Investment Q&A

Q: Still not sure what to do. Sell or Hold my stocks. You said earlier that they would settle the Dept.Ceiling but it's getting very close now. I'm hoping i'm not asking this to late to get a answer. Would need to know by noon Oct. 16th. If they don't settle should I be selling my stocks. I'm up quite a bit so i'd hate to lose it. Hope I can get a answer soon. Thank You Very Much For All Your Help. Andy

Q: An article of interest to members on Nobelist Eugene Fama: "So Fama’s ideas have made an enormous contribution to how people invest, saving them billions in fees which generated beautiful homes for fortunate mutual fund managers but less than nothing for their customers." - See more at: http://marginalrevolution.com/marginalrevolution/2013/10/eugene-fama.html#sthash.fZuPDfSt.dpuf

Q: I am looking to diversify into US and International markets using Vanguard ETFs. Would you recommend purchasing Canadian Hedged or Non Hedged ETF?

Thanks

Q: Peter,

About a year ago you were on BNN stating that you’re after the next ‘50 bagger’. A few months ago, another member asked you about your fav past picks, to which you replied Priceline and one other (I believe). My question is related to smaller cap / speculative stocks, you current favs, and is obviously geared more towards those willing to go up on the risk curve:

1. Do you have a couple, more speculative, names that you are a fan of right now (ie. what you feel can be the next 50 bagger)? Anything that you are ‘pounding the table’ about?

2. Do you have any general tips / guidelines that you can share relating to investing in these size companies (ie. Don’t invest more than ___% of your portfolio in micro cap / spec stocks?)

Thanks you!

Q: A few questions about FXM and WXM, which are Morningstar's ETFs that follow a momentum and value style respectively. These have spectacular >20 year 'theoretical' ie. backtested records. Is this something that will likely beat the TSX in the future or are there usually problems with backtested mechanical strategies going forwards? Do they trade at a premium to NAV and where do I find their NAV figure? Thanks.

Q: Hi This is a follow-up of Neil's question (Oct 11) about CIPF coverage. If I have a margin account but don't use margin or shorts, would it have the same safety as a cash account? What if I have some options? Thanks Henry

Q: Peter, if I have 2M$ in the stock market all with, for example Scotia I-trade, would it make sense or be advantageous to move half of those equities to another stable/secure discount trading house such as TD so as to be able to get CIPF coverage on all of it, and to not have all my eggs held in one basket? Would the CIPF coverage cover 2M$ in that instance, if I spit it up?

Q: Portfolio Management - I have held both HCG and ATD.B for a long time, so that they have become a large percentage of my portfolio. I don't like selling winners, but I recognize that there is risk i everything. Even a great stock can get side-swiped by events. How large a percentage would you hold before trimming the stock of a high quality company?

Thanks,

Hans

Q: EIF and now AET.un: "Leaky"

My primary major concern is with EIF's leaks, big drop in share price and then a quick bounce. Anyone having inside information, at one point yesterday, would have at least a 26% one day win off the low while the rest of us took it on the chin and in our pocket books to to speak.

Now today we have what looks like leaks in AET as per another member's question.

When do the powers that be step in and call these companies on the carpet to account for this behaviour?

I am an investor who can deal with volatility BUT NOT when someone else is playing by a different set of rules.

I know somone who emailed EIF but they did not even get the courtesy of a reply.

I would appreciate both your insight and suggestions for handling these kinds of events.

Thank you.

Q: Further to Brian on Sept 30th on preferred shares (PWF.PR.S & BRF.PR.E) are there other preferred of this quality available that pay a good dividend and are below par value?

Derek

Q: Hi Peter,

My son is planning to go to University next year and I did some bad investing decisions for his RESP portfolio including investments in WIN, AM etc which dropped in value a lot. The portfolio currently has the following:

KBL (40%) down 7%
LOY(18%) down 19%
HWO(24%) down 5%
INA(18%) flat

Would you suggest a replacement to these investments (the total current value is around $15.5k) so I can at least gain back the 30% I have lost, over the next one to two year time frame. Thanks a lot

Q: I hope this is not as dumb as it may appear....There are many very good companies and ETF's that are illiquid, some trade by appointment only. Is the biggest factor in this the fact that the shareholders are unwiiling to part with stocks due to their perceived quality of the company/ETF?

Q: Considering your model portfolio, would you continue to deploy new cash into it and spread it out evenly amongst the stocks (or just the winners?) or wait for the debt ceiling thing to get resolved?
thanks. Really appreciate the service.

Q: When a company removes its land holdings to form a separate REIT
from a company which I hold shares in why does that not weaken
my investment in that stock ?

Q: Peter and team,

Love your latest post on the Mutual Fund industry. So the big question is when will company defined contribution plans, like the ones managed by Standard Life etc. be forced to offer a wider range of investment products (including ETSs) that allow the employee to reduce the fees associated with their plans. In many, you just have a choice of a basket of MFs all with high MERS. This has been going on for years and employees have little or no choice if they want to participate and contribute to these plans and get the employer match. Sounds like some activism is needed!

Q: Are the results that you sjow on the summary list one year returns or since March 2013?
GUY

Q: Hi Peter and team

I am concerned about the possible default of the U.S. Should we take some defensive measures to protect our portfolio?

Hope you are enjoying your well-deserved vacation.

Joanne

Q: 5i Team,

I hope all is having a great 'workation'.

I have a market strategy question relating to portfolio balancing. For most investors, maintaining a balance portfolio is the best way to hedge market risk / volatility (for the purpose of this question, lets ignore the quality and size of companies being purchased, obviously that is extremely important in any scenario). Theoretically, take 11 sectors and try to maintain relative equal weighting (recognizing that it’s impossible to do so perfectly given daily market fluctuations), hence, a ‘perfectly balance’ portfolio would look like:

Utilities – 9.1%
Consumers Staples – 9.1%
Capital Goods / Industrials – 9.1%
Energy – 9.1%
Financials – 9.1%
Health Care – 9.1%
Consumer Cyclical – 9.1%
Transportation – 9.1%
IT – 9.1%
Materials – 9.1%
Telco – 9.1%

Questions:

1. For a client who is willing to go up on the risk curve, are you ok positioning a portfolio overweight / underweight in sectors that you think will outperform / underperform?

2. Given today’s macro economic backdrop, what sectors do you think will be outperforming / underperforming over the next 1-3 years?

3. Finally, I am a 30 year old investor maintaining a small, relatively balance, six figure portfolio. I will be transferring over additional cash to deploy within the coming weeks equal to about 50% of my current portfolio size and am trying to determine how best to position myself in the 11 sectors. I have time on my side, and future cash to invest in coming years, so I’m not overly worried about taking on more risk if I think it can lead to higher returns, but don’t want to be stupid either. As such, assuming I maintain a relative balance of small cap and large cap companies, what weightings do you think I should aim for? How would you position a portfolio TODAY within the 11 sectors for a more ‘risk on’ investor?

Utilities – ?
Consumers Staples – ?
Capital Goods / Industrials – ?
Energy – ?
Financials – ?
Health Care – ?
Consumer Cyclical – ?
Transportation – ?
IT – ?
Materials – ?
Telco – ?

Sorry for the long question.

Q: I'm not to sure how it all works. But on oct. 17th. The US National Dept. might come into play. A friend of mine told me maybe we should be selling ALL of our stocks. Ever since we've been listening to you guys were boyh up. Him about 25% & me about 35% we really don't want to lose our profits. So do you think we should be selling or holding on. We really appreciate all the help we've received from you. We'll be waiting for your advice. Thank You Very Much. Andy

Q: Yesterday Carl Icahn said that he if "fully hedged" right now due to the stupid political games etc being played out in DC and the resulting market uncertainty.

1. What would "fully hedged" mean in the context of a Carl Icahn?
2. How can the rest of us non Carl Icahns hedge our portfolios?

Thanks.