Market Commentary — Page 493

Market Commentary

COMMENT

He's focused on the recovery stocks as vaccines pick up and the economy recovers. The stock market looks forward, so he wants companies that will do well when vaccines roll out globally next year. Those companies may not be the same ones which led the market after the March 2020 bottom. In recent years, being a passive investor in ETFs or index funds worked, but not now. Namely, tech stocks now occupy 25% of the S&P while other stocks have lagged, but it's starting to change. Now, the cyclicals and interest-rate sensitive stocks will improve, and will really benefit the TSX. He expects the Dow to outpace the S&P and Nasdaq in 2021 as things normalize.

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COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. - The recommendation in terms of holding cash is to have enough to sleep at night. The markets have a lot of different forces affecting it, like a Biden victory, vaccines, good earnings, and low interest rates. Some sectors look to be in a bubble, like electric vehicles. 5i is generally not worried about a giant correction. Unlock Premium - Try 5i Free

COMMENT

Good time to buy in to real estate? Yes, it's one of the most compelling choices today. Combination of low interest rates, low inflation, low growth, and growing demand for tax-efficient income. In 2020, a number of distributions have been reduced, while many in the real estate sector have increased theirs. But you have to be selective.

COMMENT

Cloud over office and retail REITs? Retail was struggling before Covid, and the pandemic just accelerated that. Especially those who didn't have a superior e-commerce presence. Going into the holiday season, lockdowns will be challenging on the bricks and mortar retail locations. Vaccine is a light at the end of the tunnel, but she's still really cautious on retail. Structural challenges remain with over supply. There will continue to be a need for some office space, but flexibility is needed, and how does that translate into office requirements? Next two years will be net negative returns.

COMMENT

Best idea for REIT investing right now? An ETF like XRE combines the good, the bad, and the ugly with different sectors and growth profiles. Look for companies that generate strong, recurring cashflow and grow distributions. Industrials have significant tailwinds for the next few years. Also apartments, which are trading at a discount to NAV, as people still need somewhere to live.

COMMENT

Any chance of office space being converted to condos? Potential, but it's significantly expensive to do this. First would be hotels. There has to be a clear conviction of future rent growth to take on that risk and invest that capital. Demand for office space will continue to be net negative over the near term.

COMMENT

Why don't you invest in energy stocks? He likes companies that have pricing power and aren't beholden to the costs of input. He has no idea whether oil or gold will go up and how to trade that. Not interested in the boom/bust of commodity names.

COMMENT

Hard to find great companies at low prices these days? Have to put it into context. Bond yields going lower, interest rates low. Bonds are even more expensive, and cash is earning nothing. The best businesses in the world should trade at high valuations. You're paying up for strong cash flows and stability. If they continue to compound capital, you should do very well with less stress. He and his clients want to sleep at night.

COMMENT

Are the tech giants core positions for you? Absolutely. Happy to continue to own the Apples and Microsofts. Though they've pulled back, it's healthy to have this broadening out of the rally. Highest returns and biggest profit growth lie in the FANGs.

COMMENT

A good time to buy REITs? It's all about interest rates and Covid. Light at end of tunnel, so there's been a rebound. His favourite is CAR. Stay with companies that have tailwinds, such as apartments, American Tower, and data centres like Equinix. Stay away from offices and malls.

COMMENT

Canadian banks. Tough year for the banks. Q4 will be released in a few weeks, and you never know what you're going to get. Brighter days are ahead, and the market's already figured that out. BMO is not his favourite. Prefers National, TD, Royal. You'll do fine with the Canadian banks. Some concerns around fintech. Low interest rates will be a problem, but offset by recovering economy. Good time to add for dividend seekers.

COMMENT

Tax-loss selling. He's wishy-washy on this. Look at what you own and ask why it's down. Did I overpay, or is it a bad investment? If you shouldn't have bought it, or if the fundamentals are deteriorating, get rid of it. Don't make a decision based on taxes. If it's gone up, just trim.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Canadian cash levels are at a record currently which may be a reason for the market rally. Many did not see a drop in income despite reducing expenses. This gives a good potential support for the market in the short term. Unlock Premium - Try 5i Free

COMMENT

What's the hottest trend in tech right now? Even while this rotation is going on into cyclicals, value, and industrials, seems to be quite a bit of enthusiasm for memory, smart mobility, and automative chips. Micron, for example, is the poster child, up 20%.

COMMENT

Is there a move from the high flyers into value? Absolutely. It's not as though people are cashing out. They're just taking profits from tech and putting them into those cyclical names.

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We paraphrase the experts by hand, we watch the shows and write down what we understood from the experts’ comments. We are human and can make mistakes, help us fix any errors. If you see something that you know is not right or if there is a problem with the site, feel free to email us at : [email protected].

A Comment -- General Comments From an Expert (A Commentary)

A Comment -- General Comments From an Expert(A Commentary)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. (A Commentary)

Good time to buy in to real estate?(A Commentary)

Cloud over office and retail REITs?(A Commentary)

Best idea for REIT investing right now?(A Commentary)

Any chance of office space being converted to condos?(A Commentary)

Why don't you invest in energy stocks?(A Commentary)

Hard to find great companies at low prices these days?(A Commentary)

Are the tech giants core positions for you?(A Commentary)

A good time to buy REITs?(A Commentary)

Canadian banks.(A Commentary)

Tax-loss selling.(A Commentary)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. (A Commentary)

What's the hottest trend in tech right now?(A Commentary)

Is there a move from the high flyers into value?(A Commentary)

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