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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Dear 5i,

does VIXY behave like a leveraged ETF such that they are not suitable for buy and hold investors. I understand that leveraged ETF's reset every day and there is price erosion so they are only suitable for short term investing. Would VIXY be ok for a buy and hold investor who believes that there was going to be a significant correction in the overall US market in the medium to long term? Your thoughts are much appreciated.
Read Answer Asked by Ian on October 15, 2021
Q: Retired, dividend-income investor, who usually follows a fully invested, buy-and-hold strategy for the long term but trims-adds around core positions to achieve the targeted asset allocation. I currently have <4% cash in the combined family portfolio.

Question #1 = for new monies into my wife's account as they become available, please rank the order in which you would invest into BCE, LNF, NWC....and why? I'm looking at where is the most Total Return upside over the foreseeable future. Ignore asset allocation, I've got that covered.

Q#2 = ditto for my account, please rank for new money investment into LIFE, ZRE, BNS, WSP...and why?

2 questions...please deduct 2 credits.

Thanks for your help, much appreciated.....Steve
Read Answer Asked by Stephen on October 13, 2021
Q: Your Portfolio Analyzer tells me that I need more 'Healthcare" since I only have UNH and Well. Can you suggest an addition?

It also noted that I have zero consumer defensive. Can you suggest two for this sector.

A further note was being over weight in Canada.

Thanks again! Dan
Read Answer Asked by Danny-boy on October 08, 2021
Q: Given the consensus opinion that rates are likely to rise, do you perceive a risk that the US dollar might spike, driving down the price of commodities, especially oil? Could a 2014 scenario be in the cards?

If the dollar does rise significantly, could oil/gas rise in tandem? Would you be inclined to position a portfolio for higher oil and gas prices in the coming year or so, regardless of what the dollar does?
Read Answer Asked by Brian on October 07, 2021
Q: Following up on Mary's question about compelling buys, can you explain why each stock made your list?
Read Answer Asked on October 05, 2021
Q: Nasdaq is down again today (Monday) after a period of many down days. Sentiment right now is poor. Can you provide insight on what is happening and when and how this will reverse trend? Is this a time to be buying or sitting tight and waiting for things to start to turn?
Read Answer Asked on October 04, 2021
Q: About 1 year ago you provided some general guidance on a retirement portfolio and I’m wondering what changes, if any, you might recommend given another year has passed. I’m not looking for specific guidance but rather suggestions for me to investigate further given how the investing landscape has changed this past year. Retirement horizon is 5 years and the portfolio has the following holdings: ZAG(26%), ZSP (3%), CDZ(65%), ZEA(6%). We have a large cash position that we’re ready to deploy. First, what is your take on the viability and allocation of the current holdings? Second, what are some ETF suggestions for the cash - add to existing ETFs or do you have alternative funds you’d recommend for us to investigate. Thanks so much!
Read Answer Asked by Warren on October 04, 2021
Q: Am looking at Magna for my TFSA with a 2 year rebound focus. The chip shortage seems to be depressing the stock ; would a 2 year period to fix the shortage seem reasonable ? It looks like a battle is looming to acquire Veoneer and the stock has been hitting lower highs over the last 6 months. Would you wait and see how the takeover ends, see some turnaround in the chip market ? In essence, buy now or wait until some clarity on these issues ? Thanks . Derek
Read Answer Asked by Derek on September 30, 2021
Q: I once read that the correlation between the price of gold and inflation is only about 60%; i.e., not very strong. Do you have any data to show otherwise?
Read Answer Asked by richard on September 30, 2021
Q: In the interests of proactively rebalancing my portfolio for the coming year, I'd appreciate your recommendations on the sectors you would be inclined to overweight in 2022...and those you would underweight. On a related note, my tech stocks have now grown to 21% of my total holdings. As a recent retiree - with a solid pension, reasonable risk tolerance, and relatively balanced portfolio - would you be comfortable with that weighting? If not, what would you advise? (As a loyal 5i reader, I'm mindful that portfolio weightings are a personal call.) Thank you.
Read Answer Asked by Maureen on September 29, 2021
Q: Hi Team,
My tech/ growth portfolio is getting massacred today on the spike in 10yr yields again. Should I be holding or dumping some stock to raise cash?? Your opinion would be much appreciated . Thanks

Shane
Read Answer Asked by Shane on September 28, 2021
Q: Can you offer 5 companies in Canada and the US that have pricing power in the face of inflation? Thank you
Read Answer Asked by hal on September 28, 2021
Q: Bloomberg is saying today "Tech stocks sell off amid spike in treasury yields". Can you please explain what the spike in yields is referring to, how much is the spike, will it move somewhat predictably with the withdrawl of govt liquidity from the market, etc?
For a retiree, should I do something?
Really appreciate your clear views. Many thanks
Read Answer Asked by TOM on September 27, 2021
Q: The markets pre-COVID were rising at a reasonable rate year to year, with the odd market downturn. Since March/April 2020 the markets have shot up and stocks are trading at much higher multiples than pre-COVID. Eventually, reality may kick-in. There are many companies trading at very high evaluations. If you look at the overall market (i.e. Nasdaq) you see an exponential growth curve for the past 18 months, definitely not sustainable and possibly overpriced.? I still buy stocks but sometimes feel that if the market turns around, it could be years for it to come back. (I am more concerned about companies such as SHOP, NVEI, TTD, LSPD, NVDA, TOI, UPST, ... all of which are great companies but if we overpay, payback could be much more than 5 years.) I thought same about Netflix, I was totally wrong and missed out on one of the biggest lifetime opportunities BUT there must be a point where the price is definitely too high. Are we overpaying? Will we regret this at some point? Your thoughts? Thanks.
Read Answer Asked by Walter on September 27, 2021
Q: In the most recent edition of "Canadian Money Saver", you commented: "After many years of solid gains, the ride may get a bit bumpier next year." Black swan events notwithstanding, compared to today, where do you think the market will be at the end of 2022? Thank you.
Read Answer Asked by Maureen on September 27, 2021
Q: Failure of the US Congress to raise the debt ceiling is being described as catastrophic in WSJ and other business journals. We should never presume anything with this US government. If this happens the market could tank big time. I am concerned there is too much complacency in the market right now. I would be interested to read your comments.
Read Answer Asked by Murray on September 27, 2021
Q: Hi 5i Team,

What is a good heuristic to use for a diversified portfolio with respect to the percentage allocation for the largest equity holding? For example, the Berkshire Hathaway portfolio has a portfolio weighting of more than 41% invested in AAPL. This represents a significant overweighting of one stock in comparison to the weighting of AAPL in the S&P 500 Index and Nasdaq 100 Index, which hold 6.1% and 10.9% in AAPL, respectively.

If one has a very strong belief in the superior expected returns of a company or ETF, for example, AAPL or QQQ, what is the upper percentage allocation one should assign for your largest equity holding? Is it 10%, 15%, 20%, 25%, 30%, 35% or 40%? What rule of thumb is reasonable for a well-diversified portfolio.

Your comments on the above is much appreciated.

Thanks George
Read Answer Asked by George on September 24, 2021
Q: Hi 5i, my question is on asset allocation and I know this is a personal question. That said, I'm getting older and capital preservation is even more important to me now. I'm thinking 6% gold, 15% cash, 10% REITs, 15% fixed income (including preferred shares), and the rest (54%) in stocks throughout the world but mostly North American based. Is this reasonable for someone that's getting older? and am I missing any asset classes.
Thanks
Read Answer Asked by Mark on September 24, 2021