Investment Q&A

Q: Hello, I would like your opinion on a macro economic situation. The "govt" keeps expounding the line that there is virtually no inflation and the central bankers (fed etc) can keep printing more money because of this. However, in your answer about G you mentioned that the cost of production keeps going up for the miners. All of us "commoners" know that everything that we have to buy is going up in price or being disguised with smaller packages etc...so my question is this: how do these two opposing situations of talk vs reality play out? As a small retail investor I am very concerned about where we are headed and what is going to happen to ones savings?
Thanks for your insights.

Q: Can you explain the signifigance of beta? What is the effect of a beta well above or well below 1.0? A negative beta?

Q: Regarding Ronald's post on the value of NOT using stop losses in IPL's quick drop and bounce case. The flip side to that argument is easily demonstrated by my position in Goldcorp. If I had used a stop loss as I normally do, I would not be sitting on thousands of dollars loss in this position. Buy and hold is a miserable solution when "good" stocks go bad, which they all too frequently seem to do. My normal habit of being willing to summarily dump losing stocks early with stop losses, has now been enlivened considerably.

Q: Hello,

I currently hold CML healthcare. When the buyout occurs which stock would you recommend to replace this?

susanna

Q: Hi Peter & 5i: You mentioned the potential for the flooding in the western prairies area to impact drilling operations on effected lands. I'm wondering more broadly about whether you have any thoughts on other businesses that may be impacted significantly. Unfortunately located REIT properties come to mind on the negative side but there must be other examples. I don't know whether there are "clean-up" oriented businesses that might actually may do well as a result of the disaster. Can you expand my thinking here with suggestions of any stocks that bear extra-careful watching while the waters recede? Thanks!

Q: Hi 5i If a good quality company pays a good dividend , say 4%
and as this market shows all companies can be pulled down in price will the dividend be affected negatively if the stock drops 15% but the companies fundamentals remain strong ?

Q: I notice that at this point you have no insurers in your model portfolio, is this likely to change when you feel that interest rates will continue their uptrend?

Q: Can you point me to some decent Canadian commodity stocks. I had TCK and POT awhile back but dumped them when they started to tumble.

Q: People keep saying that since the market has been going up so fast, it was time for a breather. However, the CDN market has not gone up much at all and yet it is getting hammered right along with the US market as if we also had been "frothy". Are there better values in parts of the Canadian market now, as compared to the US?

Q: The dividend stocks are getting hit hard including all the large cap blue chips. I think it's just a normal correction since they've had good run ups for a long time. Is the income dividend scenario over.

Q: Hello to all ...my question regards the Bernanke announcement of pull back on bond buying by the fed. Is this the precursor to stopping ALL QE in 2013 and then raising interest rates at some time in 2014? And are hyou people still confident interest rates will stay low till late 2014 ?

Q: Hi, i'am wondering if 5i research team would have a quick formula to get a fair value of a company vs stock price, when you look at a company financials. I've read books on buffett got a few tricks. thanks.

Q: I'm not sure if there is an answer which can be given so I apologize in advance if that is true. The markets don't appear to like Bernanke's statements going by market action from 2 PM on and tonight's futures. My question is what should we be watching for in the near future to determine whether this is knee-jerk or the start of a serious reaction.

I know the obvious--whether the market goes up or down but is there anything else to watch such as extent, duration of any down, volume or some other internals. Are previous support levels still relevant in any panic?

Bryon in Elmira.

Q: The view expressed on BNN tonight is that dividend stocks are going to take a big hit because of the changing interest rate environment. I am concerned because I am very much a dividends first investor. Could you comment, and, by the way, keep up the good work. David

Q: Peter,

My question in regarding how ETFs are run. If a ETF provider, wisdomtree, schwab, BMO etc., should go bankrupt/insolvent, what happens to my money in their ETFs? Are these funds held segregated from the firms assets? if so, would it be better to hold companies directly to avoid this?

Q: Good Morning all, I have been working on building a 5i portion of my investments since December when I became a member. Each month I have been adding one or two stocks. Overall, I am deploying roughly 15% of my total investments to stocks covered by 5i. The other 85% of my portfolio is well diversified in a variety of Mutual Funds, ETF's and fixed income GIC's. The stocks I have purchased and the current weighting are as follows:
Carfinco - 4.12%
Parkland - 13.72%
Ag Growth - 6.56%
A&W - 3.6%
Brookfield Energy - 12.38%
Cineplex - 5.94%
CML - 2.99%
H&R Reit - 4.78%
K-Bro - 9.82%
Liquor Stores - 7.5%
Richards Pkging - 5.52%
Black Diamond - 5.97%
Boston Pizza - 5.5%
Goldcorp - 4.03%
Healthlease - 2.67%

I will have cash to invest in early July. My questions are:
1. Should I be picking another stock or buying more of one I already have?
2. If I should buy another name, what would you pick? If I should buy more of a current holding which would you recommend?
3. Should I sell or switch out any of the current names I hold?
Thanks again for your awesome service...best available on-line!!

Q: Good morning Peter and the 5i team, In the preamble to your model portfolio, you state: "Each individual investor needs to decide what exposure they should have to bonds, preferred shares, cash and other investments based on his or her own unique circumstances." My target is 60% stocks (chosen mainly from your recommendations), 20% bonds, 10% preferred shares, and 10% cash. If you had to choose among several ETFs for the bond, preferred share, and cash portion of such a portfolio, what ETFs would you recommend? Thanks for your excellent service and advice.

Q: Hi Team: a general question on rising rates and the "positive impact" on lifecos. How is it that with all of their bond holdings, they can benefit as rates rise? Everyone else gets hit; but they don't? thanks

Q: Hi guys I would like your opinion on which utility stock, I have aqn,fts and npi, I should reduce in order to buy pwf or could you suggest a similar type of company with a prospected of capital gains when interest rates raise.

Q: Hello 5i Research,
When holding US dividend paying stocks there is a 15% with holding tax applied to any dividends held outside an RSP.

If the after tax dividend rate on the US dividend is equal to a Canadian dividend, is there any tax advantage, as the with holding tax has already been paid on the US dividend.
Thanks.