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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 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
Q: It's my understanding that the yields on Greek, Spanish and Irish debt are currently trading at very thin spreads to US teasuries. My instinct is that this represents an overall high level of risk complanency in the markets in general and that we are likely due for some weakness ahead as things normalize. I'd love to hear your thoughts on this.

Thanks,
Read Answer Asked by Scott on May 16, 2014
Q: Hi Peter, Can you explain the difference averaging down vs. averaging in? For explain I bought 500 shares of AVO at $27 a few weeks ago and I bought 250 more shares at $21 on the initial dip. Was this a bad strategy?

Averaging down didn't work out too well for investors in Nortel or Blackberry.
Read Answer Asked by David on May 13, 2014
Q: Hi:
In iffy markets like this , I usually grab some profit and duck for cover ... even when I react OK I never get back in the market soon enough ...
This time I am taking the daily blows and am staying put ...
Are there stocks I should be looking at as best buying opportunities or sectors to which I should focus ???
Your site has helped me immensely . Thankyou .
Read Answer Asked by Thomas on May 07, 2014
Q: Hi,
I currently only have cash and Canadian stocks in my portfolio, the cash accounts for roughly 40% of my portfolio, but I am looking to invest into some EFT's, mutual funds and US stocks as well. can you please advise me roughly what weightings i should be giving to EFT's, mutual funds and US stocks under the assumption that my Canadian stocks are relatively diversified. And also which EFTs, mutual funds and US stocks would you recommend as of today? I am in my mid 20's and have a relatively long term horizon. Thanks in advance.
Read Answer Asked by chris on May 06, 2014
Q: What sector weightings would you recommend for a conservative middle age investor, with a balanced focus on capital gains and dividends. Thanks
Read Answer Asked by paul on May 05, 2014
Q: What is your opinion of market neutral hedge funds as an alternative to bonds in a rising interest environment? Is such a product available through ETF's and, if so, what would you recommend or, if not, what is available to the retail investor in this area? As always, many thanks for your valuable insight.
Read Answer Asked by Paul W on May 05, 2014
Q: Hello 5i,
In my childrens RESP, I have AVO, CBO, CDZ, CF, DH, DHX, HCG, IWO,SGY, SJ, SLF, WCP, XGD and ZWB. IWO is about 30% because it is the only US stock but this is down about 7.5% , I do have a 6 year time frame, my thoughts are I will wait until IWO goes back up (hopefully it will) after that I will trim its level to about 5% weightage. Otherwise I am slightly overweight on CBO and SLF which I am quite comfotable with. I put in about $400 every month towards my 2 kids RESP. I am slowly trying to add stocks to match your model portfolio/income portfolio. Please advice whether I should trim add something. Your advice has been great and I hope you continue doing this for many more years to come. Thanks. Shyam
Read Answer Asked by Shyam on May 05, 2014
Q: Hi.How low a stock should go down before you should sell i(10%,20%,30% )even if the company looks to be a good company (e.g..AVO,or AYA ) ?.Thanks.ebrahim
Read Answer Asked by ebrahim on May 01, 2014
Q: Tech stock have really fallen off a cliff. Is there still a bull market for them left?
Read Answer Asked by Eugene on May 01, 2014
Q: Does it make any sense to buy 5 year GIC's as part of a balanced portfolio given that interests rates are at all time lows and rates are forecast to rise over this time frame? Thanks. Michael
Read Answer Asked by Michael on April 30, 2014
Q: Hi Gang, I was hoping to find a site that gives clear, easily readable, information indicating which sectors of the market are seeing the biggest influx of money and, more importantly, which companies lead the way.
Thanks
Kyle
Read Answer Asked by Kyle on April 28, 2014
Q: Hi team, just wondering about demographics and what sectors you feel will benefit longterm and what new trends might emerge. Thanks
Read Answer Asked by Seamus on April 25, 2014
Q: For someone retired, age 60, no debt, no pension other than Gov't, and capital of 1.5 million, what would be your recommended asset allocation between cash, bonds, stocks etc and which, if any, of your recommended portfolios (or both as the case may be) would be appropriate in the equation. Thanks as always.
Read Answer Asked by Bruce on April 24, 2014
Q: Good Morning Peter -- and all the 5 I team as well!

I have a general question about how "not" to time the market, and how to exercise the better part of wisdom if one is interested in growth over present dividend yield.

For instance, ... if one holds a fairly decent company, but its sector happens to be out of favour at this time, and hence the stock price is flat lining, or even reversing, would it make sense to pull out that money and re-deploy it into other sectors that are favourable and ride another sector wave for a time -- or is it better to stand and hold, through good times and bad.

It seems counter-intuitive to me to watch dollars erode while other sectors revive and feeling helpless not to participate because cash is already tied up. I see the logic of a long term hold, in one sense, if someone has many years to spend in the investment market. But, in a shorter term context, for instance two years or less, is there any proven statistic that says you're better off standing your ground?

In one general example, as I watch profits erode from the Tech sector while the Energy sector takes fire, is there any point in holding on to tech companies that are flat lining?

In general, I think I know what your answer would be in terms of overall investment strategies. And yet, I still wonder, what your strategy would be as a portfolio manager. Would you hold, through thick and thin, or would you re-assess and re-allocate as each sector takes favour especially given a shorter term horizon?

As ever, I appreciate your thoughts and opinions, as they have guided me very well through thick and thin. Even before the days of signing up to this newsletter, which is coming up to my 6-month anniversary with 5I, I garnered great wisdom and opportunities through watching you on BNN -- ACQ being only one of many opportunities that you led me to! I always listen closely to what you say. Thanks.



Read Answer Asked by Sylvia on April 22, 2014
Q: If we get a 10 percent or more correction in the coming months would bond etfs or high yield bond etfs be a place to hide. Thanks.
Read Answer Asked by Ray on April 16, 2014
Q: Do you disagree with David Stanley's " cautious" comment in a recent CMS?
"I could cautiously conclude that initial yield is of greater significance to a Canadian buy-and-hold investor than dividend growth. Of course, this statement has its limits." I ask because of a comment you make about preferring growth in dividends to height(so to speak).
Because I am a retiree, I tend to favour higher dividends because I don't have growth time, and because at this stage in my life I want to spend, rather than reinvest, them. Is this an OK approach? I'm aware that one needs to be wary of very high dividends.
Read Answer Asked by M.S. on April 15, 2014
Q: Peter and Team
I totally revamped this TFSA in January according to your group' sure commendations, but did hold back on what is now 7% cash, of the portfolio and am ready to invest that.. I currently hold 17% in REITS, 13% in BCE , 13 in ZWB, 11% in BAD, the remainder , evenly spread, in CDZ, XIU and XCS.
What would you recommend that would provide substantial growth prospects and would it make sense to add a Canadian company with good foreign exposure?
In other accounts I own SGY, SYZ, SLF,, AVO, and ESL.
Thanks for your consideration. I have been pleased with the January changes made to this TFSA.
Ruth Ann
Read Answer Asked by Ruth Ann on April 14, 2014
Q: As for diversifying equities where you have an RRSP, TFSA and stocks "outside": is the diversifying done over the total equity component or in each of the containment areas?
Thank you.
Read Answer Asked by PAUL on April 14, 2014
Q: At some point I would like to buy a vanguard canada etf that gives me US market exposure. VFV is the S+P index unhedged and VSP is the S+P index CAD hedged. Can you give me a simple answer as to when it makes more sense to buy hedged rather than unhedged? For example, if I think the canadian dollar is going back to par, which do i buy. If it stays at it's current level, which do I buy and why.
Thanks
Read Answer Asked by deirdre on April 08, 2014