Investment Q&A

Q: Wondering if 5i comment and/or any current and 2012 (1st year) subscribers claimed 5i membership as a deduction claim on "carrying charge" on Line 221 -> I'm saying that 5i is financial research not a newsletter magazine. I'm doing it again for 2013. I didn't have any problems for 2012. Peter / 5i staff -> you've done a great job!

Q: PHE is the Tactical Hedged Equity Fund from Purpose ETFs, which Som Seif is now involved with. Assets are now above $50mm, performance has been reasonable since inception last autumn, and management fees are under 1%. Would this qualify as a true hedge fund in the same league as Picton Mahoney and Donneville Kent's as net market exposure seems high around 80%, and how would their mandate for hedging the equity market compare with the others including Venator etc.? Also do you have any opinion on the 5 Purpose ETFs in general, or any experience with Som from his time at Claymore? Thanks, J.

Q: What are your current sector waitings for moderate to aggressive investors? Thank you

Q: Hello Peter....Now with a diversified portfolio, I'm looking to sort the existing holdings and new additions between 3 accounts - new TSFA, adding to non-registered account and managing an existing LIRA account that is can be drawn down beginning in 2107. I'm doing this because of the different income tax rates related to gains, dividends and interest as outline in recent 5iR Q&As. It would be helpful to me to know the holdings in the model portfolio and the income portfolio that you consider to be foremost growth oriented. For those, I would allocate to the TFSA. And I take it for ones like Surge that is growth oriented but with a high yield of about 8%, you would consider assigning it to the non-registered account. And ideally, fixed income and trusts would be held within the LIRA account. Thanks for the guidance......Tom M

Q: A friend recently brought up an investment opportunity for puddle pond resources, a junior mining company located in newfoundland. How can you properly research these companies that are not listed yet? The news articles on their website sound promising, but I also know they are trying to raise cash. I have never invested in unlisted companies and would appreciate any info you can provide.

Q: I am underinvested in US stocks - my USD account is only 1/30 of my portfolio.
1. I have missed some great opportunities and I can't buy anything without incurring 11.3% exchange ... HOWEVER People are talking about 15% exchange in coming months.
2. I don't wish to be too late in play if the CAD returns to Par.
3. What is the smart money doing ?

I guess it is best to inch into these things ...
You talk about having 1/5 in US equities and I'm not even close !...

Q: I have a large portfolio consisting of Canadian stocks - large cap only. I think my portfolio should be more diversified and I was wondering what percent you would suggest for your model portfolio as well as US stocks. And would you put the US stocks in an RRSP to avoid withholding taxes? Thanks for the advice!

Q: Hi 5i Team,

I cannot find a consistent definition of small-cap, mid-cap, large cap, and even micro-cap (anything else?). Everyone seems to have their own definitions. Since you use these terms frequently can you define in terms of market capitalization what they mean to you (5i research) for Canadian and US stocks.

Also what are the market capitalization values that seem to trigger more investor interest in a company? For Canadian stocks it seems that once market cap reaches one billion dollars, it gets more investor interest (I think I read that here).

Thanks,
Paul

Q: Over the past few years I have made significant profits in the markets.How do I safeguard thse profits as I FEAR A SIGNIFICANT correction is looming?I have vivid memories of 2008.Is a 10% stop loss a good way? Or what can you suggest> Thank-you

Q: Dear Peter/team,
It is very nice for you to answer all members questions and as membership increases - I think it will - you may not have time to answer all their questions, and some members are demanding a lot.
I wish you would put some more time on the real research than answer some of the repeated questions.
Thanks Again.

Q: The website adjustedcostbase.ca lists Canadian MoneySaver as featuring their free service. Do you recommend using this service for tracking adjusted cost base and capital gains?

Q: My question is about cash flow.
1) When you look at cash flow (in lieu of net income) to see how the company is performing, are you specifically looking at "Operating cash flow"? If not, then? Additionally, when we read other analysts in various publications talk about cash flow, do they usually use the same definition as yourself?
2) When a company does capital investments (even if paid in cash), I believe this is not part of "Operating Cash flow"?
3) If my assumptions are correct above, then I have to believe that a company that is constantly investing in new capital initiatives, is therefore very capital intensive and would have to eventually demonstrate that this is not going to go on forever, otherwise I would believe that this cash flow metric may not be ideal?

Thanks again.

Q: Addendum to my last missive re balancing/Bep.un. Sorry Peter, I meant to thank you for working so hard to instil discipline in us. Tough work, good teacher. Thanks! Henry

Q: Good afternoon 5i team. To echo what so many members are saying, this is by far the best service I've subscribed to since becoming a retail investor. Thanks for everything so far.

In your April 3 response to Heather's follow-up question on brokerage account risks, you concluded by saying "Getting certificates out and in your name provides the most protection". Could you explain what this means? When I buy a stock for a registered or non-registered account, I get a PDF confirmation from my broker (Scotia iTrade). Is that a 'certificate' you're referring to?

Q: Great service, love the q&a forum, the tweets, the blog, and the fantastic education. I am learning every day and have done very well since joining last spring.
I am dividing this part of my financial plan into 50% Model portfolio and 50% Model income portfolio. I need to buy 4 of the Equity, SJ, BDI, CCL.B, and top up AYA, and also purchase 11 of the Income portfolio. I am just wondering how fast I should execute the purchases given, the fact that we are moving into the April, May, spring summer period now. I am not expecting a portfolio assessment. Thank you.

Q: Hello Peter,
Would you recommend using stop loss orders in some circumstances?
Do you know where a retail investor can get access to what stop loss orders have been entered and at what prices? (Similar to Level II quotes for bid and ask).
Thanks,
Russell
Thanks

Q: Hi Peter. Read question from Paul (April 2) and your answer regarding holdings in one financial institute brokerage account. My question is, maybe a misunderstanding on my part, regarding solvency of banks. I have all my stocks etc at TD Waterhouse well over the $100,000 insured amount. Are all the stock holdings at risk or is it only the cash portion over the $100,000 that would be at risk in the event of a financial solvency at TD. Thank You.

Q: Just read an article that I would like to share with your readers
if you agree - especially the young ones.

www.milliondollarjourney.com/lessons-from-a-50-year-old-multi-millionaire.html

Q: where can one find a list of the 10 tsx sectors, and the companies with in each. thankyou.

Q: Hedge Funds

Can Hedge Funds be bought through a self directed RRSP?
Is there a way to buy HF in amounts less then 200,000 and if so, how?