Q: Hi Peter,
Where would you prioritize (weight too) these companies in terms of your portfolio holdings in the financial sector? Do the banks and Insurance companies provide better growth within the TFSA? Or for that matter, do they deserve to be in a TFSA portfolio?
If so, between the two which is the preferred one?
Regards
Rajiv
Where would you prioritize (weight too) these companies in terms of your portfolio holdings in the financial sector? Do the banks and Insurance companies provide better growth within the TFSA? Or for that matter, do they deserve to be in a TFSA portfolio?
If so, between the two which is the preferred one?
Regards
Rajiv
5i Research Answer:
We would side with the larger GSY. This is not its first crisis or market correction. That being said, both PRL and GSY are small companies and very volatile. They are cheap, certainly, but can still decline. But certainly they 'should' have much better long term growth prospects than the mega cap banks and insurance companies. Leverage to deals and acquisitions is of course much higher. Valuations are lower, allowing for more 'bounce' potential in good times. But while financials, we would consider them quite different overall. Conservative investors should stick with the larger companies within the sector.