Investment Q&A

Q: Good morning,

Can you tell me the effect of the increase of the interest rate in Canada on each of the tsx sectors?

Thanks
Paul

Q: A number of posters list off several holdings in a given sector. If you hold several stocks in each sector, don't you end up with an unwieldy number of stocks? Are there sectors where diversification is more important than others? How does one determine how many stocks in each? Am I missing something in thinking you'd end up with insignificant amounts of a large number of stocks? i know: a lot of questions. Dock whatever seems appropriate.

Q: Hello 5i team,
I’m 74 years old; with due diligence and with the contribution of people like you, my RRIF portfolio is behaving very well. My plan is to deplete the RRIF portfolio at age 90. The revenue from this portfolio will continue at the same level if I get a 7% compound annual total return in the next 16 years.
Unfortunately, we expect a recession sometime during those years. If I were to ride the recession, the value of the portfolio would stand still for (let’s say) 5 years and if the portfolio were to grow by 7% in each of the remaining years, my revenue would drop by a whopping one third. In order to maintain the expected level of revenue, my excel projection model indicates that I should obtain a 20% growth per annum instead. That is unrealistic.
Alternatively, I could do what I did in 2008. I sold my holdings after incurring a 15% decline and re-entered the market a few months after it bottomed and started on its recovery path. If I did that and planned for a 7% growth per annum, the revenue would drop by 13% only. That is quite acceptable because there is a 10-15% safety margin in my revenue forecast…a cushion of sorts.
If, however, I knew when the recession will occur, I would exit the market ahead of time and re-enter after the bottom…”but that is another story”.
I would greatly appreciate your collective opinion.
Best regards,
Antoine

Q: Regarding sector percentage allocations, please suggest an appropriate mix for someone in their 70's with protection of capital as the main goal and being aware of the changing interest rate environment. Thank you.

Q: I've spreadsheet-ed all 5i stocks plus others and populated each stock's core fundamental and technical factors. If you could only sort & rank by "Earnings per Share" Growth Rate (i.e. 2016, 2017, 2018) or Earnings Yield (TTM) which one would you choose to rank stocks by and why?

Q: On July 7, 2017 in answer to question about ENGH posted by KC, you state that "...We really do not expect the tech decline to last long." How so? What parameters you look at? Are these fundamental or technical? Thanks

RR

Q: Hi Peter & co.: I often hear the term "full position or half position " what exactly does that mean?
Secondly, how many companies should one monitor in their portfolio? Thanks

Q: Good morning Peter,

When looking at reversion to the mean, the near-term chart can be different from the long-term chart. For instance, the one-month chart for QQQ at closing on Friday, July 7, shows it to be below the mean suggesting a good buying time. However, the 10-year chart shows it to be significantly above its mean suggesting a good time to take profits.

Which is the more important indicator?

Thank you.

Milan

Q: Hi 5i team,
You recently mentionned that you expect the downturn in the technology sector to be short lived, because it is one sector where investors can find growth, and that the down trend could/would/should be reversed when second quarter results start to be released. What companies (presumably in the USA) will start this release period in the technology sector and at what dates? Thank you, Eric

Q: Would you prefer the hedged or unhedged versions of these ETFs for a RRIF?

Q: I have read in the past in which you give a suggested total % weight for the 10 sectors but I can't find the question in which you answered this question so if you could give the suggested % again I appreciated this.

Thanks

Q: An observation/rant regarding TFSA accounts.

It appears per the media that the good ol' gov't lied to us CDN.'s about what we could do within a TFSA account or at least set people up so they could get their taxes from people's TFSA (TAX FREE Savings Account) in the future (starting now).

As I understand, the gov't said stock(s) could be bought & owned within a TFSA. But the gov't never said there was a minimum time period that any specific stock had to be held and owned for. So the smart ones who know how to trade during shorter time frames, or put lots of the their TFSA into say, SHOP-tsx, CSU-tsx, KXS-tsx... have grown their TFSA to as much as $1 million dollars and a few have even grown theirs beyond that per the media.

It appears the gov't wants its cut now.

As a long time (decades) investor and trader I take objection to the media and financial world's BS around the issue that "Investing" is holding for a longer time and "Trading" is "Gambling" when done in shorter time frames.

I have always seen Trading and Investing as the same thing. That being, speculating that the stock's price will be higher in the future, (setting aside Shorting) be it, 5 minutes, 5 years or 5 decades. It is an unknown and some may say either is pure speculation or gambling. Both are trading over different time frame periods. That is the only difference. Period.

Technicals and Fundamentals are both used to project (speculate) about the future.

To use a real but just singular & extreme example, of the original big companies from the original DOW only GE remains. So if anyone bought the original DOW (or if there had been a DOW ETF) and "Invested" by holding they would now be on welfare as they would be broke. So Investing is not any better than Trading (knowledge is required to succeed in either).

5iResearch also trades regularly, as do investors like Warren Buffet.

So I wish our gov't, the media and financial industry would stop playing games with us so regular people can make some $$$ so as to support themselves, spend $$ on goods, start businesses to give people employment, ...

Lastly, if those with a TFSA of say $100k, $500k or $1 million have not removed any $$$ from the TFSA are they not SAVING it in a TFSA (Tax Free SAVINGS Account)?

Have a great day!

Q: Surely, among the 58,000 questions which you answered there are some about your views on John Bogle's idea of "Don't look for the needle in the haystack. Just buy the haystack." How can I find them?
Alternatively, can I have your views now?
Thank you

Q: We are still sitting with 20% cash waiting to deploy on downturn. Would like to enter market soon in your income portfolio and increase a 1.5% holding in IGM or other tech etf. Would now be a good time begin on the income portfolio and which tech etf would you favor. Thanks for your great service.

Q: It's frustrating to own a stock like EIS that is infested by the short sellers who have no scruples about the interests of other investors in order to get their loots.

Have there been prior class action suits of the shareholders taken the short sellers to court for compensation if their basis of shorting the company happens to be false or pure fabrications? Are there lawyers who specializes in these type of suits?

Just curious. After all the door should be able to swing both ways.

Q: How useful have you found valuation methods like Earnings Power Value, Graham Number and Discounted Cash Flow analysis in stock selection?

Q: I see a couple of concepts repeated in your answers: 1) if you have a short term need for cash (buying a house within 1-2 years eg) you should hold cash or cash-like investments (i.e., not equities), and (2) in general, some equity investments may be ok, but only for a 3-5 year hold.

Can you walk through the mechanics of how to deal with the situation of investing when you know you'll need cash after, say, 4 years? Do you buy good diversified equities (eg BE portfolio) and hold for 4 years, committing to yourself to sell only on the day before the 4-year period is up? Or do you buy such equities, but then slowly rotate into cash (when?)? Or commit to rotating into cash at the 2-year mark or some other arbitrary date? Or do you assess the situation at the 2-year mark (e.g.) and hang on, or not, depending on whether the portfolio is high or low?

Wondering what your thoughts are on buy/sell strategy in such a scenario. Thanks.

Q: With interest rates likely increasing this month in Canada and also the USA, would you put any extra cash into bond funds (like CBO,XHY) or preferred shares right now; or wait to see if the prices decline with the new higher interest rates?

Thank you.

Q: How do you suggest playing the upcoming increase in interest rates >

Q: Is writing covered calls on a US Market Index ETF (e.g. SPY, QQQ) safe?