Investment Q&A

Q: Portfolio analysis relates that I am over in Energy by 16% and financials by 6%. I am well distributed in all the other sectors. I am a 78 year old value investor with some growth stocks. Energy: SU, CNQ, CVX. NXF, ENB, XOM, PKI, PSI, PPL: FINANCIALS: BAC, BNS, BKCC, HMAX, JPM MFC, SLF, X, TD. I enjoy the dividends as they help contend with the ever increasing taxes and surprise expenses such as a septic tank inspection, boat repairs, new garage doOrs and general upkeep. Should I just leave well enough alone or is this a big deal?
thank you for your excellent advicd and service.

Q: Hi 5i
I'm curious if there is any way of knowing (stats-wise) whether the "younger generation" expect interest rates to stabilize at the "normal" near zero rates vs "older generation" who are less inclined to believe that (making assumptions here)
I just read a question regarding the inevitable "long slow decline of rates" .... I'm not so sure being in the "middle generation" :)

What are your thoughts on what "normal" rates could/should be (coming from the "wiser generation").


Thanks

Q: Just a simple question.

Do you know why the TSX and DOW both have a huge pop at 3:35pm yesterday - less than half an hour before closing? TSX jumped about 200 point, any news there? Thanks.

Q: Soon interest rates should begin the inevitable long slow slide down. Can you rank these three sectors, banks, REITs & long term bonds, when the interest rates begin falling? Keep up the excellent work... Thanks.

Q: What are the reasons for the significant drop in the Cdn and US stock markets since last Friday???.....thanks for your insights.....Tom

Q: Is TSX 60 ETF a buy today?

Q: Everyone, as a 70 year old retired person what investment(s) should I not purchase. Clayton

Q: Hello 5i,

We are retired and in our mid 60's. We and have started pulling out 5% of our RRSP portfolio each year to pay bills and take vacations. One of our laddered GIC's came due on Monday. We can choose a 5-year at 4.59% but this is in an RRSP which we will pay 20% tax on upon taking funds out. Our equity to fixed income is 65 equity/35 fixed at this time.

Do you have any suggestions other than taking a 5-year GIC at 4.59%? We would be ~70/30 if we select equities.

Thank you
D&J

Q: Hello 5i Team

From review of various questions I surmise that that 5i mainly uses Bloomberg Terminal and/or Refinitive EIKON for research. However I realize these data packages due to monthly prices are beyond an individual investor.

Therefore I am trying to compare the various subscription versions of TIKR Terminal versus the subscription versions of KOYFIN which seem to be more reasonable. I have signed up for the "free" access versions of each to explore their features and I am quite satisfied with what I see. The choice is now which product to use and what subscription version to sign up for.

Does 5i use either TIKR Terminal or KOYFIN service and if so which subscription level do you use?

This may be best addressed as a blog article exploring both packages.

Thanks

Q: Is the P/E ratio of the TSX too high today and does it need to decrease?
Is the P/E ratio of the S&P500 too high today, and does it need to decrease?

Q: Hello 5i,

We have been monitoring the economic cycle relative to stock market performance. Commodities are hot and there is a trend towards Bonds. Typically, this would indicate a stock market decline leading into a recession (mild or or medium decline).

But, our world has been turned upside down since covid. Is the S&P model of economic cycle and stock market performance model valid at this time?

https://thenewsavvy.com/invest/markets/stages-of-the-business-cycle/

This chart is dated March 31, 2024 https://novelinvestor.com/sector-performance/

Your insight into stocks as of specific dates is very valuable. Thank you for guiding us through constant change and up to the minute decisions.

Debbie and Jerry

Q: Given the chance of a second Trump Presidency and the likelihood of tariffs, loss of democracy and full on graft and favouritism what Canadian companies are likely to thrive or at a minimum survive? Is there a defensive strategy that would work for either result in the election or is it one direction with Trump and another with Biden?

Q: I recently changed Financial advisors. I am sitting on a significant amount of cash to deploy. I am concerned deploying the cash while Canadian and US Markets reach all time Highs. Given the tremendous run the markets have had in the last 6 months, what would be your advice?

Thanks
Tim

Q: What are your thoughts on being overweight US stocks vs. CDN for the next year or so?

Q: What do you think the go-forward risk is for significant market correction? Are there traditional metrics that you follow for such (ie inverted yield curve) and could you please comment on their present state?

Q: Knowing that portfolio allocations need to be very personal, but would 30% Canada, 45% US, and 25% international work as a general guideline for 60% equity portion of a new RRIF account?
Would you change the 40% fixed portion consisting of 20% 1-year GICs, and the remaining 20% of XHY, CVD, CPD, Bonds mutual fund (currently at loss)?
Thank you for such a great service.

Q: Hi Group . I am not happy with my Raymond James financial advisor. Namely I am paying them $1200/month in fees. Presently i am at 6% return YTD (7 1/2 average over last 10 yrs). When i look at your balanced portfolio you are significantly better than that as is the major markets..

What is the best way to measure performance. Is it fair to say in general that they should be better than the market. What do you suggest as a reasonable measurement on performance . I realize this is not easy to measure so can you give me some suggestions that i can follow . thanks for your help

Q: Hello 5i.
Sometimes in questions (or answers) "starter positions" or "partial positions" are mentioned. My question is, how should an investor best manage such positions in a hypothetical 20-25 stock portfolio (implying 4-5% as a full position), while maintaining this portfolio size? Should an investor buy e.g. 4 "starter positions" at 1% each and then consolidate into the one that does best? Or should an investor buy starter positions with an eye to replacing a current full position that is not performing as well? Or is there another approach?
Thanks!

Q: Hi,

I’d like to add a bit of nuance to your response to Delbert on May 2 about Canada’s macro circumstances.

In your response, you state that Canada has a debt problem. According to the OECD’s 2022 figures (latest available), Canada’s debt to GDP ratio is better than Japan, Greece, Italy, the United States, Brazil, France, Spain and Portugal. (https://data.oecd.org/gga/general-government-debt.htm)

Again, according to the OECD’s level of GDP per capita and productivity, Canada is essentially tied with the OECD as a whole. (https://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV)

In 2023, the OECD reports that Canada’s GDP growth was 1.5%, beating Germany, the UK, the EU as a whole, the Euro Area as a whole, Italy and France, and nearly matching the OECD Area average (1.6%) and the G7 (1.7%). (https://www.oecd.org/newsroom/gdp-growth-fourth-quarter-2023-oecd.htm)

The OECD also reports that Canada’s corporate income tax rate in 2022 was 15%, beating all but 4 countries. Canada’s corporate income tax rate is lower than almost all of Europe (typically around 25%) and the US (21%).

Thank you.

Michael

Q: Hello,

A few years ago I read that Canada was on it's way to becoming a tax haven similar to what is offered in the traditional Carribean countries. Although my corporate tax rate is ok(12% or so) I am finding equity erosion from currency devaluation/inflation, closing off capital gains benefits, etc is outstripping my ability to grow/preserve my capital.
From seeing some of the upcoming
coercion like changes w.r.t. taxation, private property, etc and an anti-saving/working/investment mindset that seems prevalent in the press makes one think Canada has or is becoming a very unfriendly place for capital preservation and growth.
Is this a new phenomena?

Thank you for your sage counsel.