Investment Q&A

Q: I hold many quality dividend paying stocks which are reaching new highs in the face of a solid wall of risky economic scenarios including a possible real estate bubble, the impact from Brexit and possible Trump victory, probably inflated commodity stock prices, an uncertain energy outlook and so on. Does any of this suggest taking profits and retreating to the sidelines? A recent comment by David Rosenberg posed equity values appear to be whistling by the graveyard. Your thoughts?

Q: Hi,

I have a small (100% in oil and gas) portfolio and am 34 years of age. My investment strategy involves riding the oil and gas recovery in the short term (until early 2017). From this point I would like to reconfigure into a diversified portfolio. My question is, when does a middle/not aggressive/not cautious/average person implement your different types of portfolios? I gather that duration until you require the investment is of most importance with risk tolerance playing an equal part of the equation. But what if neither risk adversity or time are an issue? Should I be 100% positioned towards the growth portfolio?

What are some general rules of thumbs and what are some 'ballpark' milestones for someone who is investing for retirement? I'm after a generic answer that looks something like until:
age 40 100% growth,
until age 50 100% balanced,
then by age 60 100% income.

Q: Hello Peter, I am looking for safe investment with dividends, I have ZEF in my portfolio, I would appreciate your help to rate the above, perhaps suggesting a couple better ones. Also, how would future interest rate increases effect their prises.
Many thanks, J.A.P. Burlington

Q: Hi 5i team,

Could you please tell me whether this ETF pays dividends or interest income? Until now, I have been assuming that CBO pays dividends for tax purposes, but I read an article in the Globe&Mail which states that bond ETFs pay mainly interest income.

Many thanks for the great service.

Q: Covered call ETFs are gaining popularity. Does the technique have risk that isn't being talked about (yet)? It seems too good to be true. You can buy ZWA which owns 30 awesome mega-caps and has a 5.2% yield. Or, you can buy ZRE which contains companies that max their payout to get you that same yield of 5.2%. The first, ZWA, is not exposed to rising interest rates, or, to the housing mania. In that sense, ZWA seems to be a clear winner for income. But something tells me that as more firms make similar ETFs, something will happen. Won't the increase in put/call writing become crowded and a problem? Maybe fees will increase? Have you come across some writing on the subject? I'd like to investigate before putting 3 years of savings on ZWA. Thanks team.

Q: Could you give a general comment about investing in private equity as a non accreditated investor using investX. As a diversification mean, i was thinking of investing 5 - 10 % in a pool of investment. thank you

Q: Hi Peter and Team.
This is an asset allocation question for a 23 Yr old in a Defined Contribution Plan.
Which sectors and percentages would you suggest.
Thanks for your time.

Q: I own HEWJ and ZDM as my International exposure (5% of my portolio). Neither are doing well, especially after the Brexit vote and I'd like to replace them with ETFs with a more positive outlook for the next 2-3 years. Your thoughts and recommendations please!

Q: When doing sector allocations would you includes income stocks such as XYH,CVD and CPD under financials or should this be separate sector? If so what should be the allocations for income stocks?

Thanks
Dolores

Q: Further to Eugene's question about BNN guests, why would guest choose to appear? Is it similar to real estate agents hosting open houses to drum up more clients for themselves?

Q: Hi Team,
I was hoping you could help explain something. I own a five-year corporate bond ladder. This year to date the value of my bonds have fallen 0.91% (which on its own is fine as I hold the bonds to maturity). I am unclear why my bonds would underperform VAB (up 3.56%) and CBO (down 0.16%) in the same timeframe.

I realize VAB has a longer duration on average than my ladder or CBO. Credit quality may be better in both funds, and mine are typically in the BBB range. But is there any other reason why bond funds should outperform specific bonds in a ladder? Is there a scenario where a bond ladder will outperform the bond funds?

Finally, is there any advantage to owning bonds in a ladder at all?

Thank you. Michael

Q: I have been wanted to diversify my portfolio and I was wondering if this is a good list or a bit of overkill. I have recently bought some XBB. I want these for fairly long positions, my concern is that I might be over paying for these as everyone is fearful and flocking to bonds as a safety net. Would it be wise to let things settle or buy partial positions in these etfs. Also would it worthwhile also owning some us long term treasuries. I am looking to try to cover all possibilities so I am not chasing in the future when market conditions change. I would like diverse group to cover inflation, rising market, recession. I know that I cant take all risk off but I would like have some safety net and not hold all equities.

Q: I have transitioned a substantial part of my own RRSP from mutual funds to individual stocks & other investments, with the help of 5i (thanks! Done quite well), over the past 3 years.

My wife is still reluctant to do the same, so we are transitioning her RRSP from mutual funds to ETF's, with only one purchased so far. The specific ETF our advisor put us in was BMO ZDV. At the time, I specifically wanted an ETF with lower exposure to the energy sector.

Unfortunately, we bought in at the August 2014 peak, and are underwater by 20%, even after distributions. Moreover, the distributions have been steadily dropping since we bought in.

Is it time to bail out of this ETF, and if so, what would you replace it with?

Thanks.

Q: The guests on BNN for MoneyTalk, are they paid for there appearance.

Q: Given the global macroeconomic conditions and low interest rate environment, what do you think is a reasonable return of return to expect from the Canadian and US stock markets for the next five years?
Peter

Q: Hello,

What is the proper way to assess ones portfolio performance and over what period of time should it be underperforming before you change your approach?

The equity portion of my portfolio is down 8% for the year which is horrible compared to the TSX. I have lots of solid blue chips and stocks from your balanced, but 25% of my portfolio are small caps (mostly from your growth portfolio) that are not doing well at all.

It makes me kinda depressed to be underperforming an index but on the other hand I know that small caps aren't doing well right now and generally need to be held for several years. Also, if one or two doing really well, my portfolio will too.

So how long do I wait to see if I get the 9% yearly returns I'm aiming for?

Best,

Carla

Q: Retirement Planning

Please comment

https://youtu.be/gvZSpET11ZY

Q: Hi Peter and Team!! Your introduction to the Money Saver Magazine indicated that the investment advisers have to disclose all investment fees to their clients. Do we specifically have to ask for them, or will they automatically be sent to us? Happy Canada Day to all!!! Tamara

Q: I have noticed with low trading companies, quite often a bid or ask of one lot hiding behind it a larger numbers of bids and asks. Often enough I put my bid or ask 1 cent lower or higher than the competing bid or ask and that particular one lot bid or ask moves ahead of me. Are these traders trying to hide the larger number from regular investors that don't have access to second level quotes? What would be the purpose of their actions.

Thanks

Q: I currently invest through a full fee major bank broker and am considering switching back to an online brokerage account with the same bank. The cost saving is obvious, but what is not is the level of security of assets from potential loss due to hackers or by other means. Do you have an opinion as to the level of security provided by either alternative or what means an individual investor should take to protect themselves, particularly with regard to an online trading account?

If this question is not suitable for this forum can you refer me to articles on this subject?

Thank you for your comments