Investment Q&A

Q: Hi 5i Team
I am sitting at 14% Energy with BDI, PEY,VET and QST and 13% Basic Materials with G, SJ,and RUS.. I have approx 5 to 10K to invest and would like your advice as to whether I should take advantage of lower energy and Materials stock prices i.e. Whitecap WCP and First Quantum FM or into recent top picks Trimac TMA and EXco XTC. I do not have any Transportation nor Auto related stocks currently.
Regards
Kathy

Q: I understand and accept the importance of a properly constructed portfolio. However, I have a lot of trouble deciding on how to set up the energy portion of my holdings - mainly because there are so many different yet excellent choices.

If assuming you want a 15% portion of the portfolio to go into energy, how does one decide to split this among light oil, heavy oil, tar sands, natural gas, service companies, drillers, explorers juniors, seniors, dividend payers etc.? All the while, keeping your total portfolio down to 20 - 25 names?

Is it just a matter of picking 3 or 4 from any of those in the sector and going with them or is there not as much correlation among the types of companies listed above as I think?

Thanks for helping to shed light on this area.

Paul F.

Q: Hello, can you indicate which three sectors you feel will benefit the most from lower oil prices and why? I am thinking of placing my free capital in the ones you are recommending as I don't see oil prices rising anytime soon. Thank you.

» S&P/TSX Capped Composite Index
» S&P/TSX 60 Capped Index
» S&P/TSX Capped Consumer Discretionary Index
» S&P/TSX Capped Consumer Staples Index
» S&P/TSX Capped Diversified Metals & Mining Index
» S&P/TSX Capped Energy Index
» S&P/TSX Capped Financial Index
» S&P/TSX Capped Health Care Index
» S&P/TSX Capped Industrials Index
» S&P/TSX Capped Information Technology Index
» S&P/TSX Capped Materials Index
» S&P/TSX Capped Real Estate Index
» S&P/TSX Capped Telecommunication Services Index
» S&P/TSX Capped Utilities Index
» S&P/TSX Capped REIT Index

Q: Hi team:
I owned the above and my US exposure is relatively low as most of my equity is in the Canadian market
I would like to add the above as I have some cash
Would you say that it is safe to put 1/3 of my money in and wait for another 2 months to add another 1/ to see how the market would be ?
I am holding it for 3-5 years period, thanks Team!

Q: Hello Peter
The recent stock prices decline has given me an idea to open new portfolio "an exceptionally concentrated portfolio" that I found idea in your 5i Research Blog from July 20,2014.
Please give to me your 5 best at this time candidates for this type of portfolio that one can double down on them.
Thanks Andrew B.

Q: What caused stagflation in the 1970's? Do you think we are at risk of stagflation again?

Thanks,
Hans

Q: Thankyou for reassuring all of us in these troubled waters. I have quite a bit of cash to introduce back into markets. Is the 3 days of positive market action a good indicator this down turn may be over? I know you don't have a crystal ball but how do we deploy a substantial amount of dollars back in to the prescribed portfolios?

Q: Which Canadian companies should profit from 20% lower oil prices? Companies that use vehicles? Airlines, waste management, truck delivery, construction companies? How about CN and CP? Those might actually loose since oil production should decrease (less shipping)?

Q: Advice please on weathering this first time correction or worse for a rookie DYI investor (not my day job.)

I appreciate your calming replies about the fundamentals of the economy and the companies you comment on.

I have made only a total of 6 or 7 buys this calendar year and 1 good buy GWO offsets a few poorly timed purchases HSE, TA, SGY AND WCP

IN TOTAL IF I SOLD IT ALL, I would break even today, bearing in mind this is all together only 5 to 10 % of portfolio, would you suggest

getting rid of it all and waiting 30 days (by the way if I sold for a loss today when is the 30 day limit for claiming a capital loss? )

OR waiting things out because my selections above are fundamentally sound and I have a long time horizon (> 10 yrs )

thank you for the support !

Q: I have read with interest how many of the comments during this downturn refer to selling positions now. It is very important for investors to realize and remember, that it is during these downturns that the "smart money" begins to buy, not sell; perhaps not today, but soon. A 10% correction will take the TSX to around 13150, the DOW to 15600 and the S&P to 1800 and that is when there will be bargains to be had. Don't sell during these times; re balance your equities and fixed income and get your cash back in...just a thought :)

Q: Carl Icahn shorts S & P 500. He has taken these measures to protect his stock portfolio. He says the correction is going to get worse. Do you think your 5i followers should hedge their portfolio and, if so, what products would we use? It is nice that I can get this info. from 5i. The people I know wouldn't be able to provide me with this information. Dennis

Q: long term investor catching my breath

anything other than market conditions to be concerned about here after a very big drop?

Thanks for all you do

Gord

Q: Are global growth concerns significant enough to derail this market. Should we sit tight or lighten up. Thanks.

Q: In comparing my portfolio to your suggested weightings a couple of sectors need to be rebalanced.

The areas where I have the least exposure are:
1. Consumer Disc/ Staples (Total 15%) vs my PF at 5% assuming I have categorized the stocks properly. Current holdings are DHX, AW.un,CGX and ACQ. What would you add to flush out this sector?
2. Telcos (10%) vs my PF at 2%. I do hold T and BCE. Should I just add to these or do have additonal suggestions?

The adjustments will be done over a period of time as much of the new buys will be funded by selling energy stocks where I am sitting at a 21% weighting - even with pullback in this sector. (Another argument for diversification. I thought I was so smart earlier this year with a heavy energy weighting. Live and learn!)

Thanks yet again for you help.

Q: Please advise the % weightings of the various sectors in the TSE 300 & the S&P 500 and your current recommended % weighting in the various sectors of The TSE 300.
Thank you

Q: Hi , Do you think were heading for a Bear market and if so when do you think will be in one , the other day I read that we are currently in the eight inning of the Bull market how long will this last before the bear arrives.

Thanks

Q: The following have shown little change in the current correction. Is this the type of correction wherein the sellers will get around to worrying about these stocks/sectors, or does it look principally oriented to the energy sectors. Thanks
BPF.UN, VNR, ET.

Q: Hello 5i. There was an interesting article in Monday's Globe & Mail about retirement investing strategies. Intent is to help retirees protect their capital, given that their ability to recover from a major market crash could be more difficult due to more limited time horizons.

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/two-ways-to-game-plan-for-retirement/article20937727/#dashboard/follows/

Would appreciate your thoughts on the article, and the two ways to approach stock market investing it describes.

As always, thanks for your advice.

Q: Hi Team,
I am getting very tempted to buy some stocks that have sold off(pembina, td bank etc...). I keep telling myself to be patient and wait for some evidence of buying however, there seems to be some good opportunities to at least start a position or add to an existing one.

Seeing this great clip from Warren Buffett is also influencing my decision (clip #4) http://thereformedbroker.com/2014/10/02/warren-buffetts-tv-appearance-october-2nd-2014/.
I am normally against averaging down, but I have noted that it can work well with GOOD QUALITY companies in case the correction still has legs. Anyways, could you and the team recommend how you handle the correction and give 2 names from each sector that look attractive for a long term investor.
Thanks again guys

Q: My cousin has never invested in the stock market. She has 100k and is thinking to invest in a portfolio of 20-30 different stocks now. Her time frame is 15-20 years. Understanding you don't have a crystal ball, what do you think of the timing?