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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: Hopefully not an odd question, but I hear and read comments and investors talking about short, medium and long term in reference to their holdings. In your opinion, could you define your thoughts on actual timelines for each? I realize this is subjective, I just want you thoughts on how you might define them.

Read Answer Asked by Philip on February 20, 2013

Q: i remember the saying water the flowers,pull the weeds. also the 6% rule of total amount investing per stock.does this mean still stay within the 6% rule.

Read Answer Asked by dale on February 19, 2013

Q: Hi Peter & Team:

I am trying to pay more attention to sector diversification rather than just stock diversification. Could you comment on and/or provide a resource to help in determining how best to achieve appropriate sector diversification ? How critical do you feel this is and what information or signals does one look for when, because of general market changes, there should be an adjustment ? How does sector diversification strategy change depending on whether your portfolio is for growth,or income or balanced ? Can you recommend a site that classifies Canadian and US stocks into industry standard sector descriptions ?
You mentioned that you are doing a 'model portfolio' - will this also incorporate what you consider to be the best current strategy for sector diversification and will you do updates of that as appropriate ?
Would it be possible to provide a 'sector sort' for the stocks that you comment on in your Report and Member Question sections ?
Thanks so much for a great stress-reducing practical and educational service !

Read Answer Asked by Alexandra on February 18, 2013

Q: Peter,

What should one do if you are fully invested and and you feel there is some sort of 5-10% correction on the horizon. Should one sell some positions or stay fully invested. If one sells some strong performers, at their 52 week highs, would that be a wrong move. What should be the srategy in such a situation.

Read Answer Asked by Imtiaz on February 12, 2013

Q: do you believe health sciences are a good investment, also what different types of stocks should be in ones portfolio to have a nice blend. your company is a godsend thankyou from the bottom of my heart and keep up the great work you are doing for common investors

Read Answer Asked by dale on February 11, 2013

Q: For investors holding significant amounts of cash, would you suggest dollar cost averaging back into the market or investing lump sums? Thank you.

Read Answer Asked by Mary jean on February 09, 2013

Q: https://www.5iresearch.ca/index.php?p=download&file=119
Peter are the ratings on your Jan PDF report redone for the report or the same as they were on the report date? If they are the same will you be redoing them in another pdf?
Also what is your strategy on being fully invested vs cash - do you try to time corrections or bear market downturns? what % cash do you like to keep?
Tks.

Read Answer Asked by George on February 06, 2013

Q: Hello 5i staff. I sure appreciate this fine service. I am a 61 year old aggressive investor. I have 10% of my portfolio in fixed income. At about $60k the fixed income portion is divided as follows. Sixty five percent in 5 high yield vehicles, FAP, TRH.UN, DYN9105, PHN280 and ATL908. Twenty five percent in corpoate bonds rated A and BBB, the rest in covertable debentures. With the prospect of rising interest rates should I sell any of the bond funds and switch into quality stocks? Thanks, Frank

Read Answer Asked by Frank on February 04, 2013

Q: Hi team, I have about 3.5% of our portfolio in CHB US high yield income fund and I am up a fair amount from my initial cost and have enjoyed over a years worth of interest income (inside an RRSP). I know there is a risks to this ETF if US interest rates rise, but that just doesn't seem likely for a while yet. I don't think I am overexposed in this area, what are your thoughts? Thanks, no rush on your answer if you are short staffed.

Read Answer Asked by Ray on January 29, 2013

Q: I was re-reading an article in the Canadian Money Saver by Wynn Quon. His analysis of a potential super bubble is certainly a scary prospect. I remember the 400 point losses on the TSE quite painfully.
What are your thoughts on this speculation? Have the problems that caused the turmoil on 2008 gone? Thanks

Read Answer Asked by Kim on January 29, 2013

Q: This is a follow-up to the answer to the "hold winners vs sell part of winners which are too large a percentage of your portfolio".

It is often hard to sell any part of something which is doing well and lookss to be doing more of the same in the future.


What I have done instead of selling to bring the percentage in line is to place a trailing stop on the amount which you would have to sell to bring the diversification back in line. Obviously trying to get the best of both worlds.

Would you have any comments on the validity of this strategy?

Read Answer Asked by Bryon on January 24, 2013

Q: Hi Peter and Team,
Thanks for a great first year of interesting and profitable investment advice. I will be renewing soon and look forward to the coming year of 5i reports.
My question concerns what seems to me to be contradictory advice having to do with portfolio rebalancing.
My approach is both capital gains and growing income for retirement. I have 20 stocks in my portfolio with what I consider to be good names such as STN, TRP, ALA, ESL, SYZ, AYA, BCE, etc. To me, some of my holdings are just getting rolling. If I sell back to 5% every time there is a rise in the share price it seems as if I am eroding my possibilities of future price and income gains (especially given the good prospects of dividend increases).
In a recent answer you said that an investor should not sell a good stock just because it is up. How do you reconcile these two assertions? Thanks again for the excellent service and have a great 2013. Rob

Read Answer Asked by Robert on January 23, 2013

Q: Peter...looking for $US exposure via exxon ge p&g mcd. Is a US$ trading acct. the best way and if so...are there tax and withholding issues? regards Art

Read Answer Asked by Art on January 20, 2013

Q: Hey Peter and Co.
I am thinking about getting into covered call writing on some of my dividend stocks. I'm reading up on the strategy mostly from Alan Ellman's Complete Encyclopedia For Covered Call Writing.
I really don't want the stocks I have to get called so I'm thinking about just writing out of the money calls to add income to my portfolio. What is your opinion on OTM covered call writing and covered calls in general?

Read Answer Asked by Andrew on January 16, 2013

Q: Peter; If you were trimming your pipeline holdings because they have become too high a % of the total where would you invest the proceeds keeping in mind income is a prime requirement? Thanks.

Rod

Read Answer Asked by Rodney on January 15, 2013

Q: Hi peter and team :
I am re balancing my portfolio by selling some of my loosers (Oil and gas stocks - painful) and considering to replace them with the below. I hope to go for safety and modest yearly total gain of 10% -12% The choices are from the list you provided :I own ATP,AW.UN,DH,NPI,CML, I am considering buying RPI.UN,HPL.UN,HR.UN,LIQ,EXE.
Your comments and suggestions would be appreciated. As always thanks for the great service
Yossi

Read Answer Asked by JOSEPH on January 14, 2013

Q: Hi Peter - I really like your website; enjoy reading the member questions and your answers - very informative.
After reading the blog about maintenance of portfolios, I have two questions.
With a portfolio of $100,000, would the ideal number of stocks still be 20? And with my ACQ (AutoCanada) and STN (Stantec) becoming a larger percentage - would you still trim these or let them run up a bit?
Thank you

Read Answer Asked by Heather on January 14, 2013

Q: Hi Peter,

Looking to put some funds in a contrarian sector with a timeline of ten years. Any recommendations about a particular sector that fits this criteria? Could you list a few recommendations in that particular sector ?

Thanks,

Arturo

Read Answer Asked by Arturo on January 12, 2013