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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 Peter & Team,

As per Bob Dylan... "The times they are a changin"

I have some new money to deploy and I am a little confused right now regarding where I should put it and how much cash I should leave out!

With what's going on in China, supply chain issues combined with pent up demand and lots of cash on hand, increasing energy costs, and the shortage of labor, I think everyone can agree we are about to/are in and inflationary period which could last for a few years.

I don't think it's a bad thing. And I don't think the markets are going to be (long term) adversely effected. But I do think there are companies/sectors which will do better than others in an inflationary environment. As an example... financials should do well. Inevitable rate hikes plus their ability to pass along added costs to the customer makes sense for them to be able to continue generating good cash flow.

My questions
1. We have all done very well in tech thanks to your guidance. How do you see this sector performing over the coming 1 - 3 years? It would be a shame for the 5i family to see all the capital gains we've recently enjoyed be depleted.
2. Which sectors and specifically which companies do you think will do well in this environment moving forward?
3. With respect to the 5i portfolios which many of us follow closely, what plans/changes are you considering keeping in mind the increasing cost-of-business landscape?

Thanks for all you do.

gm
Read Answer Asked by Gord on October 20, 2021
Q: For my kids RESP's I buy low cost TD index funds "e-series" to keep things simple. However I notice they added a disclaimer which didn't used to be there when buying this last time, it says "A short-term trading fee of up to 2%, payable to the fund, may apply to all units of TD Mutual Funds (except money market funds". What does this mean? Short term makes it sound like I get the money back? But if not, f they are adding 2% to the purchase of low cost index funds, those are no longer low cost. Thoughts?
Read Answer Asked by Adam on October 20, 2021
Q: Hello Folks:
Currently we hold energy sector stocks:
PXT, WCP, ARX, SES, CVX.
All these are having a good run except ARX.
Would you advise trading ARX for another energy stock such as TOU etc. Do you think I should hang on to ARX or make a trade for something else?
Thanks again for everything
brian
Read Answer Asked by Brian on October 20, 2021
Q: Hi Peter and Team, I am hoping you or perhaps other members can help me here.
I have a rather large pension entitlement which, upon my recent retirement, I can move to a LIRA. While attempting to open a LIRA account with Qtrade, I was told that its LIRA accounts are available only in Cdn dollar - but no USD - this despite the fact that its RRSP accounts are available in combined CAD and USD and despite the fact that a LIRA, as you know, is simply an RRSP with an overlay of pension-law restrictions which 'lock in' the funds. The Qtrade rep had no explanation for this, except "maybe it's a regulatory issue or CRA needs to approve". That makes no sense to me.
My concern is that a CAD-only account will either limit me to Canadian investments or I will constantly be paying currency conversion fees to Qtrade every time I want to buy or sell USD securities or receive USD dividends.
As best I recall, most brokers moved to providing combined CAD-USD accounts over a decade ago. Am I missing something that might be preventing Qtrade from providing the service I need or is it just a decade behind its competitors?
Thank you!
Read Answer Asked by James on October 20, 2021
Q: Hi 5i,
So grateful for your very quick and frank intervention in response to my request for counselling this morning as I grappled with the irrational urge to sell ATZ 'because it is up'. I've printed your answer and it's pinned to my wall for reference when that urge strikes again regarding another name sometime in the future, as it inevitably will.
And with regard to finding another name where that urge might arise, can you identify 2 or 3 (regardless of sector) that check some or all of the boxes you highlighted with ATZ - strong momentum in sales and earnings (not just sales, I notice), broker upgrades, positive surprises on earnings estimates, US growth (nice but not essential for me) online sales, rising market cap and near immunity to the pandemic? I realize there may be very few, if any, that meet all those criteria, but do you see any that come close?
Thanks and thanks again.
Peter
Read Answer Asked by Peter on October 20, 2021
Q: I was surprised by your response to Chris' question of Oct. 19. He asked you to rate 5 renewable energy stocks from least to highest risk and AQN was deemed most at risk.
(Your assessment from least to most at risk: NPI, BEPC, CPX, RNW, and AQN.) What is the source of the risk to AQN...and how likely do you believe this risk is likely to occur? Thank you.

Read Answer Asked by Maureen on October 20, 2021
Q: The yield on CDZ is 3.0%, if I buy equal amounts of the top ten stocks, the average yield is 5.48%. What accounts for the 1.48% difference in yield and is the risk proportionally higher buying the individual stocks than buying the EFT
Read Answer Asked by Ron on October 20, 2021
Q: Now that D2L has come out with a price range for their IPO do you have any comments/further thoughts? Do you have any personal insight into management/the founder(s)?

Thanks,
Read Answer Asked by Stephen R. on October 19, 2021
Q: what do you think about this IPO your unbias opinion always appreciated?
Read Answer Asked by OSCAR on October 19, 2021
Q: Hi,

I recall conversations years ago where people were commenting that the market is expensive, but the quick rebuttal was always-were else are you going to put your money.

In your opinion, is there an interest rate level where institutions start to move out of equities and back into fixed income. Additionally, is there a 2-10 or 5-30 year spread level that would signal any potential issues for the equity market?

thanks as always for your valuable insight.
Read Answer Asked by Brad on October 19, 2021
Q: I have the time and interest to invest in individual stocks and have benefited greatly from your advice, My 28 year old son is looking to me for investment advice and I was hoping that you could help me. He is young with a long investment horizon so he is not interested in any bond or fixed income components and is comfortable with a portfolio holding a diversified mix of 100% stocks in various geographies. He wants to control his own portfolio but does not have the time to research and stay on top of individual stocks and is leaning towards an ETF portfolio. I am not well versed in this area and was hoping you could provide some guidance.

He is looking at XEQT and VEQT as possible one stop solutions. There are some minor differences between the two, but overall they appear very similar. XEQT has a MER of 0.2% and VEQT has a MER of 0.25%, VEQT holds more stocks than XEQT and XEQT is weighted a bit more towards US stocks and a bit less towards CAD stocks compared to VEQT. Would you recommend one over the other, or hold both?

Instead of buying one of these he is also considering holding a two (or more) ETF portfolio using VCN and XAW ETFs. VCN tracks the Canadian market, XAW tracks the global market excluding Canada. A portfolio of 25% VCN and 75% XAW would replicate XEQT/VEQT very closely, but would have a weighted average MER of about .18%. The trade off is that this one would need to be rebalanced, whereas with XEQT/VEQT all rebalancing is done automatically. Would a 25%VCN/75% XAW be preferable to XEQT/VEQT?

If it was you at 28, would you do either of the above or would you prefer a portfolio of other ETFs and if so, what would those be?

Many thanks

Scott
Read Answer Asked by Scott on October 19, 2021
Q: Hello Peter,
With recent announcements of US companies launching Bitcoin ETFs, there is a concern that Canadian Companies may experience outflows. If so, i would think if one was invested in a bitcoin eft such as the one from purpose or evolve, the stock price (representing etf of bitcoin) would still go up if bitcoin went up? Hence, i don't see concern from putting monies in the canadian ETFs. Any comments please? Also, what is your opinion on whether the etfs are hedged? Does it mean the hedging works both ways whether the canadian dollar goes up or down? I was expecting Nuvei to do much better after the US listing but the stock has not moved. Are you still comfortable with new monies in Nuvei? Lastly, i was thinking of increasing my position to 3 percent for ATS automation. From your responses, you seem to like the stock. Thanks very much.
Read Answer Asked by umedali on October 19, 2021
Q: Hi
I am reviewing my portfolio trying to decide i i should sell some of my stocks

WEE , TVK and SXP have been very profitable , do you suggest holding these stocks for the long term, a partial sell off , or to sell off the full position at this time .
I have lost money on ETI, LEAF, and GSQ do you suggest holding for the long term or selling off at this time

Thank you
Howard
Read Answer Asked by Howard on October 19, 2021
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