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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: Please respond as you see fit, private if you deem appropriate.

Although no one can guarantee the future, having a forward vision at least gives some perspective and/or at least an opinion/position to work from. With fixed income rates low and now rising, issues surrounding the potential risks to so called bond proxies, what is an educated guess as to their potential downside risks? Basically, using your expertise, how much might a maximum correction possibly look like? I prefer to hear what I need to know but understand the comments of certain people can create fear /panic for others!

What would you consider the new "Norm" for interest rates both short and long term? Some suggest a period comparable to the 1950s and early 60s where rate structures were low? That said, will savers continue to be subjected to economic repression? Predictions of the short end moving as high as 3% and if so, would say 4% (or higher) constitute a reasonable spread for the 10 year? I often hear analysts use the 10 year rate to model values?

Would real return bonds be a good anti inflationary component since there is also talk of inflation actually picking up more than expected? Is not the yield over inflation fixed and should inflation pick up might a spread with the market occur? Assuming a fixed/ equity portfolio of 35/65 %, what % of the fixed income portion could be considered a ballpark number representing a full weight for real return bonds ?

Rising rates are often the sign of an improving economy and somewhat of a counter weight to offset yield shifts. Some may say my questions want it both ways. My primary concern, years of engineered responses now showing their Achilles' heel and a period of "detox" ahead of us to correct them?

My approach, at least understand all the risks and the options to build a portfolio that matches the conclusions and risks you are comfortable with. There are a few guest on BNN who are even cautioning about too much get rich thinking!

Given I raise multiple points, please feel free to respond with a few bottom line general comments if that is what deem appropriate.

FYI. I go on the site daily with a goal of reading every response. It provides a great base of information and knowledge in a very timely fashion. Keep up the great work and thank you.

Mike
Read Answer Asked by Michael on February 01, 2018
Q: Timia Capital (v.TCA) has undergone a significant change in its business model since you last had a look, now focusing on financing SaaS-oriented IT companies rather than 'green' players. It's still very small but its new model seems to be working very well - even turning profitable during its latest quarter and now expanding partnerships.

Would appreciate your current thoughts on this new direction and its prospects.

Thank you.
Read Answer Asked by Richard on February 01, 2018
Q: I have owned shares in VSB for 16 months and as of today my unrealized loss is greater than what I have received in income. If interest rates continue to go up I would expect the unrealized loss to grow. On the other hand I remind myself that all bonds are supposed to mature at face value so in the long run I think I shouldn't really lose money.
Can you help me sort through these opposing thoughts? If I am really likely to end up losing money over a 5-10 year period with VSB I will just sell it and buy GIC's that I will hold to maturity.

Thanks
Read Answer Asked by Morgan on February 01, 2018
Q: Hi 5i:
I have too many finance stocks in my RIF account and would appreciate your advice on how to reduce. I want to maintain some US banking exposure, but otherwise I am open to your suggestions I have: RY; SLF; JPM; BAC; V. Thanks Roland
Read Answer Asked by Roland on January 31, 2018
Q: Hi 5I
In 2008 i held my portfolio all through financial crisis even though it was very unsettling.I feel i made a huge mistake by not raising cash! There where unbelievable bargains of the canadian banks as one example with huge dividends available.Fast forward,now 64 years of age i have raised cash because i feel that a similar opportunity may exist. Maybe not to the extent of 2008,but it is with the strategy of picking up blue chip companies with enhanced yields for my retirement.
I have kept some good paying dividend stocks,preferred shares,debentures.
I am willing at this time in my life to forego some capital gain,to hopefully attain higher yields.
I concede that this is timing the market,but it is a strategy that i feel will help me in retirement.
Your thoughts?
Read Answer Asked by Randy on January 31, 2018
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