivatives has increased over the last few years or vs 2008 ? Thank you.
Q: I, like everyone like rising share values but as an investor still in the accumulating phase of life, lower share prices equal more shares bought every quarter or month. If one is in invested in decent financial instruments and payouts are not cut then the price of the underlying security does not matter unless you have to sell. I remember 2000 and 2008/9. We were due for a correction and we will again survive. Just my two cents worth, Steve
Q: I wonder if I could get your take on what Jim Cramer says is behind the current mess in the market. According to him most of the problem is hedge fund managers having to sell stocks to make margin calls on heavy, leveraged short bets they made on VIX volatility funds. It makes as much sense as any other reason I've seen. If it was just fear of a rising yield the big banks would be rising, not leading the way lower. https://www.cnbc.com/2018/02/08/cramer-these-4-securities-will-signal-the-end-of-the-sell-off.html
Q: Hello Folks:
My question is most basic re: bond and equity market price relationships.
I understand for bond yields to rise; either bond prices must trade lower or new ones issued with higher yields.
Commentators advise because of higher bond yields, people hesitant about equity market risk are moving money into the bond market.
With fewer people chasing stocks I can understand this could somewhat dampen stock prices.
What I do not understand is the reverse in the bond market.....more money from stock sale proceeds chasing bonds in the fixed income market should increase bond prices depressing yields.
I would appreciate if you can help with this basic finance 101 question.
Thanks for everything
brian
My question is most basic re: bond and equity market price relationships.
I understand for bond yields to rise; either bond prices must trade lower or new ones issued with higher yields.
Commentators advise because of higher bond yields, people hesitant about equity market risk are moving money into the bond market.
With fewer people chasing stocks I can understand this could somewhat dampen stock prices.
What I do not understand is the reverse in the bond market.....more money from stock sale proceeds chasing bonds in the fixed income market should increase bond prices depressing yields.
I would appreciate if you can help with this basic finance 101 question.
Thanks for everything
brian
Q: I have been wondering for some time about market valuations and your recent comment about inflation being bad for markets has raised it again for me. If a market is doing reasonably well and inflation sets in could there be a reset of stock valuations. If so what sectors could get re-evaluated and is it across the board in a given sector or specific to certain size market caps?
Thank you
Clarence
Thank you
Clarence
Q: Hi Peter, Ryan, and Team,
In your recent answer to Cyril, (Feb. 2, 2018) in which he asked about your recommended sector weightings for 2018, you suggested the following:
"For a general, growth focused investor: Real estate 5%. Financial 10%. Healthcare 5%. Info Tech 20% . Materials 10%. Utilities 5%. Energy 5%. Cons. Disc. 10% Cons. Staples 5%. Industrial 20%. Telecom 5%."
In general, how often should one balance sector weightings? Specifically, in my case, I find that, as an example, I'm quite a bit overweight in Financials, but am reluctant to sell any when they've recently declined (although I'm in the black with all of them except for AIF). On the other hand, there seems to be some "bargains" in some of my underweight sectors such as consumer cyclicals, industrials, information technology, and materials. Unfortunately, I only have a little excess cash to invest, so I'd really appreciate your guidance on what to do with my dilemma.
Your advice is very valuable. Thanks in advance.
In your recent answer to Cyril, (Feb. 2, 2018) in which he asked about your recommended sector weightings for 2018, you suggested the following:
"For a general, growth focused investor: Real estate 5%. Financial 10%. Healthcare 5%. Info Tech 20% . Materials 10%. Utilities 5%. Energy 5%. Cons. Disc. 10% Cons. Staples 5%. Industrial 20%. Telecom 5%."
In general, how often should one balance sector weightings? Specifically, in my case, I find that, as an example, I'm quite a bit overweight in Financials, but am reluctant to sell any when they've recently declined (although I'm in the black with all of them except for AIF). On the other hand, there seems to be some "bargains" in some of my underweight sectors such as consumer cyclicals, industrials, information technology, and materials. Unfortunately, I only have a little excess cash to invest, so I'd really appreciate your guidance on what to do with my dilemma.
Your advice is very valuable. Thanks in advance.
Q: Some context please to a common expression you hear on BNN.
When advisor/analysts on BNN say they will buy a stock on a "dip" or a "pullback", what do they mean? A 1% drop, a 5% drop, a 10% drop.
I am retired and looking for dividend payers as my source of income. Of course everyone wants to only buy LOW, but not always possible. I like to add to strong positions but wonder when that is advised.
Cheers.
PS I submitted this question early yesterday before the market drop so my question seems even more timely....for some reason it didn't show up in your question section
When advisor/analysts on BNN say they will buy a stock on a "dip" or a "pullback", what do they mean? A 1% drop, a 5% drop, a 10% drop.
I am retired and looking for dividend payers as my source of income. Of course everyone wants to only buy LOW, but not always possible. I like to add to strong positions but wonder when that is advised.
Cheers.
PS I submitted this question early yesterday before the market drop so my question seems even more timely....for some reason it didn't show up in your question section
Q: Are the U.S. futures that are published ahead of market opening a reliable indicator of the direction of the market for that day? How well does the futures prediction correlate with the actual market openings?
Q: I would like to get your thoughts on an equal weight approach vs a market weight approach with the S&P 500. This would be for long term performance holds of 10, 20 years.
Q: Any general comments on the current market sell off? Thanks.
(I hate to get into the mode of worrying that this is the start of a bear market scenario - prolonged time of continued losses. The cure to that worry for me would be reasons x, y, and z to be reassured that is not happening at this time. And so, if one just waits it out.. things will eventually come back, and go higher too)
(I hate to get into the mode of worrying that this is the start of a bear market scenario - prolonged time of continued losses. The cure to that worry for me would be reasons x, y, and z to be reassured that is not happening at this time. And so, if one just waits it out.. things will eventually come back, and go higher too)
Q: could you please comment on todays decline in both the tsx and dow any reasons why and is this a correction or a sign of things to come thankyou
Q: Can you help with secor allocation for 2018. Realise that the allocation will vary depending on factors such as risk tolerance, age etc. Just seeking your thoughts on reasonable ranges for allocation with a view to tweaking our investments. Thank you as always for your much appreciated assistance.
Q: Hi 5-i:
I read somewhere that the volumes in the stock markets are generally highest at the open and near the close , because etf's are investing any
overages. Any truth in this? Could I assume that this is a good time or
bad time to trade. When in your opinion is the ideal time of day, if any?
Thanks,
BEN.
I read somewhere that the volumes in the stock markets are generally highest at the open and near the close , because etf's are investing any
overages. Any truth in this? Could I assume that this is a good time or
bad time to trade. When in your opinion is the ideal time of day, if any?
Thanks,
BEN.
Q: Hi 5I
Do you ever think it is a good idea to overweight certain sectors, for example currently, financials. Unbalancing an otherwise normally balanced portfolio?
Do you ever think it is a good idea to overweight certain sectors, for example currently, financials. Unbalancing an otherwise normally balanced portfolio?
Q: Please respond as you see fit, private if you deem appropriate.
Although no one can guarantee the future, having a forward vision at least gives some perspective and/or at least an opinion/position to work from. With fixed income rates low and now rising, issues surrounding the potential risks to so called bond proxies, what is an educated guess as to their potential downside risks? Basically, using your expertise, how much might a maximum correction possibly look like? I prefer to hear what I need to know but understand the comments of certain people can create fear /panic for others!
What would you consider the new "Norm" for interest rates both short and long term? Some suggest a period comparable to the 1950s and early 60s where rate structures were low? That said, will savers continue to be subjected to economic repression? Predictions of the short end moving as high as 3% and if so, would say 4% (or higher) constitute a reasonable spread for the 10 year? I often hear analysts use the 10 year rate to model values?
Would real return bonds be a good anti inflationary component since there is also talk of inflation actually picking up more than expected? Is not the yield over inflation fixed and should inflation pick up might a spread with the market occur? Assuming a fixed/ equity portfolio of 35/65 %, what % of the fixed income portion could be considered a ballpark number representing a full weight for real return bonds ?
Rising rates are often the sign of an improving economy and somewhat of a counter weight to offset yield shifts. Some may say my questions want it both ways. My primary concern, years of engineered responses now showing their Achilles' heel and a period of "detox" ahead of us to correct them?
My approach, at least understand all the risks and the options to build a portfolio that matches the conclusions and risks you are comfortable with. There are a few guest on BNN who are even cautioning about too much get rich thinking!
Given I raise multiple points, please feel free to respond with a few bottom line general comments if that is what deem appropriate.
FYI. I go on the site daily with a goal of reading every response. It provides a great base of information and knowledge in a very timely fashion. Keep up the great work and thank you.
Mike
Although no one can guarantee the future, having a forward vision at least gives some perspective and/or at least an opinion/position to work from. With fixed income rates low and now rising, issues surrounding the potential risks to so called bond proxies, what is an educated guess as to their potential downside risks? Basically, using your expertise, how much might a maximum correction possibly look like? I prefer to hear what I need to know but understand the comments of certain people can create fear /panic for others!
What would you consider the new "Norm" for interest rates both short and long term? Some suggest a period comparable to the 1950s and early 60s where rate structures were low? That said, will savers continue to be subjected to economic repression? Predictions of the short end moving as high as 3% and if so, would say 4% (or higher) constitute a reasonable spread for the 10 year? I often hear analysts use the 10 year rate to model values?
Would real return bonds be a good anti inflationary component since there is also talk of inflation actually picking up more than expected? Is not the yield over inflation fixed and should inflation pick up might a spread with the market occur? Assuming a fixed/ equity portfolio of 35/65 %, what % of the fixed income portion could be considered a ballpark number representing a full weight for real return bonds ?
Rising rates are often the sign of an improving economy and somewhat of a counter weight to offset yield shifts. Some may say my questions want it both ways. My primary concern, years of engineered responses now showing their Achilles' heel and a period of "detox" ahead of us to correct them?
My approach, at least understand all the risks and the options to build a portfolio that matches the conclusions and risks you are comfortable with. There are a few guest on BNN who are even cautioning about too much get rich thinking!
Given I raise multiple points, please feel free to respond with a few bottom line general comments if that is what deem appropriate.
FYI. I go on the site daily with a goal of reading every response. It provides a great base of information and knowledge in a very timely fashion. Keep up the great work and thank you.
Mike
Q: Hi 5I
In 2008 i held my portfolio all through financial crisis even though it was very unsettling.I feel i made a huge mistake by not raising cash! There where unbelievable bargains of the canadian banks as one example with huge dividends available.Fast forward,now 64 years of age i have raised cash because i feel that a similar opportunity may exist. Maybe not to the extent of 2008,but it is with the strategy of picking up blue chip companies with enhanced yields for my retirement.
I have kept some good paying dividend stocks,preferred shares,debentures.
I am willing at this time in my life to forego some capital gain,to hopefully attain higher yields.
I concede that this is timing the market,but it is a strategy that i feel will help me in retirement.
Your thoughts?
In 2008 i held my portfolio all through financial crisis even though it was very unsettling.I feel i made a huge mistake by not raising cash! There where unbelievable bargains of the canadian banks as one example with huge dividends available.Fast forward,now 64 years of age i have raised cash because i feel that a similar opportunity may exist. Maybe not to the extent of 2008,but it is with the strategy of picking up blue chip companies with enhanced yields for my retirement.
I have kept some good paying dividend stocks,preferred shares,debentures.
I am willing at this time in my life to forego some capital gain,to hopefully attain higher yields.
I concede that this is timing the market,but it is a strategy that i feel will help me in retirement.
Your thoughts?