Investment Q&A

Q: As a retiree who wants a diversified portfolio and also someone who spends a couple of months a year in the US, I certainly see the value in having say 25-30% of my holdings in US stocks. When the Loonie moves up and down this gives me some peace of mind because my US investments aren’t affected and I can relax and enjoy my time down there. My question relates to the Portfolio Analytics recommendation that I also hold 30% of my holdings outside of Canada/US. Sure, it provides more diversification, but I don’t see nearly as strong a case as for holding 30% in US. My instincts tell me to hold about 60% Canadian, 30% US and 10% Rest of World. Your answer may simply be that diversification is a “personal choice”, but I’m hoping you can go a bit deeper and explain how your holdings should relate to where you spend your money. For example, what if I spent a few months per year in Mexico, Asia or Europe, instead of the US? Thanks for the great service!
Alan

Q: I used to think of bonds and stocks as generally moving in opposite directions so that bonds could be a safety factor in my account for when stocks go down. Stocks used to go down for economic reasons and then bonds would go up since the central bank would reduce interest rates to try to stimulate the economy. This worked marvelously for me in 2008-9. However, it is far more common now for them both to move in the same direction since stocks are dependent these days more on lower interest rates than economic news so they go up when there is a hint of interest rates going down and so do bonds as they always did. In reverse, when interest rates even hint of going up, stocks decline and so do bonds. Good economic news means the stock market is likely to decline since interest rates might go up. It seems that the market believes that it cannot survive any interest rate increases. So what do you suggest these days to balance against this unified stock and bond reaction?

Q: I have a lump sum from a sale of an investment property. I struggle with the decision whether to invest the money now given the long bull market that we've had and the increase in trade tensions and the political landscape. I know returns rely on time in the market as opposed to timing the market, but its hard to justify psychologically. What would you advise to do with a large lump sum? Do you see areas that are undervalued? Is there better relative value in Canada or the U.S. or abroad?

Thank you,
Jason

Q: A comment on your recent blog...You say the TSX is up 14% year to date and yes, we should be happy with that. But a little context here; for those of us who are in for the long term, that is following a dismal quarter. If we go back to the end of September, the 9 month return is an anemic 1.95%.

Q: I have a non-registered US dollar account with a discount (bank) brokerage. I wish to transfer some of the cash in the account to Canadian dollars. What is the most cost-effective route to achieve this. Thank you in advance

Q: Considering only the dividends and disregarding the other differences, what is more likely, that a strong covered call etf such as ZWH would stop paying a dividend, or that an annuity purchased from a major bank would stop making payments? Or are both extremely unlikely events regardless of the economic scenario?

Q: Do you have any guidelines for individual stock weightings based on market cap using less than 1 billion for small cap, 1 to 10 as mid cap and greater than 10 billion as large cap? Would the weightings apply to both the initial purpose and current market value?

Q: Please clarify which kinds of securities should be held in non-registered accounts vs RRIFs and TFSAs. I have held yield-assets in our RRIFs and capital assets in our TFSAs and personal accounts, preferring to pay capital gains taxes on appreciation in personal accounts than paying full rates on capital appreciation upon withdrawals from RRIFs. What is your advice and are there exceptions?

Q: Hello Peter,

Always get notification of Toronto Money Shows. Have you ever thought of coming out West? Maybe SK or Alberta? Thanks,

Wes

Q: Philip asked about a site for historical p/e for companies. Morningstar is great, go to the site search a company and under the valuation category it has 10 year data on p/e, p/b, p/s, PEG, etc

Q: how do exchange traded bonds work? do they pay interest semi annually? do they have a maturity date? do they have a credit rating? do you like the ag growth issue or the Cargojet issue? thanks for your input Richard

Q: I have often thought it would be useful to look at charts showing how the PE ratio (and other financial ratios, for that matter) of a company has changed over a lengthy period of time, say 10 years or more. Could 5i provide such charts? Are they easily available anywhere else?

Q: Kenneth asked this morning about moving AQN from the U.S. side of his RIF account back to the Canadian side, at a 2% exchange rate. Is it correct that one must pay FX fees when moving a stock between sides? I had thought that this is another facet of Norbit's Gambit that would eliminate the fees.

Q: I own convertible debentures shares and many of them have been redeemed before their maturity date in the past few years . The most recent case is DII.DB.U which is being redeemed 5 months before maturity. Why do companies do this? Are they saving that much that is in their best interests not to pay the outstanding interest amount for the remainder of the period to maturity?

Q: I'd like to thank you for the Analytics walk through presentation yesterday and for answering my questions related thereto. I am in the process of downsizing from a house to a condo and have every intention of purchasing your portfolio management service as soon as my move is completed. Mike

Q: In your opinion how many years is short ,medium,long term for investment purposes?

Q: Stock Alerts....I would like your take on how to set Stock Alerts.
I have Income, Balanced and US Portfolios and I cast an eye on the stock prices generally on a daily basis, aka at the end of the day. But with this and that, and especially in the outdoor summer months, I thought it would be worthwhile, prudent to have stock alerts set to give me a heads up when a stock is hitting a new high or a 52 week one....and that's easy to do. But on the downside, what should I do to be aware if a stock is breaking down or taking a noise dive? Like what parameters or percentages or is there something else I should consider in setting downside Stock Alerts? ...........Tom

Q: HI 5i team, recently you mentioned couple companies with a growth rate of 50%. Do you mean revenue or earning or some measure ? Will you please list top 20 Canadian companies with such growth prospect. Thanks.

Q: Hi 5i team, if I remember right you do caution small investor like us buy and sell in the first hour of each trading day. Is there any reason behind this practice ?

Q: Like other members I am searching around for a good watchlist system. I have looked at TMX money but am somewhat confused about their platform. I can't see if there are any fees associated with their service. How do they make their money? I have not registered with them yet.

Thank you,

Paul