Investment Q&A

Q: Hello 5i
I have read recently that several US analysts think that the Canadian market will do better than the US this year. T Rowe Price was the most recent one in the National Post, i think. Wondering what you think of this thesis. And if you believe it, how would you organize to profit from it? I imagine the thesis has a lot to do with resources with the possible re opening of China. Is there, for instance, a good etf? Or, what stocks would you choose to create your own etf substitute?
Thanks as always for your excellent advice

Q: Hi,
I was bit surprised by your answer to Kevin's question today about your sector preferences. You had chosen the following: XIT/XRE/XFN/XLY/XLV.

I thought given the current possible recession scenario lurking in the background and also from your own answers to others, you would have chosen XLP, soft or hard landing people need Staples to survive, XEG because of all the uncertainties, XBM/GLD as one expects demand to go up when China opens up. Plus as a hedge against the USD going down.

There must be a reason for your choice. I am curious to find what your rationale was/is.

Q: Good morning,

Following the sale of XLF in my US$ Non registered account for tax loss reasons, I'm considering the purchase of an Energy ETF.

Q1. Between XEG in Canada and XLE in the US, which do you prefer and which d you think has a better risk reward profile?

Q2. Assuming you prefer the Canadian market for the Energy sector, is there another Energy ETF in Canada that you would prefer to XEG?

Thank you and I'll await your response.

Q: Hi,
O&G sector is taking a beating!
Is this downtrend going to be sustained or short lived?
What is your prediction going forward for the O&G sector in general? For the medium term, say one year.
Add to one's position or shed some or stay the course?
The perma oil bulls like Eric Nuttal are saying stay positive! Others especially Technical Analysts seem to be ringing warning bells.
Curious to know where you stand.
Many thanks.

Q: Hi,
What do you think about the so called "windfall tax"? If O&G companies are going to be taxed for share buy backs, is it good or bad news for the shareholders? Should I add to my already held positions or sell and lighten up a little?
I saw briefly on Twitter feed Eric Nuttall thinks it's actually one of the few taxes that can be good for O&G stocks. I couldn't find his entire statement. So forgive me if I am misquoting Eric.

Q: Hi, TRP and ENB had a bad day with both stocks declining 2.5%, by close. There was no specific news for either company. Oil was weak today and price dropped about $2.50-$3, during course of the day.
My understanding is that movement in oil prices has no direct impact on these stocks, in a meaningful way. XEG, on the other hand was down just less than 1%. Was TRP/ENB drop unusual ? Thanks

Q: Hi, Any comments/change about our Energy Sector Holdings strategy of 7.5-10% weighting, in light of Oil prices tumbling below US$100 today. Oil and Gas equities are taking a big hit and now trading back at the most recent lows made a few weeks ago when oil price dropped to $104. Do you think, sector could see more pressure in coming weeks/months, with fear of recession growing ? Is any action warranted ?Thank You

Q: Hi, Energy sector was creamed today with 5% decline on the top of 15-20% drop over past week. I also learnt from CNBC that many large investors are buying significant amount of September Puts. We trimmed 25% of our 10% Energy weighting, selling XLE, XEG,CNQ and TOU, mostly at market open. Do you believe , Energy sector could be range bound for near term and has further downside ? Would it be prudent to cut the sector weight to 5%, in General, without being specific to our portfolio ? Which companies would you reduce, in order of priority, among, CNQ, TOU and SU, based on balance sheets and possible further downside caused by Oil/Gas price and recession ? Thanks

Q: Hi, Oil and Gas sector has come under pressure for past two weeks, with above equities declining 20-30% from their respective highs. Volatility in oil and gas prices could be a reason and other days, it could simply be in sympathy with general markets.
This is in the backdrop of analysts forecasting very strong cash flow generation by all these companies, resulting in outsized shareholder returns and much higher equity prices. We have 10% weighting in the sector ( Not including 5.5% ENB ). Based on the geo-political, demand/supply and other relevant factors, do you believe, this sector still has legs, say another 6-12 months or longer and equities should recover over time. Also, what would cause, in your opinion, for market to change course for this sector, in near future. Thank You

Q: Hi, A follow up to my question earlier. Do you think, the sharp drop in oil price on Friday and recent weakness in Oil and Gas equities could have been triggered by recession fears ? If this is one of the reasons, with more rate hikes in the cards and probability of a recession going up, in your view, how is the Energy sector likely to hold ? How does a retail investor position for next 6-12 months ? Thanks again

Q: I have the above in my TFSA along with 5 individual stocks currently.
Any gapes or duplication in the ETFs, Should I just add to each equally with any new contributions to an approx 10-12 % weighting for all and thereafter considerate on individual stocks for more growth torque.

Q: What is your opinion of this ETF for a core long term holding for exposure to the oil and gas industry? Is the MER high/low in your opinion. What alternatives if any would you suggest? Thanks

Q: I am always confused on days like this when Canadian oils go one way and American oils the other. I would have thought the sectors would both move mostly in tandem guided by oil and gas prices. But, not for the first time, XEG is down today while XLE is up. Why would that be? Yes, it is a bad market day, but ALL my US oils are up strongly while many of the Canadians (TOU in particular) are down. BTW, what % of a diversified portfolio would you devote to oils and gas today? Should pipelines be included in that consideration?

Q: I have pipeline exposure but no direct oil investments. Would you recommend an oil company? Perhaps Chevron or a Canadian oil company or an oil ETF?

Thanks

Q: Can you suggest some good options in this sector. Thanks

Q: I am looking for Core Growth ETF similar to XGRO but with a higher concentration of exposure to energy & materials than XGRO. any suggestions

Q: Hi,

I am interested in $Cdn ETFs that are designed for inflation and where the underlying securities have pricing power? If any, do you have a favourite? If you have a favourite, the reasons why?

Many Thanks,
Derek

Q: As per your team Industrials, tech and materials/energy can be decent sectors in times of inflation.

Can you please recommend USA & Cdn ETF that you would consider holding in each above sector.

Thanks for the great service.

Q: Hello Peter,
With rising rates, it seems that banks, commodities and industrials do well. Can you please suggest some etfs in Canada that would take advantage of those sectors? For the banks, i am thinking xfn and zeb but unsure of the others. Also, the US banks are taking small hits. Do you think canadian banks will follow suit or are they very different? Thanks very much.

Q: A few weeks ago I asked about the virtues of owning XLE vs XEG. I ended up buying 5 postions in the following: TOU, KEL, WCP, ARX, TVE. Energy is now 3.5% of my overall portfolio.

My question is the following: for US exposure: may you please provide me your highest conviction name. If you had to chose between this US energy name an DIS for a total return in the next twelve months, which of the two would you side with?

Also, for the next twelve months, what portfolio allocation to energy would you deem optimal, given the current macro environnement?

Thank you and please deduct credits as you see fit.