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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: Hello,

I have invested in your stock portfolio (thank you) plus I added CAM and EFN (5% each similar with the others in the portfolio).
I have around 150k more to invest. Do yo suggest adding to the existing portfolio or adding new ones?

I was thinking about SGY, AVO, CXI, EH, CFN, WCP are they worth an entry point at their current prices or I should hold and hope for a dip? Do you have any other suggestions? I'm looking for growth, my biggest challenge is knowing when to sell.
BTW this is a non registered account.

Thank you for all your good work and patience
Marios
Read Answer Asked by Marios on June 19, 2014
Q: Dear 5i team. I have a question about transferring funds from my Margin account into my TFSA. Every year we are allowed to add $5500 to the TFSA. I did this in January of this year, but instead of depositing cash I transferred stocks. I transferred $2131 dollars of STN at a 28% profit as well as $2664 of WEF at a 40% profit for a total of $4795 transferred into my TFSA (the rest in cash). In the transfer process from my Margin to TFSA do I pay tax on the profits for these stocks? When I got my questrade trading summary last year it stated CONTRIB for the type/ price when I did this transfer. To me it seems that the stocks were "sold" at the market price that day and then they were transferred into the TFSA. Is my thinking correct? Or can you explain to me better the tax responsibilities when doing this type of transfer to maximize returns? Thanks so much.
Read Answer Asked by Jeremy on June 17, 2014
Q: My no-so-smart advisor (whom I'm leaving) got me to buy $115K worth of US stocks for my Can. open/non-registered account. (At the time, I didn't know any better.)The $115K is 30% of my open account. In addition, he sold me about $30K of US stocks for my RSP; the balance being Can. stocks. This is the opposite of what should be. Can. stocks belong in the open account, to be able to take advantage of the dividend tax credit. Some of the US stocks are "keepers"; good companies I'd like to continue to own, such as AT&T, Pepsico, GE, etc. The question is what to do now? Just sell and buy Can. stocks for the open account, and US stocks for the RSP?
Read Answer Asked by Helen on June 16, 2014
Q: Exceptional service. I am 61 and through your advice trying to become more of an investor instead of a trader. Could I have your opinion on my stock portfolio which are all in either in a RRSP or TFSA. I will have a small company pension at 65 and I do hold some GIC's.
Thanks

1.Consumer Cyclical – 11%
CGX – 4%
NFI – 5%
RPI.UN – 2%
2.Energy – 19%
CPG – 5%
IPL – 3%
SGY – 4%
WCP – 7%
3.ETF (Bond)
ZHY – 4%
4.Finance
BNS - 9%
5.Industrials – 14%
E – 4%
NAL – 5%
WSP – 5%
6.Materials – 8%
CHE.UN – 4%
WEF – 4%
7.Real estate REIT – 5%
BPY.UN – 3%
HLP.UN – 2%
8.Technology – 10%
DH – 4%
DSG – 2%
ESL – 4%
9.Telecom
BCE - 5%
10.Utilities – 11%
BEP.UN – 5%
ENF – 6%
Read Answer Asked by Roy on June 16, 2014
Q: First of all, I want to thank the entire team for their services. I think you are all doing a great job and I appreciate the advice 5i provides.
My question is related to when to sell an investment. I've watched the YouTube video that indicates investors should sell an investment when there is:
1) Negative changes to company of industry
2) Over-promising & under-delivering by management
3) Declining revenues
4) Changes in competition
5) High debt

I know people shouldn't sell when a stock has gone up, but how do we know when a stock is overextended / expensive? Is there a metric you use to determine a good exit point, or do you just stick with your 5 reasons? Thanks!
Read Answer Asked by Mike on June 13, 2014
Q: Hi 5i Team,

You have stated in the past that in your ideal world, stocks would be classified with 15 sectors (itemized below). Over the past year, you have suggested target sector weights that a model portfolio should aim for. I am doing some mid year rebalancing / new capital deployment with my portfolio and hoping you can fill in your updated target sector weights for the next 6-12 months based on what you see in the economy.

Capital Goods / Industrials =
Consumer Cyclical =
Consumer Staples =
Energy =
Financials =
Health Care (CDN) =
Health Care (US) =
Information Technology =
Internet / Software =
Materials (Gold / Silver) =
Materials (Metals) =
Real Estate =
Retail =
Telecommunication Services =
Transportation =
Utilities =
TOTAL = 100%

(Risk Profile = 8 out of 10 with long time horizon, current portfolio consists of 45% small cap, 25% mid cap & 30% large cap)

Thank You.
Read Answer Asked by Ray on June 12, 2014
Q: Peter, given the seasonal "sell in May" scenario, even though it seems irrelevant this year, combined with the extremely high TSX near record levels, would it not be prudent to wait till the summer to rebalance or increase current holdings, even in growth names like DHX, SJ, ACQ, AVO, AYA, BAD, SGY and WCP. Or are today's prices ok for a 3 year hold. Thanks as usual
Dave
Read Answer Asked by David on June 12, 2014
Q: When asked to recommend 4 growth stocks on June 9th you suggested AVO,ACQ,BAD,and AYA. When asked a similar question today you suggest DHX,SJ,and WSP. Please explain why you would recommend completely different 'growth stocks' to the same query within a two day period? Otherwise when scanning the Q/A column for my own guidance I find this inconsistency confusing rather than helpful.
Thanks
Read Answer Asked by Peter on June 11, 2014
Q: I have a $100,000 GIC coming due and do not plan to renew it. I plan to put $90,000 of it into the market. I like stocks with some growth combined with a decent dividend. I already have a well diversified portfolio. Would you please suggest some stocks that you would currently recommend.
Thanks for your great service.
Read Answer Asked by Ray on June 11, 2014
Q: Should the internals of the market start deteriorating (preferably before then), what could DIY investors do, to protect their portfolios, aside from correct/smart asset allocation? Would buying inverse ETFS help and if so, could you recommend any for the TSX and S&P? Or if there is a better way, hope you share with us. (I am a survivor of the 2008-2009 crisis before being a DIY, thus the apprehension)

Because of this market experience, the quality of your unparalleled service is really appreciated. I have never seen such a deal. I marvel about what you do on a daily basis. I hope you company is there for the long haul.
Read Answer Asked by Rosario on June 11, 2014
Q: As an avid market follower I value your comments on the market. Knowing that market timing is virtually impossible, what would your favorite indicator(s) be that we have reached the "euphoric" apex? Thanks for the great service! Ron
Read Answer Asked by Ronald on June 09, 2014
Q: With markets at all time highs Is this a good time to look at taking some profits and moving to bonds such as ishares 1-5 laddered Bond ETF or a DEX ST Corp Universe ETF?
Read Answer Asked by Kevin on June 07, 2014
Q: What is your opinion about about VIX( volatility index ?). Is it worth investing money on this stock for future gain. ? It has been very low for a while and something is going happen sooner or later.Thanks. Ebrahimk
Read Answer Asked by ebrahim on May 29, 2014
Q: Hi Peter,

My condo is for sale; Any thoughts on where/how to invest the proceeds in the most tax efficient way? Right now I have a decent income. Should I still be in dividend paying stocks/etfs? Are growth stocks too risky at this point? Thanks for any ideas!
Read Answer Asked by Boyd on May 27, 2014
Q: Greetings: I have read countless articles and books on asset allocation, most of which have a different twist on AA. What is your expert opinion on AA? What % equity,fixed income, and cash and also what do you consider fixed income? Some consider REITs and prefs fixed and some consider only bonds,GICs fixed. Considering the current environment which way would you "tilt" the portfolio and by how much? Thanks Ron
Read Answer Asked by Ronald on May 27, 2014
Q: Peter, thank you for all the sound advice you offer to us. we keep hearing that what goes up must go down. I remember back in 2004 people saying bank stocks were a no brainer as they kept going up although we were starting to see some segments of the economy ie car indusdry showing signs of weakness. However the stock market continued in a positive trend for another few years. Should we be concerned at this junture or continue to have faieth in the capital markets? Would you consider this to be a hold period and buy on weakness or sell on strength so you have cash for a future downturn. I realize you do not have a crystal ball and no one can time the market but there are trends I am sure you have seen.thank you again for the service you offer.
m
Read Answer Asked by Maggie on May 23, 2014
Q: What are your thoughts about the Canadian dollar vs the US dollar?
Read Answer Asked by Fred on May 22, 2014
Q: Hi Peter: My husband and I who are both in our mid 70's have sold our house and so have a lump sum to invest. We are retired so looking at fairly conservative investing. We are considering investing in ETF's and would appreciate your guidance as to the percentage diversification between Equity ETF's, Bond ETF's and cash equivalents. Thanks Judy
Read Answer Asked by judy on May 21, 2014
Q: Hello Peter and Co,
In my opinion, stock prices have gone up in the last few years because economic prospects were improving; by bringing more liquidity in the system, quantitative easing has greatly contributed to the rise in stock values.
QE will fade away soon (in the fall? early next year? don't know for sure; when that happens,it would stand to reason that stock values would correct. How does one prepare for such an eventuality? I could raise some cash, say 20-30%. For your info:
my long term objective was to get a growth rate of 7% pa; however, my portfolio has gone up by 14.6% pa in the last 3½ years whereas the benchmark has gone up by only 5.4% pa in that same period.
I value your opinion.
Thanks
Tony
Read Answer Asked by Antoine on May 18, 2014
Q: Hi Team : a general question on takeovers using PFE as an example. Is it fair to assume the buyer's stock price will weaken while the buyout rises? Assuming the buyer (PFE) has to raise equity/debt and the price of the target keeps rising,PFE share price will likely stagnate/fall during this process?
Read Answer Asked by Scott on May 16, 2014