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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: Interest rates are dropping but bond funds are getting clobbered - they normally would go up - is there fear that huge numbers of companies are going bankrupt such that bonds will not be repaid? It doesn't seem to matter whether short term or long term bonds - they are going down. XBB down 3%, ZAG down 3%, ZCS down 4% today so far. This seems crazy. Is this a buy opportunity for corporate bond funds or is the great depression about to happen and everything should be sold into cash?
Read Answer Asked by David on March 13, 2020
Q: A few times I've seen replies to member questions about oil companies and their debt to cash flow metric (OXY and OVV ring a bell, and 5X and 3X respectively ring a bell too, if I remember correctly). Are you calculating this? I don't see it in security details in 5i or my broker's site (or on other finance sites). Is it a question of having to read the balance sheet and cash flow statement, and if so what are you comparing? "Total Debt" (rather than "Total Liabilities") to "Total Cash from Operations" for the year ? For OXY the data I get presented (source is Morningstar via online broker) are Cash from/Used by Operating Activities + Cash from/Used by Investing Activities + Cash from/Used by Financing Activities = Increase/Decrease in Cash, however, I'm guessing you just use the first number, which for 2019 is 7.3 billion (so 38.6 debt / 7.3 total cash from operations = 5X)...is that correct? or do you get the ratio from somewhere else? Thanks
Read Answer Asked on March 13, 2020
Q: In view of the severity of the selloff, would you accelerate buying stocks in this market or spread the over 6 months or more ?

Any indication what the new multiple looks like for the US and CDA markets vs foward earnings. I suppose it s anyone's guess but I thouht you might have interesting comments. Thank you!
Read Answer Asked by Pierre on March 13, 2020
Q: Hi, I am surprised bond index funds have not performed great at this time either? Which ones are doing well? Today is another bad day...investors brought to their knees..I personally have several lessons learned..One of them being never feel shy to take profits off the table due to tax consequences. .The second one being, the day you feel like selling your bond fund in order to purchase more equities ( while assuming that this would be for the short term)..is the day you should be selling more equities.. cheers,

Shyam
Read Answer Asked by Shyam on March 13, 2020
Q: Hi, if we are in a lower for longer or forever energy pricing environment what might be the impact on the above companies? Also, do you think their dividends could conceivably be in jeopardy? Thanks.
Read Answer Asked by Gary on March 13, 2020
Q: Hi 5i team,
My question is regarding index ETFs for NASDAQ. Would you endorse HXQ for TFSA? Somehow, the daily chart of HXQ does not follow closely QQQ.
For RRSP, which one will you prefer? And how about for Non registered?
Thanks.
Read Answer Asked by Willie on March 13, 2020
Q: If you were holding a Real Return Bond here, would you convert to a regular Bond fund? Or are bonds also not safe in the current environment? They also have been negative in the last week which is puzzling. This is for a company pension so my options are limited to funds - or daily interest savings.
Read Answer Asked by Kel on March 13, 2020
Q: Hi folks,looking longer term, Whitecap resources wcp/t had fairly decent Q results with Paying down $100M in debt,lowered payout ratio to 72,and there has been lots of recent insider buying at higher levels. Stock currently crushed to 1.30sh level....aside from problems/negativity of world/wti oil....does Whitecap not seem like a reasonable buy here??? thanks as always, jb
Read Answer Asked by John on March 13, 2020
Q: I'm holding the following since I thought they would be considered safe stocks, however they are going down with all the rest.

1) I made the big mistake that gold miners would actually do well in the current situation, however I know see my mistake that I should have purchased gold directly. Would you, given the situation today, sell the miners and buy gold directly - what has the past crises shown about gold versus gold miners?
2) Do you think the utilities above will stabalize near current levels, or do you see that there will be a reset in all P/E and P/C levels down to lower levels?
Read Answer Asked by Kel on March 13, 2020
Q: With all the issues going on when is it time to start investing and what stocks to look at?
Read Answer Asked by Mark on March 13, 2020
Q: Hello,

I am wondering what your thoughts are on the eventual recovery? We won’t know 100% until the virus plays out further but best guess, what do you think a recovery will look like?

My thoughts are that once the virus is under control we may see a quick turnaround in the equities market due to the economies ramping back up, but I am concerned that if this virus continues to provide more questions then answers we may be stuck in a longer downturn.

Keeping the recovery in mind, what are your thoughts on picking away at a Russell 2000 position over the next few weeks/months and what effect will a rising loonie (if Russia and SA work through this spat) have on the dollar hedging. Is it best to buy the Canadian version or the US version with this drop in the loonie and hopefully the eventual recovery in it.

TIA
Read Answer Asked by Gerald on March 13, 2020
Q: I have both CLF and ZAG in my bond portfolio. CLF continues to go up as interest rates come down. ZAG was doing the same until the last two days. Do you think the drop in ZAG is due to the industrial bond component and business credit risk? If there is fear that businesses will default on their bonds, it might be appropriate to take profits in this fund.
Read Answer Asked by Ken on March 13, 2020
Q: I know you are not a fan of Baytex. I hold it and Vermillion. Can I get your thoughts on their ability to survive this onslaught? I realize you have no way to know where oil prices will land and for how long they will stay depressed, but can BTE and VET take concrete measures to ensure they survive ?
Read Answer Asked by Randy on March 13, 2020
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