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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: Hello
The Bank of Canada Target Rate is set at .25% until the Fourth Quarter of 2021.
However, I also noted that the forecast for the 5 year Government of Canada bond is different as follows:
Q2 2020......54%
Q3 2020.......63%
Q4 2020........75%
Q1 2021.........98%
Is it possible to have a gradual increase in the 5 year bond rate while the Bank rate is kept static at .25% ??
Thanks

Read Answer Asked by Terry on May 01, 2020
Q: What equities in Canada or USA do you consider cheap with great balance sheets.
Read Answer Asked by Albert on May 01, 2020
Q: A cure is a non-technical term so we need to be careful. Not to beat a dead horse (too much anyways)...Gilead is not offering a "cure" to Covid-19. Their drug was used as a treatment on USA patient 1 in Washington State, a young man who the doctors feared was dying from Covid-19. After receiving the injection he recovered almost immediately and was discharged from the hospital a few days later. Gilead's drug was entered into FDA trials and was shown to be effective for 30% of the people. While this percentage seems small the drug was considered so effective all the people on the placebo were put on the drug. Society is looking for a vaccine which will prevent people from getting Covid-19. This will likely prove more of a challenge to the health industry. Vaccines sometimes offer long term immunity but sometimes the immunity dies out - that is why we need Tetanus booster shots every 10 years or so. Dr. Fauci is on record as feeling a vaccine is "doable" by January 2021.
Publish if you feel this is useful.
Jim
Read Answer Asked by James on May 01, 2020
Q: SHELL apparently just cut its dividend for the first time since WW-II. Do you know if there are any rumblings about other big firms in the sector doing the same?
Many thanks in advance.
Read Answer Asked by TOM on May 01, 2020
Q: Received some BIPC shares from my holding in BIP.un. At the beginning both were equivalent in $ but now the spread is between $3 and $4. Although both are in my TSFA, should a consolidated all in BIPC before the spread get bigger?
Read Answer Asked by ray on May 01, 2020
Q: Hello, on several occasions you have suggested PHYS as a tool to invest in gold bullion. I see that there are two versions of PHYS, one is CA and the other is US. Which one would you recommend in a non registered account? Thanks, Gervais
Read Answer Asked by Gervais on May 01, 2020
Q: I've been in the market for about ten years. During that time a certain predictability has emerged in what sorts of stocks get most heavily hit during market routs such as today's., and what sorts of stocks are least damaged. That predictability has disappeared since February. In fact, when the market drops down heavily the stocks most likely to be hit hardest are the ones which used to be hit least, like utilities, REITs, banks, and other dividend stocks. Do you have an explanation for this? Shouldn't the low interest rates which make bonds unattractive protect these stocks to some extent?
Read Answer Asked by John on May 01, 2020
Q: Given the dividend cut today - does your view regarding the odds of cuts for Canadian Bank stocks as well as other blue chip Canadian dividend payers change. I realize that RDS is in a very tough industry right now but I would say the severity of the cut was pretty surprising and I wonder if there will be similar surprises in Canada for "undoubted" dividend payers in the past.
Read Answer Asked by Gary on May 01, 2020
Q: Hi 5i,

Inflation or deflation. What do you see as more likely over the next 12 months? I would think that inflation is the risk, but central banks opened the presses during 08/09 and we did not see huge inflation spike. I'm beginning to think deflation is the bigger risk as more people will not or can not spend more once the crisis is over.

TIA!
Read Answer Asked by Wayne on May 01, 2020
Q: Hello Peter,
The quarter beginning January is generally good for the market and this year was no exception until the time global economy was paralyzed by covid19. Now we are in May the time for sell and go away. Besides, history would suggest that the recovery does not happen in a straight line. I would like to know what probability you would give for a correction next couple of weeks, before /after the earnings season ends.
The recovery is usually led by large cap which has largely been the case and recently the small caps are showing signs of life as evidenced by the ETF IWO. I am fully invested participating in the recovery and here is the dilemma. Do I stay the course or should I trade the swing if there is a say a 70 percent or more probability of a correction happening soon. And I am not trying to be exact but reasonably close; and could do with your experience and expert opinion on this. And should I raise cash from large caps or the smaller growth stocks, almost all in the tech sector and in the USA. Both will recover eventually but which group would be primed for a trade if that is the route to go.
Thanking you in advance.
Rajiv
Read Answer Asked by Rajiv on May 01, 2020
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