Investment Q&A

Q: Can you please tell me your top 5 investment themes that you would start to add to your portfolio (at these levels) for a mid to longer term hold.

Q: my question is on sector allocation. What would be the asset % in order of preference for a person who is 70 but does not need the funds for another 3 years...please also include the top 3 stocks or ETF allocated to each sector ( can be Cad Or US thanks for your help on this

Q: Thank you for your guidance during this challenging time.

I have followed all of the questions and answers about allocating capital during the downturn. The message of putting money to work gradually is rational and rings loud and clear. But, past bear markets took several months before a bottom was put in so why not wait at least one month to start and allow for a bit of a bottoming process? Does it make sense to begin allocating capital at the very onset of a global recession of unknown duration and severity?

Q: Someday soon the sun will rise and shine brightly. This new day we will see inflation arrive at our front door with a loud bang. Inflation will arrive quicker than we think due to a significant increase in money being printed from all countries. During inflationary times what sectors are good investments and what companies would excel.
Clayton

Q: Do you think this rally is sustainable? The markets have really rallied lately and was wondering if a guy should lighten up a bit.

Q: if this relief rally continues tomorrow does it make sense to trim some good stocks if I like liquidity

Q: Good morning, with current market turbulence does 60/40 index investing formula still make sense or is one better investing is good growth stocks for the long term?

Q: Good Morning

The goverments are doing the right thing by adding a huge amount of liquidity in the system.I agree with this, but..
at one point in time, you have to pay the piper

what are your thoughts on this

Q: I read an article that suggest that the US has essentially moved the FED's role to the Treasury Dept, thereby giving control (more at least) to the Trump admin. First, do you see this as the case, and second, if they were to devalue the US dollar as Trump has often called for to better compete with the world, and this brought structural support to the political move away from China and ROTW imports and boosted a reemergence of the US manufacturing/supply-chain system, what companies would look like a steal today ten years from now?

Q: When someone puts on a hedge overlay to protect profits on
portfolio what exactly is one doing. Should your clients be doing it
and is it easy to do.Can u give an example
tnx u.

Q: RE: Asked by Terence on March 30, 2020 - $1.3 million in stocks presently sitting with $800K (90 % cash).

Hi. I'm (60 & retired) in similar situation; understand everyone's different. Planning a similar strategy to what 5i suggested, but starting with a more conservative ETF (i.e. VCNS or even VCIP) for a period (i.e. 3 months), transitioning (on a strict schedule or market declines %) to VBAL once market volatility declines. I used to be a VGRO-type investor, but after -15% YTD, I've seen the light & am now a converted VBAL-type.
>> What is 5i's opinion of this transition strategy? <<

Also plan to add some Gold [PHYS] soon, and carefully/slowly add a few choice solid stocks (i.e. CSU, BAM.A, MSFT),
maintaining asset mix, over next 6 months.
>> What to do you thing of this Hybrid (ETFs + Stocks) approach? <<
>> My schedule was over 6 months; 5i is suggesting 12 months; can you explain rational of 5i's 'extend' period? <<

As always, thank you for your sound advice.

Q: Hi All at 5i!
I read an article by Jeff Booth entitled” Jolted awake from an economic fantasy “, in the Globe and Mail on Saturday. Basically, Jeff gave an example of a saver and a person who took on a large quantity of debt and kept doing so. In 2008 , when there should have been an economic reckoning ,the Saver was punished , but the indebted person was rewarded by the government pumping liquidity into the market, thus fuelling the economy with even more debt, and not allowing things to fail as a capitalistic market would dictate. So now, with this virus, and more government indebtedness, to help the country, where will this leave us? Will we be kicking the can of economic collapse further down the road? I am just trying to figure out the economic implications of all this, with my limited insight, as economics is not my area of expertise and I am getting a headache. I was hoping you could comment. I am heading into retirement, and am just wondering how I should position myself to safeguard my savings ...the market is unstable and the GICs are punishing the savers...again. Thanks, Tamara

Q: Good morning,
My grand childrens' (8 years old) in trust accounts each have $60K in CASH and would appreciate your thoughts and comment on the merits of my following investment plan:
Q1. Investing $20K in each of these funds (HXS, HXT and HXQ) and not selling any of them until the children are 18 years old at which time they would each open a TFSA account and start transferring each year the maximum annual TFSA contribution allowable from their non registered account to their newly opened TFSA account; and
Q2. Assuming that you are ok with the above plan and given that there may well be still a further sell off in all three sectors, when would you recommend initiating a full or partial position in all three sectors? Thank you.
Francesco

Q: Dear 5i,

Can you provide some ideas where one might invest some cash if we have negative interest rates.
Should we be borrowing money to take advantage of negative interest rates?
Do you think negative interest rates would inflate the Canadian real estate market prices?
What observations have you made from European negative interest rate policies?

thanks

Q: Hope everyone at 5i is doing well in these times!

I have been sitting on mostly cash in my RRSP/LIRA and would like your recommendations on the best ETFs to consider for my full US and International exposure. All of these would need to be listed on the TSX as I am purchasing in CAD $. While I know you prefer non-hedged, I’d greatly appreciate if you could explain benefits/workings of hedged vs. non-hedged considering the current environment. And provide ETF recommendations for each.

I am looking to achieve a balance of diversification, reasonable MER, minimizing any withholding tax while optimizing the potential in market recovery. For US, I would like to have a technology ETF, health care ETF and a broader spectrum ETF – but also open to ideas. Also, looking for recommendations on International – one broad ETF or perhaps that and a mix of ETFs. I recognize there can be overlap (e.g. between a tech and broad sector fund), so if you can give me a sense of the degree of duplication that may be present in your recommendations. Perhaps going heavier on tech right now could be a good thing.

While I started off thinking ETF selections would be relatively simple, in reading various Q&A there seem to be many important considerations - your assistance is appreciated. Again, all of these are being purchased in RRSP/LIRA accounts with the goal of optimizing my returns over a 10 year window.

Q: Hi Guys
a bit of a conundrum here, i came into the crash with 45% cash hoping to buy some U.S. stocks, but the low CDN dollar is making me question whether it's worth it. I'm usually a long term holder, buy U.S. stocks for their dividend growth over time. Whats the most you would be willing to pay for a U.S. dollar when buying U.S. companies, my thinking is around $1.40/ $1.41 is this to high?
thanks Gord

Q: Do large pension plans such as CPP and other provincial plans carry a portion of their holding in cash, with the thought of taking advantage of severe drops in the markets

Q: I understand that the market is forward-looking. What has been difficult for me to ascertain, especially in these tumultuous times, is how forward-looking they are. I realize no one knows the future so we all have to decide for ourselves how long we think COVID19 will continue to roil the markets. But is there any way to know (guestimate) how far out the market currently thinks this will last? For example, I am writing this question on Sunday and wondering how the markets will react come Monday. Personally, I feel the increase in cases and apparent disarray in the leadership in the US is unfolding as I anticipated it would. Would a steep downturn in the markets Monday morning suggest analysts had it wrong or would it not really tell us much regarding the anticipated future? I guess I am looking for an indicator like the percentage chance that is assigned as to whether or not the Fed will change interest rates. Don't know where that percentage comes from but it always seems rather accurate.

Appreciate your insight and for your wisdom. It's helping me to keep off the proverbial ledge!

Paul F.

Q: Last year I took a sizeable position in VEE as one of the main parts of my foreign diversification. It has, like so much else, dropped a lot. I am wondering if the prospects for recovery in the emerging markets are not as favourable as the potential in the US or Canada, where economic resources (or the ability to backstop printed money) are stronger. As such, I am inclined to sell this position (and as you point out, harvest a tax loss) and migrate to some North America holding(s). Your comments, pls. Thanks for your excellent service.

Q: Hi guys,

Thanks for your valuable advice.

I am trying to process the wild swings going on and the lagging advice coming out through business news channels. With the new upswing in the markets, everyone is now proposing what we should have bought (and could still do). This is frustrating as it was good advice a week ago, and things will surely change again.

While we all understand that there is no crystal ball, what do you feel are likely scenarios for markets as investors process central bank and legislator market stimulants?
It appears that investment strategy is now heavily influenced by what has dropped, in combination with highly likely to be supported by government as critical assets.
If you could suggest any further insight in future direction or departures from recent strategy, and whether you feel that the government interventions are likely to hold us at a V shaped market curve, that would be helpful.

Thanks,

Peter