Investment Q&A

Q: Been looking for a reliable accurate system/app or software to accurately calculate a portfolio rate of return - is there any options that you know of and could recommend??
THX
Ralph N.......

Q: Hi Peter,
I really enjoyed your appearance recently on BNN. I like the fact that you appear without notes, printouts, “model” prices or table-pounding buys, unlike some of the other guys.

I read your FP article on the weekend on asset and sector allocation. I agree 100% with getting the sector right - just look at commodities over the past many years. It is the larger asset allocation question (stocks vs. bonds) that puzzles me. For me, I am an equity guy and typically run 90-100% equities for better long run returns. Any remainder is cash looking for new opportunities.

I have never in my life bought a bond (or bond ETF), unless you count CSBs 40 years ago when they were at 12% plus; rates we will never see again in our lifetimes. I understand bonds for reducing volatility in your portfolio. Last fall showed the volatility of an all equity portfolio. Yet today, we are making a nice recovery. My question is if or how do bonds enhance your returns?

In Warren Buffett’s recent interview on CNBC, he said that given a choice of holding a 10 year government bond versus holding the S&P 500 for 10 years, he would buy the S&P in a second. He said the same thing for a 30 year comparison. I just can’t get comfortable with the idea of holding bonds to enhance your returns. If the primary advantage of bonds is to reduce the volatility of your portfolio, then I am fine without bonds.

Thanks again for your insight.
Dave

Q: Hello 5i,
It is now into March 2019. Will the new personal portfolio review option soon be available?
Thank you
Oh, will there be a "Women In Finance" lingerie issue of "Canadian Money Saver"?
Stanley

Q: How can I find the questions I have asked in the past together with the corresponding replies? Thanks

Q: Follow up to your reply from my last question. we will max out our TFSA as you suggest. In the past we used our RRSPs in to invest in our business, so we have zero RRSPs. would you suggest placing any in them? We will continue to have income from our business after "retirement age" we intend to live in and operate the business as long has health allows. My though was that RRSP will at to the income tax load when it becomes mandatory to start withdrawals.

Q: I notice that most stocks end the trading day with very large volume. Can you explain what is going on?

Q: SDX will be delisted from the Venture Exchange and remain on the AIM. When this sort of event occurs what happens to shareholders who want to stay invested? Is there typically a mechanism that transfers their holdings to the remaining exchange or do they have to sell on one exchange and buy on the other?

Q: A person diligently saves and invests, and is now in retirement. He has a diversified portfolio. He has maxed out TFSA contributions every year. He has a few hundred thousand in an RRSP, which holds good solid US dividend paying stocks. He also has a few hundred thousand in a non-registered account containing a diversified mix of good Canadian dividend paying stocks. He doesn't have a company pension. He does receive CPP and OAS.

He decides to open a RRIF account early (before age 71) and begin taking at least the minimum annual RRIF withdrawals. He wants to take the withdrawals as "in kind" transfers. (He may sell some stocks to raise the cash to pay the withholding tax, if necessary.) He doesn't need the withdrawal amounts as cash to live on so he wants to keep the withdrawal amounts invested in the stock market, hence the in-kind transfers.

The question is: what to do with the terrific US companies in the RRSP that will be converted to a RRIF, and will slowly need to be withdrawn? To transfer the US stocks in-kind to the non-registered account, means that the US dividend income will now be classified as ordinary income, which will be taxed at a higher rate, and there will be a US withholding tax of 15% on the US dividend income. Is one of the options to keep only low or no dividend paying growth stocks in the non-registered account?

It doesn’t seem to entirely make sense to sell the US stocks and start buying more Canadian stocks. If this were done, eventually the portfolio would become too concentrated in Canadian stocks.

What is the best and most tax efficient strategy for this senior?

Q: How is the best way to keep track of dividend increases and cuts. When owing quite a few stocks. Is there a site or way of receiving notifications?

Q: When it comes to how liquid a stock or ETF is on a daily basis, what would you suggest is the minimum amount trading you would like to see if you were to buy?. I have a couple of different accounts that I use different strategies and one of my thoughts is if you had a sizeable position in and etf or stock that trades under 10k or 100k a day would this not be of great risk if a person needed to get out of it in a timely fashion due to market conditions or personal need? Some examples of securities I am looking at or own are PBH, XTR, XTC, VFV. I am well diversified with my investments and typically look to buy and hold just wanting some input on this topic. Thanks keep up the great work

Q: In response to the question about GICs through TD Waterhouse. Under the research tab, click on GICs. That will bring up a list of those available. from TDW. You can't buy them online yourself though. There's a number you can call to order them.( The rates are not quite as good as those directly through the issuer.)

Q: Would you please further explain how advisors are incented to sell products (funds)?
On April or, 2017, in a reply to Bruce, you stated: "HWF is a new closed end fund, which did its IPO in October last year and the indicated yield is 5.1%. In our opinion, this fund was designed to sell, with high commissions to advisors." Generally, what kind of fees/commissions do advisors receive that many retail investors may not be aware of? And does this also apply to pushing/selling certain stocks, like new (share) issues?

Q: Regarding sector weightings, I have developed a portfolio strategy based on your income and balanced portfolios augmented by other holdings. I have based the overall sector weightings from your recommendations adjusted for my own preferences. It would actually be helpful if you published monthly your weightings (with the obvious warning that investors' preferences my differ). I began moving away from financials and into REITS and Utilities early this year because of my belief in rates are not going much higher. I see you have done this too and it is comforting to know you may have he same idea. We do not have to agree, I just need all the information available to make investment decisions.

Q: 1:03 PM 2/24/2019
I am increasingly concerned about the financial stability and credit quality of several of my investments.
Could you please provide the S&P or DBRS issuer rating or bond rating of : ENB, TRP, PKI, BCE, CSW.A, AW.UN, SIA.
This information is very difficult for me to find and is often quite dated. Could you suggest a source I could use.
Thank you........... Paul K

Q: Hello, I would like to know how you determine the valuation of a company. It seems every industry is assigned different pe ratios. How is that established? Once a company reaches a valuation does that mean it is time to sell?

Q: Should I buy a 2 year GIC at 2.8% or a bond fund say XBB.?
Can you also explain your reasoning.

Q: What are your asset allocation suggestions for the TSX industry sectors? Thank you

Q: Hi, I'm a dividend/ income investor new to 5i and have a question on portfolio allocation % with regards to geographical location. ie - I have ETF's ZWA (USA) at 8.6% and ZWE (Europe) at 5%, (13.6% total ) of my overall portfolio. I have a general rule that no one position should be over 10% and no one sector more than 25% of my portfolio. What is 5i's perspective on this and would your recommendations be higher when you're talking ETF's that hold a basket of stocks?

Q: 5iResearch is a great service and I really appreciate all the advice subscribers get on individual stocks. Having said that, can I get 5i's opinion on whether it is really possible to outperform the market in the longterm. Most of the literature I have read indicates that buying the S&P500 (ie. a market ETF) is the most time-tested way to be a successful in the markets.

Q: ..given growing expectations of a Canadian recession, i'm thinking of moving away from utilities into fixed income. how do you expect XBB, XSB and HFR to perform in comparison to ZWU if a recession occurs. thanks, great service.