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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Can you please explain something to me? Why, at least based on what I read in the newspaper, when the economy shows signs of deteriorating putting off risk of an interest rate rise the market goes up. When things look better for the economy and there is talk of raising rates the market goes down. Wouldn’t most legitimate business do better in a better economy? So shouldn’t it really be the other way around? Why are stocks thought to do better in low interest rate environment? And is it true that they do?
Read Answer Asked by David on September 16, 2016
Q: In my RRSP, 28% of my portfolio is in U.S. stocks. I am getting concerned about the US election, and what it might do to the markets, in the short term, as well as the overall U.S. economy in 2017/18. With the Cdn dollar being down around $.76, would it be advisable to take that down closer to 15%, instead of the 28%, for a while?
Also, I presently have 25% in cash, and want to put half of that into something low risk,but better return than cash, for up to 2 years. Would ETFs with a stable history, be a good place to put the cash,and if so, can you recommend a couple? Or another idea, instead of ETFs...
The remaining 47% of the portfolio is in the Cdn market, and some Emerging Market ETFs.
Thank you
Grant
Read Answer Asked by Grant on September 16, 2016
Q: I am holding TIP in the US as inflation protection, however I am having doubts regarding this strategy. For real return type bond ETFs, an increase in the relevant CPI increases income, yet rising inflation will be met with rising interest rates on nominal bonds that will drive the price of inflation-protected bonds down as well, negating the benefit of the increased income on a total return basis. It would seem to me that real return bonds are only protection from a central bank that has lost control over inflation; orderly inflation not so much. Is this an accurate assessment?
Read Answer Asked by Benjamin on September 14, 2016
Q: Good Morning: A two part question about CBO. First, what is the difference between CBO and CBO.A, and is one preferable to the other for retail investors? Second, and more importantly, I notice that the stated yield (on my BMO Investorline fact sheet) for CBO is currently 3.3%. In your opinion, would an increase in interest rates in the US be likely to affect this rate in a significantly negative fashion?
Read Answer Asked by Donald on September 14, 2016
Q: I am putting together a portfolio called "Big Dogs"
I broke out the 10 largest stocks by market cap in each of the 10 sectors
I will invest in 3 of those stocks in each sector for a total of 30 stocks.Determining which 3 has been a challenge,looking at the usual--
dividends--eps--p/e-- market cap etc.Also have a bias toward your favourites.
Since I am only looking at the top 10 do you think I will be overlooking some better opportunities?I think perhaps, but I would go
crazy trying to look at the whole sector or even the top 20.I feel my odds of success are better sticking with the "Big Dogs"
Over all I will put 10k in each stock but not until I see a market
pull back which I feel is imminent.Perhaps I could have your thoughts on that as well.
This is not something new---What do you think of my idea and approach?
Read Answer Asked by peter on September 12, 2016
Q: I have a $300,000 lump sum to invest for a little more than 10 years before there will be a need to start to taking income. What would you suggest is a reasonable time frame over which to make the purchases? I was considering equal purchases over a 3 month time frame (as opposed to a doing it all right away) but with the US presidential elections, all the talk of interest rate increases and tax loss selling I am wondering if three months is too quick.

Appreciate your insight.

Paul F.
Read Answer Asked by Paul on September 12, 2016
Q: Given the churning FED wordage and today's market reaction what are your thoughts on a September or October mini market correction? I'm looking for a decent entry point as I have a few nice picks researched and lined up. I currently am sitting on 35% cash position (mixed USD & CDN 60/40) awaiting opportunity of a market correction.

Cheers!
Read Answer Asked by Duane on September 12, 2016
Q: Hello 5i team,

Not sure why my question does not reach you as I've tried twice in the past 2 weeks.......hope it gets through to you in this 3rd attempt.

I am 61 years old and about 16% of my overall portfolio is in bonds. The rest is in income stocks and growth stocks similar to 5i portfolio. The yield return of fixed income instruments is so low currently and I am rather comfortable owning income stocks. Now, I have $60,000 in cash in RRSP and I have the following options. Please comment on each option and your preference and recommendations.
1. To buy several corporate bonds with maturity of 3 to 5 years and to hold till maturity.
2. To buy more income stocks like AW.UN or EIF.un
3. To buy ETF of inflation bonds
4. To buy ETF of high yield bonds
5. To buy ETF of US corporate bonds

Please advise preferred ETF for option 3, 4 and 5.
Many thanks.
Read Answer Asked by Willie on August 17, 2016
Q: Can I have your opinion on this ETF. It has the best 1/3/5yr returns when compared to others in the Canadian Dividend and Income universe. For example it has outperformed CDZ by almost 3% annualized over the past 5 years. What has contributed to this over achievement and is there any reason why it won't continue to do so over the next 5 years?
Thank-you.
Read Answer Asked by Albert on August 16, 2016
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