Investment Q&A

Q: I manage the investment accounts for a family member who currently has a very small pension, CPP and OAS with the OAS Supplement. Her Supplement is reduced by 50 cents for every dollar of investment income she makes so she is effectively in a 50% tax bracket. Her capital comes from the recent sale of her house and the money must be available for an assisted living facility in a few years. My problem has been finding stocks to preserve capital and minimize the 50% tax bite which impacts what she has to live on currently. I have used AV.UN which has no impact on her income now and TMC which does but provides a high income. I think capital gains would be better than dividends which are grossed up. Any suggestions for appropriate investments for a 6 figure account?

Q: Peter and team:

If/when Ms. Yellen decides to increase US Rates what do you feel the impact will be on higher dividend payers such as utilities and riets.

What would be the recommended vehicle for parking funds for the next two years to safely preserve capital while earning some modest return.

Deduct two as you see fit.

Thank you as always

Phil

Q: Hi 5i, how would you be approaching the Brexit vote from a portfolio perspective? I have a few names that are very exposed to the GBP/USD exchange rate (i.e. CXR, IT and ESL). Should I be taking some off the table prior to this vote or is it too late and most of the fear is baked in to current prices? In your opinion what direction do you see the GBP going if there is indeed a Brexit? I've heard arguments both ways on long and short term. Thanks again.

Q: Given today's market and the expectation of a US rate hike, could you identify 5 ETF's that you would be comfortable with to provide safety of principal and income. Thanks.

Q: I am thinking about parking some cash in one or both of these ETF's (perhaps a 50/50 split) for the next 12 months. I understand that rate increases could adversely impact the unit price but given that rates are not expected to increase in Canada anytime soon and these are Canadian corporate bond funds not American would there be any impact from a US rate hike? If so, why? Secondly, what do you think of the downside risk and is there a better option you would suggest.
Thank you

Q: This ETF in your Income P/F has been pretty flat since 5i started it, I think in 2014, and do you think it will remain a long term hold? How much of a hit would you expect it to take with a quarter point rise in the Fed rate and what is its duration? Thanks, J.

Q: Hi again,
Sorry the symbol I was asking about is HEU. I've copied the question again below.

Hi 5i, I think over the next 3-5 years oil is going to rally up. In doing some reading I found this etf. The management fee is definitely higher than I like. I'm not exactly sure how the 200% correlation works but it sounds like if energy goes up it would be a good thing. Could you give your opinion on this fund, also could you give some better options for getting some more energy in my portfolio if you know of some. Thanks!

Q: Hi 5i'ers,
is it time for XEG and what do you think of their prospects going forward as oil seems to be on the mend or is this a dead cat bounce?

Q: Sorry my previous question referred to ZBK.US it should have been ZBK.
Thanks
Mike

Q: I read with interest your recent article in the Post and was intrigued by the comment that research shows 90% of portfolio returns come from sector allocation - if a person wanted to take advantage of that, in a simple, easy to manage and inexpensive way (ignoring taxes for the moment) what would be your view be on an approach where one's equity component of their portfolio consisted entirely of a number of ETF's with each one of the ETF's focused on a particular sector, with a periodic (say quarterly) rebalancing? What specific ETF's would you suggest for such a portfolio? Thank you.

Q: Hello Team,
In one of Peter's recent articles he indicated that sector selection was more important than the choice of specific stocks within the sector.
Could you advise which sectors you suggest would have the greatest momentum over the next year or two.
And, if you want to throw in a couple of sector gems I won't complain.
As always, really appreciate your help.

Q: I understand that some individual reits are considered 'fully valued' on a P/E basis - based on historical 'norms'

question: looking at ZRE can you provide a 'rough' calc on the overall P/E with an eye to whether you feel it is at, near or over its traditional long term valuation range

or, more importantly, based on metrics you (5I) would use, what is your currently concern about reit valuations?

thank you in advance

Q: Hello Peter and Team, What are thoughts about this ETF for a 3 year hold ? Thank you.

Q: Interest rate anxiety seems to be sweeping the markets again. Refresh my memory about what sectors are likely to be hurt worst in this silliness. I would have thought reits, utilities and telcom but it was consumer staples that got hammered today while the telcos did fine.

Q: What public companies/stocks are/will be a play onBlockchain?

Q: how would you invest in the future of the electric battery industry? would it be in a manufacturer or a miner? and can you suggest a company.
Thank you for all your thoughtful and considered work

Q: What do you think of XSB as a short term hold, six months or less? Bonds generally do well, relatively, in the summer.

Q: Hi,
Thanks for the tip of TMXMONEY to identify the sectors. It turns out I had miss-classified 3 of my stocks (SJ, IPL and ECI). I'm now questioning my weightings. I currently have the following:

Cons. Cyclical 11.9%
Cons. Defensive 0.0%
Financials 17.1%
Healthcare 3.6%
Energy 14.7%
Precious Metals 13.9%
Real Estate 0.0%
Industrials 9.2%
Utilities 0.0%
Technology 24.5%
Materials 4.6%
Communication 0.0%

I'm ok with some risk, which is probably evident from above. My precious metals may be a little high due to the recent bounce in this sector.

Based on the current market environment, do you see these weighting as appropriate? Are there any particular red flags that you see?

Thanks, Ian

Q: What do think about comparing the current dividend yield to the historical yield of a stock as a way of assessing its value as an investment? i.e., if the current yield is greater than the historic yield (the average yield over the past five or ten years), than the stock would be a "buy" (notwithstanding other factors) or a better value than companies in the same peer group with yields lower than the historical average yield.

Q: For international exposure, I have some ZDM in my portfolio but should I be worried enough about BREXIT to dump it?