Investment Q&A

Q: re Saad question
My wife entered the market for the first time in march 2009 with a full service broker.
A performance review lately showed a profit of 16%, not per year, for the entire period. The broker was VERY proud of the performance...
I have been looking for a broker for the better part of the past 15 years for my own portfolio, fired one and WAS fired by another one, gave up and manage everything myself. Peter entry in the retail investor world void of real/unbised information has been a breath of fresh air and provide a much needed support. But I think I still have to do my homework.

Q: Peter and Team,

Here is a question about bonds. Let's say you buy bonds of a major Canadian, credit-worthy company that mature in 2015. Let's also say that interest rates keep backing up (thinking of US 10 year) way past everyone's expectations during that time.

Is it correct to assume that, while the value of the bond you are holding goes down in the market, you get all of your money back at the maturity date in 2015? Therefore, if you hold to maturity and the company is still around, the back up in interest rates does not hurt your capital invested?

Thanks... let me know if that didn't make sense.

Q: Hi Peter:
In my on-RRSP portfolio, I have some money in XRE and some
Reits and the Canadian banks, BCE, and the pipelines

I still have some cash to be invested and I am looking for
a steady source of income (age around 60); for this purpose
someone give me a suggestion:
1) CPD a prefer ETF
2) XDV (it generates dividends)
3) a floating rate prefer ETF (I could not find the symbol)
4) BMO covered call utilities
5) BMO covered call banks ZWB

How would you compare to the above when I put the 5 investmensts in the
ETF XTR ? (it has bonds in it)

Thanks!

Q: Hi Peter:

I have been managing my own portfolio for over 30 years. It is now more than seven figures value. I am reaching a stage where the number of stocks and mutual funds are exceeding my capacity to monitor them. I tried several discretionary managers and to my disappointments none of them made me any decent return. The best of them had a total return of 7% over 4 years period. I am either selecting the wrong ones or had high expectations.

I have two thoughts, one is to migrate half my portfolio to your model portfolio and manage the other half myself. The other thought is to find a manager that can review my portfolio on a periodic basis and suggest changes “for a fee of course” but don’t know how to find them.

Any suggestions,

Thanks

Q: Hello all ... Interest rates are such a big factor in my retirement forecast. With the lowering of interest rates in Australia and comments by Mark Carney from the UK of rates not to go up till '15, are these countries indicators of when interest rates may increase here in Canada.

Thanks for your comments.

Q: I have a question about your rating system and apologize if the same question has been asked and answered recently (I'm a new member). If a company is rated A for example and has gone up substantially since you gave it this rating will the rating be downgraded eventually reflecting the higher valuation or does the rating only reflect your views on the quality of the company, it's management etc? Does the "A" rating mean that you feel it's not only a good company but is also trading at a good price? Thanks.

Q: Hello Gentlemen, please tell me what "5i Alpha" represents on your model portfolio summary.
Thanks
Dave

Q: Information eventually for the community.
I spent a lot of time (trying to) getting info on reported earnings, disregarding completely the actual official reporting against estimates which are themselves constantly revised to match the `Beat estimate requisite during the quarterly `Urbi et Orbi financial results Mass`.
This morning I found wwww.factset.com that seems to do a good job reporting the real results. If you go to the site, you will see that 2Q earnings are dismal, born(should I say levitated) once again by financials that are reducing quarter after quarter their reserves to maintain earning growth.
Anyway, if you think it is worth, please publish.
CDJ

Q: I hold stocks in my RRSP and non-registered, but recently opened a TFSA. I feel that managing stocks in 3 account is too complicated so would like to buy some ETFs that I can rebalance once per year in my TFSA. Do you have a suggestion for an ETF portfolio that includes a mix of large cap and small cap Canadian and U.S. ?

Thanks,
Carla

Q: Hello Peter and the 5i Team,

For a $21,000 RRSP, would you recommend only ETF's, and if so, which ones that would reflect the kind of holdings in the Model Portfolio?

Or alternatively, if trading costs through a discount broker are $10 per stock, and I wanted to purchase at least 15 names from the model portfolio, which 5 of the 20 names could I neglect? My thinking is that while some ETF purchases could be commission-free through Scotia iTrade, the on-going MER's of the ETFs would cut into the returns. In this scenario, the $150 trading costs don't seem excessive over time.

As usual, thanks for your thoughtful answers. Your service is first-rate!

Q: Your answer to Bill July 31 was to have 15 stocks for $25,000.00 At that rate it works out to $1,666.00 a stock. Is that so when your up you make alittle But when your stock gos down you don't lose a lot.I've only been playing the stocks about 6 months so everything is quite new to me. If I could show you what I own hopefully you could help with some changes. i'm hoping this is not to long of a question. I have DHX-$2.45x1000s. SYZ-$5.35x2000s DND-$4.25x750s CMI-$1.60x4000s AYA-$5.99x1000s CXS-$2.22x2000s Iput in $35,000.00 Should I be selling part of the shares off to get it to aprox. $1.666.00 a stock. I don't mind taking a bit of a chance. Thanks for all your help. Andy

Q: i am planing to switch my stocks to the model portfolio.some of them has exceptionally done well so far.few of them are in minus,do you still have faith in them also?.I BELIEVE THE ANSWER IS YES BUT double checking before i adjust for long term on tuesday.Your service has been greatest support to us.

Q: I'm taking your advise and spreading my investments over 20 stocks (5% of portfolio per stock). But, when I do the math I of course never come up with a nice even number of shares to buy like 100 shares. What should I do if say my 5% of my portfolio calculates to be 104 shares or 77 shares etc... Do I buy the exact number of shares as in the 104 or 77 or round them to the tens or hundreds as in 100 shares or 70 shares? Your advise would be appreciated.

Q: 2 kid RESP starting university in 2 & 4 years. How would you adjust this portfolio?
51% laddered bonds maturing at tuition dates in 2-7 years
7.1% ZWB
8.4% CGX
2.6% CSU
6.9% IPL
11.9% XRE
8.3% XTR
2.5% MG
we add $4k /year in monthly increments

Q: What market value of a canadian company is considered "small cap" compared to the US? What portion of an overall equity portfolio should be invested in canadian small caps?

Thanks
Ron

Q: First I would like you to know how much I appreciate the model portfolio that you added to your site. I follow it regularly and have gradually been adding companies to my own investment portfolio based on your model. My question has to do with investment/portfolio management. When a company is added to the model portfolio, are there any expectations as to how long a company will be held and what would cause you to sell a position? Thank you.

Q: Good morning! I would appreciate if you could clarify what a "position" is... 5% of portfolio, or $5,000 in one equity? Thx

Q: Are you at all concerned that many stocks in Canada that are popular right now (e.g. CSU, ESL, VRX, GIB.A, CGX, CMG) are way above their 200d mavg and have very high P/E's ? Although many are growing quite nicely are these stocks overbought in your opinion?
great service.

Q: Dear 5i Team
How do you view ACQ s latest acquisition ?
Also are 12 stocks a good number of stocks to have in a $25,000 portfolio . Can I add more or just add to existing stocks assuming they are all doing well ?
Thanks
Bill

Q: hi team,

Which sectors and asset classes perform the best when rates rise