Since we started our independent research company noisy . 2012, we’ve answered more than 41,000 investment questions for clients. By using this database, recommendations our individual investor focus supplies a good head’s on what’s concerning investors nowadays. The trends inside our questions will most likely lead trends within the markets. At any rate, almost always there is some questions that keep appearing over and over, based on market events. Understanding that, listed here are five investment questions which have appear regularly recently.
- If Clinton wins, what’s going to happen to my biotech stocks?
This question for you personally is extremely popular, and possesses sparked massive fear with biotech investors, specially when only one recent Tweet from Hillary caused vast amounts of dollars of lost value in healthcare stocks when she continued the attack of high drug prices. We are less worried about that specific. Every election, healthcare turns into a hot issue. It’s obviously the red hot issue with voters, and fat-cat drug information mill an easy target for politicians. Health-care reform is difficult, though, and takes years. Lobbyists on the other hand are incredibly powerful. We’d not panic and then sell biotech stocks. They continue to be a practical sector for investors. They are volatile, always have been, always will likely be. They simply obtain a tiny bit more wild than normal in a election period. There’s still money to produce on good healthcare stocks, such as Gilead (GILD on NASDAQ) having a net cash position and trading at nine times’ earnings.
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2. So what can I actually do with my Valeant shares?
This might be No. 1 on our question list recently. Recently we had Valeant within our Model Portfolio, and did mainly because out of this. We have nervous though on its large debt level, which worry remains today. With VRX, though, now there is much more to bother with. Undisclosed SEC investigations increase the risk for company look bad, personal attacks round the company with the aforementioned Hillary Clinton, large write-downs, short sellers’ attacks and delays in regulatory filings have added around crush the stock recently. Oh, and there’s still the $31 billion indebted. How to proceed? We’d wait that certain out. You will find cheaper stocks within the sector, ones paying nice dividends and having no debt. Why place yourself through all this stress owning VRX?
3. If Trump becomes president, what can i do?
This real question is getting lots of traction with this particular clientele. This week’s primaries will simply for everyone in order to increase investor anxiety. It absolutely was interesting also now that absolutely clear on the key Make an online search trends recently was ‘how am i going to proceed to Canada?’ as Us citizens fret with what might happen. The issue with Trump is uncertainty. You never know what he might say, or do, or whom he might offend. For markets, among the worst things in uncertainty, and Trump as President would keep investors guessing, likely every single day. Since the market includes a excellent approach to discounting politics ahead of time, generally it’s wiser to disregard most politics when investing, this election will probably change that. We have no idea how markets might respond to a President Trump. But it is unlikely to become giant rally: We would keep some money or gold available, just in case.
4. Can you really recommend a multi-bagger?
A large amount of our customers want strategies for ‘multi-baggers’, or stocks which have the chance to rise two, three, four, five-fold or maybe more. Alas, we simply cannot predict these ahead of time. We could make suggestions, though, for example Knight Therapeutics (GUD on TSX), DHX Media (DHX.B on TSX), Sylogist (SYZ on TSX-V) or Prometic (PLI on TSX). But multi-baggers need time to perform, and several within our customers would like them fast. It really fails similar to this, though. What’s more, it’s easy to have to buy potential multi-baggers once they have already risen 100%, or even more. It’s, usually, the very best companies today are the most useful companies for future years too, only they become larger.
5. The amount U.S. exposure must i have?
This question was big last year, and stays popular in 2016. It should be an individual decision for investors, however, you could find plenty of high-quality investment opportunities south in the border. Additionally, although the Canadian dollar has staged a little recovery, economic and interest rate trends still favour the U.S. dollar. Generally, most investors would locate a 20% to 30% US position might be about ideal for today’s economic climes.
One thing we’ve learned from our question and answer services are that, even while we’ve grown, the quantity of questions we’ve hasn’t grown linnearly. Most investors, we’ve discovered, want to be concerned about all the same things. For contrarians, this might create some interesting opportunities. If most people are concerned about a regular, then automatically that stock might be inexpensive, as nobody really expects everything from it. Sometimes, then, you may want to consider taking a worry, turning it around and that makes it a profitable trade.
Financial Post
Peter Hodson, CFA, is CEO of 5i Research Inc., an unbiased research network providing conflict-free advice to individual investors (http://www.5iresearch.ca).
