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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: Hi everyone,
On last nights market call Michael Smedley stated that stocks are going nowhere and are gaining one day but giving it all back and more the next. Even the good ones don't seem to be making any ground. He went on to say he feels this is now a bear market and other fund managers know this but are not admitting to it. What is your take on this and if we are in this malaise it could go on a lot longer than we expect ?

Many thanks for a great service

Peter
Read Answer Asked by Peter on August 06, 2015
Q: Hi
I am looking into getting into the stock market. I have invested in stocks in the past but currently don't hold any stocks. I'm 25 years old, have a long term horizon and a medium high risk tolerance,
I have about 10K to start investing with and am looking for the best way to diversify and also get into the stock market again. I hold GICs already.
I was thinking about starting off with the stocks in the balanced portfolio and from there (as i am able to save some more money) pick a few other key names,
What is your opinion of this idea, do you think if I start with those stocks in the balanced portfolio at the current prices is that a good start?
Thanks
Chris
Read Answer Asked by chris on August 06, 2015
Q: Hi guys.

Lets say I initially buy a 4% position in company xyz. Over the course a few months that position gets whittled down to 3% due to either share price decline or due to the rest of of the portfolio performing well while xyz does nothing.

For portfolio rebalancing purposes, would you consider that xyz position to be either now 3% of the portfolio, because that's what it represents currently, or would you consider that xyz position to be a 4% weighting because that's what it was when you initially made the purchase.

If you like the company, is there anything wrong with buying more (with existing cash in the portfolio) to bump up the weighting closer to that initial 4%, or do you say "my initial position was 4%, I'll wait till xyz's share price performance catches up to the rest of the portfolio?

I'm using "xyz" as a theoretical example because I'd like to know what the general rule is, or does it really depend upon the stock, MacDonald Dettwiler for example.

Thanks a bunch.
Read Answer Asked by john on August 05, 2015
Q: Hello Peter!
Can you please comment on my portfolio.I currently hold in my portfolio (stocks - Weightings): CSU-11.2%,CCL.B- 13%,BYD.UN-10%,DHX.b-10.8%,ATD.b-15.5%,AYA-5.6%,ESL-7.6%,SJ-9.8%,CXI-5.9%,MG7.9%
,BOS-2.7%,TDG.US-3.5%,NOC.US-1.5%,CBM.US-1.8%,AGN.US-1.8% .

I also have 18K CAD to invest. Would you please give me your 3(non energy)buys today to complement my existing portfolio.
Thanks Andrew B.
Read Answer Asked by Andrzej on August 05, 2015
Q: Further to Paul's MISC question; What is the best way to rebalance? A simple calendar approach? If so how often? At one extreme, one could rebalance daily, but incur heavy transaction fees and possibly sell one's winners way too early.

At the other extreme, one could rebalance annually, or some longer period. Transaction fees would be minimised. But this approach might miss cycle tops (and bottoms).

If a calendar approach is not used, then how is discipline maintained?
Read Answer Asked by Douglas on July 28, 2015
Q: What is your opinion on using Stop-Loss orders? Should investors use them and if so, what is a good percentage to use?
Read Answer Asked by Eugene on July 27, 2015
Q: Hello 5i team,
I am responding to your answe to Les concerning the amount of fixed income appropriate for a 70 year old. I think it would help many of us to have your rationale for your suggestions.

For instance, you suggest 40 per cent fixed income, even though they have enough to live on from their pensions and could thus presumably ride out a down turn. In this low interest rate environment many suggest a nuch lower per centage. You have yourself, i believe from time to time.
Should not the pension be considered a form of fixed income and thus count towards the per centage?

You also recommend xbb, which goes out to seven years. I imagine we are mainly thinking about preserving the capital. And if that is the case, why not choose the shorter term, xsb instead?
Thanks for any insight you can put on this important aspect of investing for many of us
Claire
Read Answer Asked by joseph on July 22, 2015
Q: What 3 sectors would you avoid in an increasing interest rate environment? Which 3 sectors would perform best in an increasing interest rate environment?
Read Answer Asked by Robert on July 21, 2015
Q: Hello Peter & Co,
My RRIF portfolio in entirely denominated in Cdn$. In order to invest in US stocks, the wise thing would have been to convert a portion of the portfolio to US$ when both currencies were at par; but I did not.
To convert now would cost me some 30% in exchange rate; I would not mind that if our loonie would remain at current levels. But that would be an irresponsible assumption because, even though there could be some additional downside in the short term, our currency would eventually move up (say by 10-15%).
So, the return from the US investments would have to be reduced accordingly.
But I am generating for the past 6 years a 17% compound return per annum from my Canadian holdings (when 7% pa would have been sufficient to meet my "wants"). The math here does not seem compelling to me with a hurdle of 17+(10 to 15)%.
So, unless I'm missing something, is this all worth the hassle?
Thanks,
Antoine

Read Answer Asked by Antoine on July 16, 2015
Q: I want to be in cash and prefer being in USD. I vaguely remember that in one of 5i's portfolios held DLR. DLR has pretty low daily volumes and it also has a high management fee as well (0.45%) for just holding cash. Do you know of any other investment vehicle to park my CDN cash in USD without actually making a FX exchange?
Read Answer Asked by Eugene on July 15, 2015
Q: Hi Peter and 5i team, what will happen if Chinese Yuan is included into the IMF reserve currency on Oct 20, 2015 meeting? Its effect on us dollar, canadian dollar , commodities and canadian stock market?
Read Answer Asked by victor on July 14, 2015
Q: Bill Gross recently recommended shorting ASHR @ $54. He was dead on. He also said the Chinese stock market crash will trigger a global crisis. How good is his track record and do you agree. Should we head for the hills? Thank you.

Francis Woo
Read Answer Asked by Francis on July 08, 2015
Q: Good Morning 5i,

With all the publicity going around about a possible recession in Canada, what would be the investment strategy during a recession period?

Thanks

Paul
Read Answer Asked by Paul on July 08, 2015
Q: Is an investor better off the instruct the on-line broker to re-invest dividend into more shares or to allow the cash to build in the account to presumably be invested eventually?
Read Answer Asked by Fred on July 07, 2015
Q: Hi Peter

I have had exceptional success in buying positions in all 3 portfolios and to date have almost a full complement.

In the growth portfolio the following stocks got away from me, didn't seem to correct and therefore I don't yet hold. They are. GIX,PEO,CDV, and QHR.

I'm not asking you predict the future, so let me put it this way.... If you were in this position would you say to hell with it and buy at market open today or would you exercise patience as I have done to date and simply put in a bid and leave it there.

You opinions might vary per stock mentioned.

Thanks
Read Answer Asked by Sheldon on June 23, 2015
Q: From time to time I run across a small cap that looks interesting. What fundamental and/or technical metrics do you use to evaluate a small cap? Can an individual access any/all of these?
Regards, Charles
Read Answer Asked by Charles on June 22, 2015
Q: IF A GREXIT COMES ABOUT I THINK THERE COULD BE SOME SHORT TERM BUYING AND SELLING OPPORTUNITIES AS WELL AS ON OPPORTUNITY TO REBALANCE YOUR PORTFOLIO IF YOU HAVE SOME CASH. I WOULD APPRECIATE IT IF YOU COULD LET ME KNOW YOUR THOUGHTS ON WHAT WILL HAPPEN TO INVSESTMENTS IN THE FOLLOWING AREA IMMEDIATELY AFTER GREXIT HAPPENS (I KNOW THIS DATE IS OBVIOUSLY A PERSONAL DECISSION):
GOLD
CANADIAN MID-CAP COMPANIES
CANADIAN SMALL CAP COMPANIES
TECHNOLOGY COMPANIES
FINANCIAL INSTITUTIONS
THANKS FOR ALL YOUR GREAT ADVICE IN THE PAST.
MIKE
Read Answer Asked by Michael on June 17, 2015
Q: What would be your advice to your members with respect to a possible GREXIT before the end of this month if the Greeks do not pay monies owed to the IMF??
Do you see a catastrophic collapse of the Canadian stock markets as was the case in 2008 with the bancruptcy of Lehman Brothers?
Would you advise your members to sell ??
Read Answer Asked by Terry on June 16, 2015
Q: I'm 37 years old and I have very little exposure to bonds. I would like to start building a position in Cdn Corporate and Government bonds in my RRSP. Do you suggest buying a little every month in a few ETFs, such as CBO, CLF and XHY or should I wait until interest rates rise and then start a position since the price will likely decline further? Is it smart to start a position if general wisdom dictates the price will fall in the future?

Thanks,
Jason
Read Answer Asked by Jason on June 09, 2015