Investment Q&A

Q: At the end of 2019 the U.S. 10 year yield was 1.92% and the Nasdaq closed at 8972.
Today the U.S. 10 year bond yield is 1.96% and the Nasdaq is up over 60% to 14,736
I realize that earnings have increased since the end of 2019 but I wonder in your opinion is the Nasdaq over priced and is due for a severe correction?j

Q: Hi 5i, what are the best sectors on the TSX to invest in now and the next 3 months and why? Thanks.

Q: I'm a little stuck on what I should do now. Sitting at around 5% cash. I'm a growth investor 10+ yrs. With the market backdrop currently posing a headwind for growth stocks, how long does this process/rotation usually play out? Months vs years? I'm holding some value stocks but definitely lean more towards growth. What would be some questions I should ask myself through this process before I allocate my cash? Do I add more to my value stocks to create a barbell strategy or keep nibbling away at growth stocks and ignore the short term market noise? I keep gravitating back to growth names during my searches. Thanks!

Q: What is your opinion on buying LEAPS on blue chip companies during a stock market downturn? I know it's still "timing the market", which you don't recommend, but I have had quite a lot of success doing this in the past, versus buying 30-90 day calls.

Q: In one of your answer of yesterday, you said: Right now, growth companies, relative to large companies, are the cheapest they have been in nearly 30 years.

Can you talk more about this fact and give examples please.

Thank you :)

Q: Hello,

How much is the market at risk if Russia invades Ukraine. Could we see a significant pullback and would you want to own a certain asset class to protect your portfolio from this geopolitical event.

Q: I would very much value your opinion /comments about Larry Swedroe's October 11, 2013 article in ETF.com entitled "The 'Black Hole Of Investing'" ( https://www.etf.com/sections/index-investor-corner/20092-the-black-hole-of-investing.html ) about why small cap growth stocks are the worst-performing segment of the investment market. And why you recommend them in your Growth portfolio (IWO) instead of small cap value, for example - Thank you.

Q: Looking to diversify geographically by adding US names. Do you see any reason NOT to use approx. 20% of my cash to buy USD tomorrow to buy US stocks?

Q: Hello 5I,
I have one spot open in my portfolio for a high growth stock. I bought a bunch in the pullback but have $$$ to add ideally a long term core holding. The question is do I jump in now after so much has ran so much so quick? Or wait for volatility to create more opportunities. I am looking for a screaming buy in order to spend this money if that gives you any context.
Thanks

Q: Hello,
I have a general question regarding Portfolio Analytics.
At what point or range should one proceed with a rebalance either for the geographical weightings and/or the sector weightings?
For example, my geographical weightings show the following:

Increase Canada by 0.85%
Decrease U.S. by 0.65%
Increase International by 0.35%

Similarly for sector, i.e.:

Increase Technology by 0.21%
Reduce Real Estate by 0.49%
Increase Utilities by 1.64%
Reduce Health Care by 1.37%

All other sectors fall within the ranges shown above to one degree or another - only Consumer Cyclical at an increase of 0.07% is really close.
So, as a "Rule of Thumb". what kind of range should we accept as being close enough to not worry about? 0.25%, 0.50%, etc.?
For what it is worth, the portfolio is large enough that a 0.0015% adjustment would be acceptable in terms of keeping the trading cost at an acceptable level as per previous comments you have made pertaining to that aspect of the process - if that makes any sense ....
Many thanks as always!!
Cheers,
Mike

Q: This month end rally maybe linked with buying by fund managers either to be fully invested or by artificially pushing up prices to base their bonuses upon...or short cover rally or new money entering the market...what's your view?

Q: Regarding Jerome Powell, is quoted today as saying he "Pointed to an economy in 'a different situation' from the last interest-rate hiking cycle, highlighting a tighter labour market, the fastest inflation since the 1980's,"
The 1980's were great for interest -- I locked in a GIC for 5 years at 17% annual compound growth.
For the outlook today, can you provide any advice on what to do an what not to do give the outlook above,
Thanks for your valued advice.

Q: I hold these 8 equities in one part of my portfolio. I am not sure if it makes a difference, I am up on some and down on others.

The approximate weight and the gain / loss is shown for each. ATZ (3%, +17%); CNR (4%, -7%); CM (4%, +8%); Acuity Ads (0.5%, - 37%); MG (4%; - 11%) RY (6% + 5.5%).

I wish to free up about 2% of the portfolio for a cash requirement. Taxes are not an issue.

Two questions: First, if you were me, which / what would you sell to free up some cash? Second, is there anything here that should be let go because it is time to move on from it? I know AT is too small to make much impact but I am inclined to continue to hold it, for a potential bounce. Many thanks

Q: Hello Peter,
I think of your investment style as growth oriented long-term investor. But at the same time, you have been a portfolio manager and adjusted portfolios to manage yearly returns as well. You have experienced and managed similar downturns as they go through corrections in a rising rate environment. I would appreciate your opinion on how to adjust the portfolio in the current environment.
With the US (and Canada) central bank expected to raise rates about 4 times, the dollar index should be strong? That should not be good for commodities, particularly for gold and silver. But then inflation is going to be high too. What does it mean for gold/silver stocks and how would you adjust the portfolio weight as of now; and the bias between large (AEM, FNV,PAAS) and small caps such as KRR, MMX and WDO.
And the growth stocks, in particular technology stocks- FAANNGS (including NVDA) and other very high valued stocks such as AFRM,UPST,CRWD, DOCU,ROKU,TTD etc. I feel they will rebound but not much. Would you hold them through to the year end or rotate into traditional financials, commodities, and cyclicals in the near term. If rotating, would you do it immediately? Would be grateful if you could include your suggestion for the individual stocks too.
Finally, the persistent downward drift of ATVI – am I missing something? Did we learn anything from the microsoft call yesterday?
I know this has multiple questions and you deduct credits accordingly. I am very interested in learning from you - how you would go about portfolio adjustments and beat the market come December 2022.
Regards
Rajiv

Q: I never bought a REIT because I own another investment condo in Toronto. Would you factor that to your entire portfolio or add another REIT unrelated to residential like MPW, AMT or something industrial? If you would add regardless of having another income property, what would you add?
The condo rent has positive cash flow and the equity is about 3 percent of my overall portfolio. Analytics suggests a 4 percent REIT holding.

Q: What are you thoughts on the FED meeting today? It sounded like the Interest rate path has not been decided yet, and would be revisited at the next meeting.

Do you think they can continue to kick the can down the road, and what are the implication if they keep doing so?

Q: Hi Team,

On a scale of 1 (nothing alike) to 10 (identical) how do you rate the similarity to this tech meltdown with the late 2018 version?

Thanks

Q: Hello 5i team,
Need to build equity portion of a portfolio for a recently retired almost senior citizen.
Very conservative, sleep at night stocks. Not needed for at least 5-10 years.

Need about 10 for RRSP and 4-5 for TFSA.

Do you agree with above stocks or would you pick others?
No oil stocks and no significantly cyclical stocks.
Don't need to be dividend payers but looking for total return of 5-8% or more per year on average.
Can you provide about 12 choices including above suggestions if you agree for RRSP and 4-5 for TFSA.

Take as many credits as needed.
Thank you so much for this great service.

Q: when the stock market drops like it has during January 2022, I wonder who is selling???


is it dominated by traders, aka those jumping ship for future positions down the road, or retail folks bailing out of an ETFs in great numbers or institutional investors like pension plans which would surprise me?

what is your take?......I ask this as it is a head scratcher for me, especially as it isn't like other declining sessions in the 2000 era but rather about
expected rate increases and, to some extent, inflation in the short term

..........thanks for your insight.....Tom

Q: Can I please have your top 5 US and Cdn consumer non cyclical stock choices ?