Investment Q&A

Q: What is “Cash Value in Life Insurance”. I heard there is Tax Benefits. Is there a video or book. Do you know how it works is there benefit for retirement.

Thanks for the great advice

Q: I adhere to a portfolio construction strategy where 5% is a full position but I allow for a "rock star" stock like a SHOP, NVDA or GOOG, to go to 7% at which time I will trim a point or two.

When you suggest a small-cap stock, you often warn against buying too big a position initially, given the inherent instability and risk of a smaller company. My question is, at what point do you "loosen the reins" and allow that stock to assume a full position and when do you allow it to go to (in my case, for example) rock start status? I'm thinking of companies like ATZ and HPS.A. Is it based on capitalization, number of business cycles management has gone through, profitability ratios or is it as much art as science?

Appreciate your insight.

Paul F.

Q: I think there are more questions recently on small cap stocks. I also note that in your answers on small mining stocks, aka penny miners, you display solid knowledge. Any thoughts on adding a separate service for junior mining and small caps? This area has given me significant gains over the past year, and I am constantly looking for knowledgeable commentary to assist in spotting opportunities. Maybe if other members vote this up it will give you an indication of interest?

Q: I would like to add to the recent accolades for you Peter, and your co-workers. I pretty much joined right at the start of 5i. During the succeeding years I gained immeasurable knowledge from 5i and the members, either through staff, questions asked, or general comments.
The only negative in all these years is when I asked a question about Crescent Point Energy and another member retorted the next day how I could even consider investing in oil and gas. See below for how that turned out.
Even after donating large amounts of stocks to charitable causes I recently went over the seven figures in my trading accounts.
I/we can't thank you enough.
Gordo

Q: Dear Team:

Nice articles in your 5 From 5i. Thanks.

This question is based on one of the articles about Retirement portfolio. By Christine Benz.

She talks about 8 (EIGHT!!) years worth of funds invested in BONDS in Bucket #2 for withdrawals! The example in this case study is 80000 per year minus the person's Social Security income. (US based of course.)

Question: Is this allocation to Bonds excessive or reasonable, especially in the coming years of inflation (rate increase) or worse Stagflation(rate decrease/probable/possible?)

I know every person's situation is different. But in terms of principles of asset allocation for a pre-retiree/retiree in Canada, is this a reasonable template?

Q: I am looking to simply my portfolio by transitioning part of my portfolio to broad market etf.

I have a few concerns with the often mentioned Xeqt and veqt.

With Canadian assets around 25% of holdings, is the Canadian market over represented?

Secondly, if I were to split my ETF holdings between a VEQT (or Xeqt) and a second, growthier ETF, which ETF would you recommend for some added torque?
Would the default choice be a QQQ. I ask because I am worried about the long term prospects for SAAS.

Your advice please.
Thank you

Q: What, if any, are the risks in having a large percentage of one’s wealth (say, 50 to 60 percent) held by a single mainstream broker and invested in a suite of ETFs from a single major ETF company. For example, holding VUN, VAB, VBAL, VEQT, VEE, and other well funded Vanguard ETFs across several accounts, all at RBC-DI?
My apologies if you’ve answered a similar question. Couldn’t find answer.

Q: Everyone, message from Joel on April 20, “ Q: First, want to thank you for the service provided over the years. I recently reached a financial milestone (another 0 at the end of the net worth statement at age 33) and 5i played a massive part. Biggest elements were the great stock picks (obviously) which allowed me to outperform the market quite a bit, as well as the reassurance to stay long when the market has a fit.”
I started investing on my own with great assistance from 5i and over the last 15 years my returns are more than twice the market. This is due to the financial help and confidence from 5I. Many thanks to all the staff at 5i. Clayton

Q: What is involved with your appearances on BNN? What preparation do you do? Are they paid appearances? Do they limit the size of your entourage? Are you wearing makeup? What do you do during commercial breaks? Do they feed guests and if yes how is the food? Just curious to hear what we don't see on TV. Thanks!

Q: May I have your comparative analysis of risk/benefit of having your assets in a bank, caisse populaire (Québec) vs fintech (like Wealthsimple)? A friend in corporate legal domain was suspicious of the soundness of fintech vs banks in Canada. She was refering to the 2008 financial crisis and implied that fintechs would be a liability for investors. What do you think?

Thank you as always to Peter and the great team for expertise that goes well beyond stock analysis.

Q: Long term owner of WSP, with a full position. Started buying WSP in 2014 @ $37. Long term believer that WSP will rebound from it's current price of around $220 and resume it's "up and to the right" trajectory.

Going to trim some (again) from my Cash account for a capital gain. At the same time, I plan to buy some in my TFSA. My understanding is there are no CRA issues with this plan, as it is a capital gain and NOT a capital loss situation.

Please confirm....thanks....Steve

Q: What are you thoughts on the direction of the economies in Canada and the U.S.,inflation or recession?
What sectors would do well for each scenario/

Q: The market is proving pretty resilient given the turmoil around the Iran war and the global impact to Oil markets and economies.

However, there are several additional underlying challenges already being experienced in the markets, like Govt Debt, fear of Inflation and increasing Interest Rates, bad credit, and so on…

I know this is a difficult question, but given the global disruption of the Iran War plus the current market concerns, do you feel that the recent minor pullback in the markets could soon expand into a correction of 10 to 20%??

The market seems to be on a knife’s edge right now and depending on the days headlines could change very quickly.

Thanks
Tim

Q: Hello- following up on Raymond’s stock-lending question answered April 6 - so.. to reiterate, 5i’s perspective of risk(s) of stock lending are:
1)no voting rights and
2)loss of CIPF protection for the stock(s) lent out.

Anything else? (Liquidity risk?, unintended consequences?)

Thx.

Q: Can I get your thoughts on WealthSimple's Direct Indexing Product? Do you think larger brokers like TD Direct might offer it?

Q: Last week I was talking to my 80-something neighbour “Jim” (Canadian resident) who recently returned home from his (owned) condo in Arizona.

Over tea this morning Jim’s spouse Susan broadly shared with us her concern of how messy and drawn-out it might be for her personally to dispose of the U.S. property in the event Jim dies before her. Their adult kids want nothing to do with the condo, don’t want to travel to the U.S., and wonder why their parents continue to own instead of lease.

Jim handles the finances and is a strong and silent type. He jokes with me he is immortal because he has no concrete plans of dying. (wtf?..). In his mind, Susan is concerned over nothing because his will transfers everything to her upon his death. Jim changes the subject when Susan asks about the future of the condo. She doesn’t want the stress of settling the disposition in his absence.

Questions:
In your experience,
1)how common is this situation?
2)is there anything Jim (and people in his situation) commonly overlook in this simple plan?

Q: RE: TD Direct Investing - Stock Lending Program

This idea is new to me, and I’m interested in better understanding the concept.

According to the website, the benefit of participating is the interest the person lending their stock receives, which is split 50/50 with TD. There is no indication of what percentage interest you’ll receive. While I understand interest would fluctuate, without a range, it’s hard to determine the actual benefit or whether participation is worthwhile.

For an individual investor.
1) What are the major pros and cons of participating in a program like this?
2) Are there big differences if using a tax-deferred account vs a taxable account?

Q: There was a banner on BNN this morning that said our trade deficit widened due to an increase in imports of gold. Who is buying that much physical gold and why is it coming from foreign sources? This seems curious to me. Thanks. Ian

Q: Retired, dividend-income investor. I've been pondering this question for months.

I run a concentrated portfolio, normally holding approximately 10 ETFs and 10-12 stocks.....plus fixed income. Over the years with 5iR, I have tried to follow your rough guidelines...as follows:

1. Target < 15% Covered Call ETFs => I'm just over 15%....ok as is.
2. Target < 15% per Fund company => I'm just over 16% with BMO ETFs (ZLB, ZUT, ZRE, ZWC), 15% with iShares (CDZ, XIT, XST), and < 5% with other funds (NNRG, HHL, HMAX, etc.).

If the target % is based on my entire portfolio, I am ok. However, if it is based on "equity-only", my #'s jump to 22%, 17% and 8% respectively.

Q#1 = please clarify Equity only vs entire portfolio. How much leeway is there if it is only on Equities?

3. CIPF insurance target < $1mm per account (TFSA/Cash total versus RRSP/RRIF total), allowing for the 50-50 spousal split on joint accounts. I'm ok currently, but starting to crowd the limit on one of these.

4. Then we throw in some of the recent questions about a very simplified portfolio based on only a handful of ETFs, so you would obviously be over the limits above.

Q#2 = how do we meet all of these potentially opposing targets?

Thanks....Steve

Q: Hi,
I think Turkey is one of the global leader in drone manufacturing, and was said ‘politically neutral’. Too tough of a question maybe, but where does it stand in the Iran war? How does its production compare to US, China, and even Ukraine?

You mentioned KTOS, AVAV, ONDS. Is US self-sufficient forever ?
Thanks,