Investment Q&A

Q: Dear Peter and Ryan.

I did not sell any stocks yet and my portfolio incurred significant loss lately. I was going to ride through the drop. Now I started to doubt my decision. How do you think about the tension/war between Russian and Ukraine, in addition to rising interest rates? If you don't recommend selling now, do you think it is an opportunity to buy more?

Thank you

Yiwen in panic mode :-)

Q: We know uncertainty helps the markets drop. With Russia saying they are drawing back troops and NATO and USA say they are building up, one could anticipate uncertainty ahead. With this in mind, is there any advice for which type of stock might be the best to buy on a future dip?

Q: What conditions do you think are required for confidence to return for growth stocks with good fundamentals? Thanks!

Q: Being "salevicted" by the landlord after receiving an N-11 termination of tenancy notice. Offered first right of refusal on a purchase of it in today's unsustainable housing market. Have obtained an approval for a mortgage from the bank.
I am 70, retired and live on my pensions including a 10% monthly saving transfer to cash account. Portfolio income mostly reinvested.

My Issue is how best to raise 20% down payment from my investment portfolio built over last five years based a lot on 5i sample portfolio models, so 33 (model suggestion) holdings across all three portfolios today plus another 25 other ones all held in my cash and TFSA accounts in mostly a diversified total portfolio (no sector is more than 15%). Do I sell losers first in cash and also those that have not grown very much conserving the dividend payers, then draw some from growth oriented TFSA before before returning to cash to trim some good performers?
What strategy would you suggest for raising the down payment money and minimizing and delaying the tax as well as respecting a diversified and growing portfolio objective while treating mortgage payments as more costly "rent"?

Q: what are your top three picks ,us and cdn, for consumer staples thanks

Q: If or when war in Eastern Europe erupts, which sectors of North American markets would be affected the worst/the least?

Q: Hi 5i, In these times of increasing interest rates, what are types of companies to avoid buying stocks in Regards, Ron

Q: Hi,
Inflation came in hot again today in the U.S. Do you guys have a view of the dot plot? Some economists see the Fed hiking rates 5-6 times this year with a 50 BPS thrown in for good measure. Others see a less aggressive FED with 3-4 rate hikes.

Also, the renewable energy names all seem to be making a nice bottom in the past month or so. Could they be signaling that the rate hikes may now be baked into these names?
Thanks again.

Q: I expected a blood bath this am with CPI at 7.5% and 10 year hitting 2%. The reaction is surprisingly mild. Even ARKK is up! Your thoughts please.
In spite of your 'do nothing headline' I checked out in January. Thinking of averaging back in or waiting for the Fed in March. What would you suggest?
Thanks Peter.

Q: David Burrows is one of my favourite analysts. On BNN today, he indicated that he feels we have transitioned from a period of falling interest rates that has seen a few sectors, particularly commodities stocks, perform very poorly, while other sectors, particularly technology, have been bid up to very high levels. He believes we are into a new inflationary cycle that will greatly benefit different sectors in the long term, particularly commodities like metals and O & G stocks. He feels that money managers are using high priced technology and other similar stocks that worked in a deflationary environment as sources of cash and putting that money into sectors that will benefit from inflation, and that this could go on for years. Wondering what your take would be on this as a likelihood over the next several years.

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