Investment Q&A

Q: Peter,

First, I like the video!

I am hoping you a can address the role that analysts play in the movement of stock prices. On the one hand, I understand and accept that they can have a vested interest in a stock and therefore their predictions as to stock price and the interest they may show in a stock can be biased.

However, when it comes to projecting sales and earnings, their comments seem to be given a lot of weight, as in the company missed on this or that or the company exceeded expectations and the stock price almost always acts accordingly. If they have a vested interest as noted above, wouldn't they tend to underestimate these things so the stock will look good? they seem to be wrong most of the time anyway.

In a nutshell, then, why believe analysts on the one hand but not on the other hand?


Thanks,

Paul F.

Q: It seems that every time I buy a stock everybody else should short it because it drops 12-18% within the next couple of weeks. Here are 5 that have already had this drop recently: Y, AVO, AD, MMW, HNL. Would be a buyer of any of these? I appreciate this type of service that you supply.

Q: Hi 5i,

My question is regarding the model portfolio.

I am thinking to follow the model portfolio with about 200k starting next week I plan to substitute TCN for FSV (since I hold that one already) and a ~ 5% allocation in each of the 20 stocks.

What are your thoughts on this approach, would you substitute any others at this time?
Are you expecting a major rebalance of some of the names in a few weeks?
Would you change the allocation to the current allocation of the portfolio or is the 5% target reasonable.

Thanks

Q: additional comments on lifs and rifs, you have to be 65 on jan.1 before you can split income, all lifs rif and company pensions can be split, but not old age security or Canada or quebec pension. dave

Q: Am I wrong or have the number of questions asked recently been growing substantially? If so would you ascribe this increase to a greater number of small investors getting into the market or simply to more investors using your service?

Q: Dear Peter,

Don Vialoux has spoken a few times, most recently on BNN, about the behaviour of the market in mid-term election years. He suggests an interesting pattern for these years: that the market takes a dive in January and then rallies between February and April. From April until October, the market takes another dive, and then begins a huge rally from October to the end of the year. His data goes back approximately 60 years. I realize that 5I believes in long term value investing, and not technical analysis so much, but I was wanting your opinion nonetheless on Mr. Vialoux's thesis.

With all your experience in the market, have you noted such similar co-relations, and if so, how would you play the position with the higher risk stocks in your portfolio? (My view would be that it would be a good time to add to higher risk companies which are essentially solid otherwise, but are experiencing volatility, and to hold down the tent on the conservative parts of the portfolio.)

Your opinion is much appreciated. Thank you.

Q: New video feature - what a great idea. Bravo.

Q: Hello Team,
Just came across this article in The Telegraph and it fits in with my thinking and why I invest independently and rely on the 5i Team for additional advice. Fellow 5i members may find it of interest.

http://www.telegraph.co.uk/finance/personalfinance/investing/10636217/Terry-Smith-Investors-are-their-own-worst-enemies.html

Kind regards,
Ronald

Q: Thanks for the answer on div of the banks

I found this blog that seems to have done a study of all of them big ones

http://spbrunner.blogspot.ca/2014/01/bank-of-nova-scotia-2.html

perhaps needless, but still to say that I am not associated in any way with that blog and cannot vouch for the accuracy (or lack of) of the info there

Q: re: Scot/Feb 13 - thanks for the info on 'www.longrundata.com'. Be careful with it: enb=22.43% but enb.tse=18.63%. Shud b same: arbitrage. Not all work ie. atd.b.tsx

Q: can you tell me what has historically been average highest and lowest dividend rate of canadian banks?

Q: Tax treatment of spousal trusts. Can income in a spousal trust be taxed in the trust using the graduated tax levels or must all income be taxed in the hands of the beneficiaries at their marginal tax level. Hope this is not too far off topic. Thanks.

Q: Re question on life income fund, after you turn 65 in canada all income from lif and rif can be split with your wife.dave

Q: In response to James,
A LIF is essentially a RRIF, so if James is 65 years of age before the end of the year, his RRIF withdrawal in that year would qualify as "eligible pension income" that can be split with his spouse on his tax return

Q: Re James question about splitting income from a LIF...the following is from CRA's website:

What is eligible pension income?
Eligible pension income is generally the total of the following amounts received by the pensioner in the year (these amounts also qualify for the pension income amount):

the taxable part of life annuity payments from a superannuation or pension fund or plan; and
if they are received as a result of the death of a spouse or common-law partner, or if the pensioner is 65 years of age or older at the end of the year:
annuity and registered retirement income fund (including life income fund) payments; and
registered retirement savings plan (RRSP) annuity payments.

Q: I am 65 years old now, I have a Life Income Fund that I got from converting a Direct Contribution Pension I earned from a large Canadian company, do you know or any of your readers know if I can split this income with my wife?

Also could I have your opinion of Birus Gold and Sea Drgon Energy?

Very pleased with your service and recently reviewed for another 2 years.

Jim

Q: Just a comment. Just saw Peters video answer to timely question. A nice touch. Well done.

Q: In response to Nick about past intraday charting, I always use MSN (http://money.msn.com) but you need to enter "CA:" before the ticker, its chart are the best I've seen, and you can view all charts by date, and they are also very flexible (1.2 years...or what ever you want, by clicking you mouse on the chart and using the scrolling button) hope this helps.

Q: In response to Nick about past intraday charting, on the TSX site if you bring up a specific stock, you can then go to "price history". Enter a date and it displays the chosen days' high/low and volume. Not quite a graph, but probably what he wants, and goes back several years.

Q: I gather you don't report on US markets.