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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: I am a long time subscriber and an avid reader of the Q&A. Even with all I have learned, I am still having a difficult time understanding how to invest the fixed income portion of my portfolio. I want fixed income to provide portfolio stability by protecting on the downside while offering the possibility of capital gains along with some income.

I am a buy and hold investor on the equity side and I am comfortable deciding when to sell a company. However, the fixed income side seems to demand a more active approach - or does it? For example, you have been suggesting that interest rates seem likely to decline in the coming months so that would favour long term bonds. But for stability, or as an offset in case I am wrong, should I also hold short term notes? Should my fixed income portion be split 1/3, 1/3, 1/3 among cash, short term and long term and just left at that or is it necessary to continually monitor and adjust these weightings? Or is there one fund that does all that already?

Appreciate your insight.

Paul F.
Read Answer Asked by Paul on March 02, 2020
Q: I notice that you are getting questions about what to buy when the market settles and it seems people are expecting this to happen soon. But isn't this something that could take a year or two, as closing plants down,people not travelling and buying things will reduce earnings and put us into a recession?
Read Answer Asked by Pamela on March 02, 2020
Q: Can you give your current thoughts on this company please? What is the growth outlook and how does the balance sheet look? Would you recommend anything else in the US instaed? Thank you
Read Answer Asked by Cory on March 02, 2020
Q: Could you review the situation with covered call ETFs during this type of market where everything is dropping?
Do you buy covered call ETFs to obtain income?
Do you sell your covered call ETFs?
Do you wait until the market moves upward before buying a covered call ETF?
Do you simply stay away when the market turns and buy the individual security?

Thanks....
Read Answer Asked by Ronald on March 02, 2020
Q: With both stocks below the takeover offers. While CGX is waiting to complete the transaction and TRZ is waiting regulators approval, what is your assessment of risk in buying a position in either or both companies.

Thanks
Read Answer Asked by Saad on March 02, 2020
Q: Hello 5i team,
I've held a good number of stocks you hold in your BE portfolio and I've managed to obtain a 14% compound annual total return in the last 11 years.
100% of my portfolio is in equities; I'll be shortly 77 years old and plan to reduce my equity exposure to 30%, with the above stocks in mind.
Your opinion is most valuable
Antoine
Read Answer Asked by Antoine on March 02, 2020
Q: Two questions: i) You have previously voiced concerns with respect to NFI production control issues and ii) there appear to have been several additional contract awards to NFI in recent weeks. Do you consider the production issues have now been addressed and no longer a concern and, do the additional/cumulative contract awards represent a significant improvement in this company's outlook and is this a decisive move by purchasers of mass transit vehicles? I appreciate there is unlikely to be a short term profit bump but if there has been a productive move or change in purchasing trends do you expect the benefits will mostly accrue to this company and in the longer term. Thank you for your response.
Read Answer Asked by Mike on March 02, 2020
Q: I'm curious about what happened to REITs and utilities on Friday. They got absolutely hammered. Some of the utilities, in particular, like Boralex and Capital Power were down 6%-8%. Both sectors plunged like anvils. They performed worse than most tech stocks, yet the fears over the virus should not be able to impact their revenue and profit at all. Do you have any ideas here?
Read Answer Asked by John on March 02, 2020
Q: You have probably answered similar questions but are there any companies you would buy here given the market turmoil? In particular, are there names that stand out in the sense that there are babies thrown out with the bathwater that are relatively immune to what's going on and because of strong balance sheets may actually “benefit” relative to their competition. Could you suggest some med. to large cap Canadian and US stocks that stand out to you? Thanks!
Read Answer Asked by Steven on March 02, 2020
Q: My brother did a Ph.D in the area of virus research, at M.I.T. He has zero interest in stocks. He was able to tell us 1 thing regarding this event, it's that Europe, Canada and the U.S.A are currently in what he calls Phase I of the virus breakout (out of 3 phases) and that statistically, the death cases should be much higher in about 2 weeks. This of course might not translate to the equity market, but probably means that worst looking headlines are coming. My plan is to wait 2 weeks and then, start buying on margin *IF* the market is lower than today. Here's my question. Considering that the cost of the loan is 4.95% (all-in-one mortgage from NBC), how much of a drop from today (SP500 is at 2950) would you recommend buying the U.S index? Thank you.
Read Answer Asked by Matt on March 02, 2020
Q: Has the expansion of the US Fed balance sheet since 2008 contributed to the performance of the markets by keeping interest rates low?
Given the last week of market activity, do you think the US Fed will lean towards cutting the discount rate shortly?
Do you think that this is the appropriate policy response?
Why?
Should interest rates be as low as they are?
Does the US stock market need a low interest rate environment in order to do well?
Thank you.
Read Answer Asked by Wayne on March 02, 2020
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