Investment Q&A

Q: Hello Peter,
Thank you for your response to my question. I am sorry if part of the question was not clear.
I was not looking for a choice between SHOP and TOI, or NVDA/QCOM over others. What would perform better between now and the end of seasonal strength end Feb 2023? Tech (SHOP and TOI) ) or Energy and commodities? Growth ( NVDA and CRWD) or Value (QCOM and MSFT)?
In your mind, is there a clear winner that would justify a switch from one to the other and is it too late to sell and make the switch?
Nothing is for sure. Just your opinion.
Regards
Rajiv

Q: Hello 5i Team
Do you endorse shorting that Nasada index as a trade . Would the
SQQQ be one that can be used, I have never shorted a stock or a ETF .What is your advise doing so with today’s market?
Thanks

Q: Hi! I am wondering where you feel opportunities in the market exist. When oil was negative very few advisors were pounding the table to buy. It seems now looking back it was a no brainer and seems so foolish that I wasn't loading up on these bargains. Will we look back and say why didn't we buy high growth tech? Or, is it beaten up renewables/bond funds you favour if adding new money? Where do the opportunities lie based on current geopolitical risks and risk of recession/stagflation?

Q: Hello Peter,
I have been meaning to get your opinion even before the two-day wild ride and this question is not based on today’s aftermath. And I will speak from both sides of the fence. As usual, I want your perspective.
You typically respond to reader’s questions with a 5-year outlook. However, I think that the 5 yr business plan is outdated except maybe for utilities and commodity producers. And even then, with instantaneous data enabling policy definition, the peak to trough and back for business cycles are short.
High growth companies typically do not have a moat as they rely on transformative technology as the enabler. Today Amazon finds its digital commerce saturating and looks to cloud services for growth. Shopify is looking at vertical integration with logistics and financial services while the world moves towards open-source digital commerce. Game, set, match.
Now I step to the other side of the fence. Probability of a soft landing -very small? The fed cannot control supply but can control demand. Housing, lumber, commodities consumption diminishes just as supply ramps up in an inflationary environment hoping to absorb costs. Discretionary, industrials slow down and drag commodities.
Where am I going? If my thinking is correct, my investment decision should be based on a 2yr or shorter period return. So, between now April 5 and the end of seasonal strength next Feb; is it tech- SHOP and TOI, or Energy and Commodities? What about Gold and Silver? Is it NVDA and CRWD or QCOM and MSFT? And I am not looking to hedge but make portfolio changes, swinging for the fences. Or is it too late for sell in May?
I look forward to your opinion.
Regards

Q: With a 3 year time horizon what would be your Top 3 non technology Canadian and US Stocks to buy today?

Q: Hi Everyone at 5i!! I had the pleasure of reading Peter’s article, ‘’ 5 things Investors Rarely Think about Before Buying a Stock but should “ and it gave me good food for thought. I was wondering if 5i would put on a webinar about reading a stock’s financial reports, which help determine if a it is a good investment. I am aware of some things, but could really do with a comprehensive over view. For all I know you could have already provided such an over view and I missed it. If so, could you please provide me with a reference to the information . Cheers, Tamara

Q: Hello 5i Team
As interest rates are expected to increase to bring inflation down, at what interest level will some investors start switching in buying GIC as risk free asset?If that would happen could stock be negatively affect?
Thanks

Q: re your reply to a question today:
The issue in the current environment, however, is whether raising rates actually impacts the specific inflationary items we are seeing today (such as those caused by supply chain issues and the war).

Great point. You don't heard much discussion on that. If raising rates will not dampen inflation, then the Fed may just stop raising the rates. Don't these rate hikes add to the interest costs to government borrowing? Gov't debt is much more of as concern than private debt. The US has committed to to huge infrastructure spending. And that was before the war in Ukraine. Military spending has to increase. At the least, all those weapons have to be replaced.

Q: The great team, how is an increase in interest rate can lower inflation?

Q: Like many 5i customers my bond ETF's have been whacked over the last 6 months or so. I bailed on a couple of them in January (good move as it turns out) but am still exposed in my RRSP. Bonds still seem to be dropping but yields in general are up to the 3.5% range. My question is "with inflation running at around 6% at what point will the numbers (yield/market value bottom) make sense to start buying bonds again"?

Q: I've been looking at the regional and sector allocations of my investments at the total portfolio level (TFSA + RRSP + non-reg), generally buying growth stocks in the TFSA and safer stocks in the RRSP. Does it make sense to continue to look at the allocations and diversify at a portfolio level? Or should I also be looking at it for the 3 individual types of accounts separately?

Q: Will I get a dividend if the Ex-Div date is Apr. 27 and I buy a stock today? How the Settlement date of Apr. 29 will affect this transaction for the purpose of receiving the dividend?

Q: I noticed the question about "phantom" distributions. I was very surprised to see that the capital gains distributions at the end of the year which are rolled back into NAV show up as taxable but without the Return of Capital adjustment that is needed. So a RoC distribution that requires the ACB to be decreased is shown on T3s but when a phantom RoC distribution that requires the ACB to be increased to the benefit of unit holders is not shown on the T3. How many people are going to pay twice the amount of tax as they should on these distributions?

Q: Hello, I saw your answer to Stanley: “Bonds may look better next year, and may look better if the market weakens further.” We are expecting rates to climb, which will affect the bonds value. Normally, rates would already be higher at this stage of the economic cycle, and I would understand. I just don’t see the benefits of keeping bonds in ETFs with the current situation. We might as well hold cash or at least ST bond (held to maturity) for market protection. Could you help me understand? I am thinking about changing a portion of my portfolio (VBAL, XBAL MAW104) for a stock ETF / individual bond strategy.

Q: With interest rates on the rise how will this affect dividend paying stocks, dividend funds and ETFs. If not positive for this sector, what sector do you feel in your wisdom will benefit most?

Q: Thoughts on how to stomach all the volatility. Since I know you are not a fan of stop losses does one just grin and bear it. It's nice when some sectors are working but what does one do when all sectors potentially stop working? It seems there are so many unknowns which the market doesn't like. In your experience, what is it like to go through a bear market and what advice you you have for nervous retail investors. Your wisdom appreciated!

Q: Just following up on your perspective relative to market sentiment. I find that the Indices are misleading, in a very LARGE way. In fact the divergence between them and the overall breadth and performance of mid/small caps is incredibly large. What references should/could be used outside of the indices in order to gain a true reflection of overall stock performance.

Q: Further to your earlier answer on commodity prices dropping because of a rising US dollar...

Doesn't a rising US dollar actually HELP Canadian producers as they receive more for their products? And would that rise not be counteracted in any case by an anticipated further rise in Canadian rates - which would likely raise the CAN$? Is Mr. Market just reacting in a knee-jerk fashion here?

Q: The Canadian energy sector is taking a hit today (Apr 21) despite oil prices being up. What's behind this? Is it falling in sympathy with general commodities (metals, agriculture), which are also plummeting today?

Q: Hi Team,
Looking backwards with 20/20 hindsight vision…buying oil stocks at bottom basement levels a couple years ago is looking like it was the opportunity of generation with some names nearing 10x bagger levels off bottom and still climbing. I missed this opportunity . My question is today …are there any specific names or sectors that you see as if we bought today , that we might be looking back in 5yrs with the same type of view thankful that we bought in today? Please list your best ideas. Thanks!
Shane