Investment Q&A

Q: Interest rate sensitive sectors are under performing possibly due to a December rate hike from the Fed. Do you think the reaction is overdone? Good entry point on REITs and Utilities?

Thanks,
Jason

Q: There is something I'd like to share with your members. I've been tracking 3 portfolios in detail for the last 18 months. One of them is a "couch potato" self-directed account, one is a mutual fund account while the third is an RBC "wealth management" account. The top performer believe it or not is the self-directed account!
It would seem that the outrageously high portfolio management fees in Canada are indeed not justifiable (based on my limited findings at least).
I am writing this message to add my simple voice to the growing chorus of individuals managing their own financial affairs. It works! I hope this simple message will encourage your members to keep on the path that they're on.
Now for my question - in another response you mentioned that brokers add to their revenue stream by "lending clients equities held in brokerage accounts" to short sellers. What percentage of a typical brokerage firms's revenue would be derived this way?

Q: You have often mentioned that you like to hold some gold in a portfolio as "insurance" but I am wondering how this strategy differs from that of holding a well-constructed portfolio. To me, insurance is something that pays out cash when things go bad. I understand that gold can be that asset that increases in value when things go really "bad" but is the suggestion that you would then sell the gold at that point? If you don't sell then, isn't the value of gold likely go down once things recover and other than a portfolio that stays even on paper, at the end of the cycle you really haven't created any new wealth. My concern with gold and gold mining companies is that these assets don't seem to create long-term wealth and would, therefore, be more appropriate for a person with a trading strategy than an investing strategy.

Thank you and appreciate your insight.

Paul F.

Q: I just read a globe and mail article on line about changes in short positions between the 15th and 30th of September. This article shows a short of 100,000,023 which is over 10% of the o/s shares. One, how is this possible and two, how do I find out whether any of my shares are being loaned out for this purpose?

Q: Hello 5i team, Could you explain what is gold streaming and how revenue is generated and taxed? What is the difference between streaming and royalties? Would you recommend investing in streaming companies such as franco nevada as an alternative to have gold in your portfolio or in conjunction with? Would this be considered in the income portion of a portfolio? If you know of a good source that explains it please post. Thanks in advance

Q: I keep reading about this, but NO ONE can tell me exactly HOW to ENROLl in these DRIP Programs. I even dropped into the office of Agnico eagle around the corner, and they did not know.....telling me to see by broker. I also wrote to someone I respect very much at ROB, but to no avail. Can you please tell me how?

Thanks as always!

Q: Some time ago I asked about this fund TRIMARK GLOBAL ENDEAVOUR FUND. and you mentioned the MER is quite high.If I am thinking of selling this fund and would like to know what stocks or ETF would you replace this fund with?

Thanks
D

Q: This is a general question on IPOs: my son works for a small laser company in the USA - medical lasers used for all kinds of cosmetic procedures that people pay for directly - mostly women. He is in sales and is doing very well. They are going to market with an IPO in the near future. Any general comments on buying IPOs?

Q: Hi Peter and team, If interest rates go up in US but down in Canada what is the likely impact on CPD. Also, in a broad market selloff of greater than 10% how strong is the correlation of CPD to the overall market. Thanks

Q: Good Afternoon
After almost two years should I change my asset allocation? I have 40% of my portfolio in 3 High conviction equity funds, Canadian, U.S., and International. What % would you suggest at this time? Other holdings are mainly income with a few specialty holdings.

Thanks to the team

Q: Over the last few weeks a few precious metal experts have been on BNN and the majority of them predicting $1,400 gold by year-end. How could these professional people be so wrong on live TV?
Dennis

Q: When a dividend is paid, where can I go to determine the breakdown between the true dividend vs the return of capital?

Q: Hi Team,

When buying a stock, sometimes there is mention of "full position or half position". How much are these in percentage terms of a portfolio? Also how small a position can be in absolute dollar terms to be a meaningful contributor?

I really admire your ability for quick turn around and succinct answers to all the questions all day long.

RR

Q: I don't know if this question comes under your umbrella. It concerns money borrowed to invest, with the aim to claim the interest for tax back. I have done a Google check but i am not sure whether all loans can be used this way. currenly I use a small margin credit on my accounts, which comes to 3.75 per cent. I know that I can do much better than that, if i borrow on my house. But, would such a loan be seen as tax deductible for investing services.
thanks

Q: I am supposed to increase my fixed income exposure via one or more ETFs. I see you usually recommend CBO, but what about VSC. VSC seems to be a better performer over the last 1, 3 and 5 year periods. Which is better in your opinion and why?

I have about $21K in cash in an RRSP to invest in fixed income products. Should I buy two or 3 ETFs, or all in CBO or VSC is sufficient?

Should I buy now, or wait until after the US election, or even after FED meeting in December to see if they increase interest rates? Does it really matter at this time?

p.s. I have been invested in over 90% equities for the last 25 years (now 53 years old) so I am struggling to get myself to buy fixed income products. I am reluctantly buying fixed income products only because I know I am supposed to have better asset allocation and not be so heavily equity focused, but today the returns are so small I wonder if I would just be better off buying stocks like BCE, T, SLF, FTS, IPL, PPL that pay around 4% dividend.

Q: I have found that my best returns are when I reduce my portfolio size to 8-10 stocks.I know that according to almost all experts that my portfolio would not be properly diversified.I find that a investor such as myself can not spend the amount of time needed to keep up to a 20 stock portfolio.
The easy answer of course is to hire someone for my investments,but I have unfortunately been burned twice by investment professionals,and unwilling to strike out the third time.
Is there anything wrong with keeping a 8-10 stock portfolio, where I can keep a close watch on the news and the financials.
I personally think that is why your site is so helpful because the average investor do not have the resources and staff of a professional money manager.

Q: Kudos to Ryan on his strong performance on BNN last Friday. Great ambassador for 5i!

Q: Heizel is correct. In each of our RRIFs with Scotia Itrade we pay $30.00 a quarter and our U.S. purchases and sales are made at the rate for the bank,not its customers.

Q: Besides subscribing to 5iResearch, what are some investing books/annual report letters or any document you recommend your subscribers read to become better investors?

Q: Hi 5i team!! I am at a conference in Arizona, and just the feeling I get polling my colleagues, all of whom are academics, the general consensus is that Trump will be the next US president. Hillary is not a favorite because of allegedly crooked behaviour which I was unaware of. The way I look at it, neither one, Trump or Clinton are a good choice but that's a moot point. So, to my question...what do you suggest.. If the Donald gets in ...should we sit tight on your suggested portfolios or sell certain stocks, or sell everything and head for the hills ? Which stocks will do poorly and which ones may do well? Cheers, Tamara