Investment Q&A

Q: Do you figure there's much to this weakening USD trend or it's likely a short term fad?

Q: Hi Peter, Ryan and Team,

From my readings about RESP, the maximum contribution per child is $50,000. What options are there once we reach that limit? Continue investing in an in-trust trading account ?

Thanks.

Q: There has been a lot of talk about inflation recently.
A lot of people will typically flock to gold, but if the currencies devalue, won't all assets appreciate in price, including real estate and stock? My question is - what is likely to appreciate faster: gold, real estate, or stocks?

Q: Any thoughts on how the pound will fare in the next 6 months? My thoughts are that the Great Britain needs the EU more than the EU needs Great Britain. My guess the EU will play a little "hardball" with Britain so the value of the pound will decline. Of course a declining pound should help British exports...just like a weak currency helps Canadian exports. I'm not intending to short the pound. Just curious. (A pound currency at one point was backed by a pound of silver. Now the pound currency is worth about a tenth of one ounce of silver. I believe we call that inflation!)
Regards,
Jim

Q: As electric cars gain traction do you see this having a benefit for utility stocks over the next 3 to 5 years? I'm thinking people will charge up their cars overnight increasing the demand load for the utilities. Possibly the utilities will need to upgrade their infrastructure so there might be up-grade costs. Possibly 3 to 5 years is too short a time for electric cars to have much of a presence. Utilities are regulated (I think) so all rate increases I suppose would need to be approved by regulatory government agencies which may baulk at any rate increases. Any thoughts you have would be appreciated.
Jim

Q: Can you weigh in about US pre-election jitters and what might happen in the stock market this go around?

Q: Modern Monetary Theory appears to be gaining increasing acceptance. If Western governments were to adopt this Theory, what do you believe the impact would be to investment portfolios? What investment classes do you believe would do well, and what investment classes would do poorly? Do you see this Theory as causing a change to portfolio allocations amongst investment classes?

Thank you for your wonderful and thoughtful insights.

Q: My question is about utilities but we could extend it to any enterprise - it really deals with governments not letting the (often painful) market forces of capitalism take over. I'm not some kind of anti-government fanatic but I know true (unfortunately painful-now) market forces are being and will be suppressed more by cash-strapped governments facing a popular backlash.

I've come across a story where the British government may turn to forcing regulated utilities to accept lower profitability and thus lower dividend payouts to help keep utility bills down for the consumer.

Utilities may argue they can't provide reliable services without higher rates but it seems any company delivering 4-8%+ dividends wouldn't get much sympathy from cash-starved governments in a sub 1% interest rate environment.

With rising political pressure from financially strapped consumers would governments view regulating profits of utilities, banks and others as a great way to boost their popularity?

Q: Hi Guys,

Delighted to be a member of this community. Your advice and thinking has been invaluable.

I've been on a long search with what to do with the conservative part of my (and my elderly mother's) portfolio.

The prevailing sentiment seems to be that cash and bonds are safe, and anything touching on equities are higher risk.

I question the bonds though. They go up and down quite a bit during normal times and went down quite a lot during the crash.

Meanwhile, big low volatility companies like Microsoft, CNR and many of the stocks you've recommend as defensive stocks seems to steadily grow during normal times and, when there is a shock, recover quickly.

In short, the defensive stocks seem less risky than the bonds and seem a better option for the conservative money. Am I mistaken in my thinking? Is the industry just stuck in a paradigm of thinking that bonds are the safest thing next to cash?

In that frame, I'd also like to ask where low volatility, dividend and preferred share ETFs sit on that spectrum of safety.

Thanks, as always, for your wisdom.

Kevin

Q: I am looking at buying some ETF 's from the balanced ETF portfolio as and just wanted to know if starting at a 2% position is good for now and increase later or should I buy up to 3% as I do have the funds to buy up to a 3% weight.

Thanks

Q: I'd like to adjust the split between the Canadian and US equities in my employer-sponsored RRSP. Currently the portfolio is 81% in a Canadian equity fund and only 3% in a US equity fund (the remaining 16% in an international fund). What would you consider a more appropriate Canada-US split than 81% vs 3%? Also, ongoing contributions are being made 100% to the Canadian equity fund. As with the existing portfolio, what would you suggest as a more appropriate Canada-US split for future plan contributions going forward? Looking at a 3-5 year timeline and more potential opportunities and growth on the US side of things. Thanks.

Q: Hi 5i Team - I have been reading an article in the Globe and Mail about the resurgence of investor interest in the biotech sector with a number of IPO's either recent or planned. Would you be able to recommend a few Canadian companies in this sector based on the following criteria: solid management, cash reserves for at least one year and preferably more, manageable debt, good growth prospects, any size capitalization but small to mid cap preferred, any risk level but not something that is purely speculative. These companies do not have to be on the forefront of Coronavirus research but could have innovative research into any health platforms. I am also interested in the U.S. side of this but will do this in another question. Thanks.
Rob

Q: I have heard comments from diverse sources that there will be a massive movement of investment from bonds into equities at some point. Would you comment on this topic as to what catalysts could cause such a move. Does 5I agree with the concept? Has such a shift happened in the past?

Thank You
Clarence

Q: Hi,
This is about parking one's cash.

I know I have "slightly" less cash than Mr. Warren Buffet :))

But whenever I read that people like him have 134 BILLION dollars in cash or other Mega rich people sitting on the sidelines with literally hundreds of Millions of dollars, I have always wondered where these ultra rich people park their money?!
We the ordinary folks are struggling to get 0.65%. The same for them too?

Your answers have always suggested GICs, High Interest Savings Account and ETFs like PSA and very rarely Income ETFS/Mutual funds.

Any new suggestions?

Q: Large firms have outperformed small firms for a number of years. What conditions will need to occur for this trend to reverse, and for small firms to start outperforming large firms?

Many thanks for your insightful advice.

Q: Growth stocks have outperformed value stocks for a number of years. My understanding is that growth stocks are currently at an all time high relative to value stocks. Presumably, at some point, this trend will reverse and value stocks will begin to outperform growth stocks.

Do you have any thoughts as to how much longer the growth outperformance will continue? What conditions should an investor watch for, to be able to detect the switch when it occurs, to outperformance by value stocks?

Many thanks for your insightful advice.

Q: I have been following the cirque du soleil story in the news.
I was surprised to see how much say the existing shareholders seem to have in the restructuring process. I thought the lenders were always in the driver seat in case of insolvency. Can you please provide your comments and clarify what s going on there. I understand it is not a public company. I just find the topic interesting. Thank you!

Q: What's the reason that tech stocks are down across the board today (e.g., KXS, LSPD, etc.)?

Q: Peter,

Do you or any members know of reputable firms that sell financial planning software for the individual user? This would involve when to draw down RRIF, when to start CPP, clawback of OAS etc.

Thank you

Paul

Q: I look at the Fair Value published by Mornngstar for stocks. I noticed that the published values almost change daily. Why? What triggers the volatility of the values? Thanks.