Investment Q&A

Q: Hi, could I please have your view of the Canadian inflation rate over the next 5 years. Do you believe we could return to a scenario of very low inflation and zero interest rates or is inflation likely to plateau at a higher level (or much higher level) and what might that level be? Thanks.

Q: Today, do you see more future growth from owning a S&P 500 etf like VFV or from a balanced equity (BE) portfolio? I own all the BE stocks in my portfolio, and I have some new money to invest. Which 4 BE stocks would you over weight at this time ie what is your highest conviction stocks? Could you give a brief reason why? Would you wait until the US Feds raise rates coming in September? The markets dropped the last time the Fed raised the rate. Do you know the date? Or just invest right now?

Q: What are your highest conviction "value stock" picks, for long term total return, right now? Thanks!

Q: Dear Peter et cal:

Two part question. You may dedut as many credits as you feel fit.

1. There are a few experts who predict 60/40 portfolio is finished for several years! I was a subscriber to Portfolio Analytics for a while and it repeatedly told me that given my answers to your algorithms , I have to stick to 60/40 split.
What do you think about 60/40 portfolio in general,, especially for the many in the pre/semi fully retirement stages. No need for personal answer. Just a general overview answer would be fine.

2. If you were to construct an ETFs based portfolio TO-DAY from scratch, would it be different from the one that we see in Canadian Money Saver? What would it look like ,if it is different? 80/20? or 70/30?

As you have indicated that you can give personalized answers, please feel free to answer in general/overview/big picture terms.

Thank you in advance
Mano.

Q: Further to Daves question and response, this week a guest on BNN mentioned we are no where near seeing a turn in the market until the Fed makes the last rate decrease. This could well be next year or and 2024.
What are your thoughts and thanks
Rick

Q: I feel that 5i has the belief that if you are a long term investor you will be OK with the downturns that we are having now. Stay invested and you will OK in the long run. Yes, overall the market has always gone higher over time, but you can get caught if you bought into the highs and are now down 50 to 80%. Oil stocks have been the darling in the last year, but if you bought the same ones 10 to 12 years ago, some are still off 50 to 80% from there highs, so this really makes you a long time investor. I feel that are many growth stocks that were bought when you thought the market would always go up will now be looking at decades to recapture there cost. Sometimes a better market does not even help some of these stocks recover.
Thanks again

Q: Hi, This week's sharp decline in Pipeline ( ENB/TRP and Others) and Utility (FTS etc ) stocks - Do you think, it is a result of market's renewed fear of continued rate hikes into 2022/2023, as suggested by FED Chair on Friday and re-iterated by other FED Presidents over course of this week including Cleveland FED President, Mester, Today. Pipelines and Utilies sector has performed well this year, but may be, due to its higher yield, is causing some worry to investors. Your comments, co relation of high rates and other factors, impacting these sectors will be much appreciated. Would it be prudent to underweight the sectors, in near term. Thank You

Q: for the whole year when you get a question on a stock, you have been saying the same thing-we like the company but we need a better market backdrop,we think its worth holding.
but the reality is the market backdrop is not getting better-its getting worse, actually far worse and it could continue well into 2023 and 2024-and a recession is obvious if not already happening.
personally i have liquidated everything except some oil and gas stocks and some long dated options,. i also think your comments and bi weekly updates are way to positive.
remember jerome powell has gone of the rails and has numerous flip flops and macklem is not much better-can you comment.dave

Q: The TSX solidly outperformed the SPX from early 1999 to early 2009 and the SPX solidly outperformed the TSX from then until early 2020 and we’ve been chopping around since.

Is it time for the TSX to outperform the SPX again, for at least a few years? Is this essentially a question of how strong will tech be going forward?

I noticed that during the TSX outperformance from 1999 to 2009 oil went from $11 to $140. So maybe it’s also a question of where oil is going.

Q: I am looking for advice on how to handle the small cap growth stocks in my TFSA. I find it more difficult to sell a stock rather than to buy it as either greed or ignorance or dismissal of all the relative facts get it in the way. For example , I rode EGLX all the way to nearly $10.00 only to watch it fall to its present price of my initial cost of around $ 1.90. The market was strong, it recently listed in the US, ; things were great but then they weren’t. I need some non emotional, logical tools with which to make selling price decisions on these more volatile stocks. A suggestion of some technical measurements for these types of stocks would be helpful.

I have considered a stop loss formula of say a certain % increase would trigger a certain % stop loss order. For example at a 50% increase I would implement a sell order at 10% below current price or a 100% increase ( to be so lucky again) would trigger a sell order of 20 %. Being human I would probably kick myself if watching a 100% gain ( actually only 80% if I used this formula )go on to a 150 % gain, only to be stopped out at a much lower price !

Thanks
Derek

Q: Now that Powell has come out with a higher-for-longer interest rate plan at Jackson Hole, any thoughts on when high growth tech shares might finally begin to recover? 6 months? A year? Two years? Thx.

Q: Hi 5i, What are the chances of a recession in Canada in the next 6 months, and what is your reasoning please?

Q: In various question you are asked to give a stocks entry price. My question is what parameters do you look at to calculate a stock’s entry purchase price. Thanks … Cal

Q: Retired, dividend-income investor. I'm just trying to figure out where we are at in this investment cycle. In my opinion we appear to have bottomed and are now starting to see equities on the rise...but then again, it might be a head fake, bear market rally. Time will tell. Then we face the potential recession predictions...soft landing...hard landing?

So, forget all of the investment jargon for a moment and assume we have either bottomed or do indeed retest that bottom and then resume the rise in equities. Then what happens after that, when some kind of a recession possibly hits us. What do equities do? If recessions are usually short lived and markets are looking ahead 6-12 months, what then? Do equities sell off or...?

I am normally an extreme buy-and-hold investor who sets his long term asset allocation and follows it, with very little cash on hand...maybe 2-3%. I will probably do absolutely nothing with however you answer...just trying to understand the market dynamics. Or, there is the chance I might raise my cash up to 5% at the most, but that is market timing. AND, the investment cash usually burns a hole in my pocket and I historically reinvest into some falling knives. So...I usually just watch the action and do nothing besides some minor trims-adds to my core positions to maintain my target asset allocation.

Sorry for the ramble. What's your crystal ball say for the next year or so?
Thanks for your help...much appreciated...Steve

Q: I’m generally sold on the US and Canadian markets for the long term due to historical superior returns and risk versus Europe , EM and Asia and for the most part a better environment for doing business. What would be your suggested allocation between Canada and US outside of non registered accounts ( this I have 100% Canada due to high quality names and tax advantages).
Thank-you.

Q: For a TFSA with a growth tilt, what would be the portfolio percentage invested in stocks related to Balance, Growth, Income and Yield, aka REITS?.......Many thanks for the suggestion.........Tom

Q: With the Canadian trading so low, do I assume correctly that this would not be a good time to buy US stocks? Does the same assumption apply to hedged investments such as ETFs and CDRs? Thank you.

Q: With the upcoming balance sheet tightening by the fed does it make sense to have dry powder in the event that markets drop again significantly. If one is fully invested what percentage of cash would you usually recommend? Thanks. Shyam

Q: Hi

What is 5i's take on your first Sentiment Survey - anything surprise you particularly?

Thanks

Q: Hi, you mention short interest from time to time. Using MTTR as an example, you say that short interest is very high at 15%. I assume this is a negative as there are a lot of shorts (or shares short) that want to drive the price down. However, some view this as a positive as any good news can force all the shorts to cover. There are also different views on days to cover. MTTR shows 6 days. Some view higher numbers, such as 10, as positive as it means there could be a sustained rally if the shorts have to spread out their buying over a longer period rather than a quick spike.

What short interest levels and number of days to cover do you view as being positive or negative influences on a stock price?
Thanks