Investment Q&A

Q: hi. where would you invest to have globale exposure. ETF OR other.

Q: Peter, I am considering selling a portion of my RY which has been reasonably strong ( I will keep enough RY that it will be 3% of my portfolio. I also have TD and BNS, each at the same 3% ). I would invest the proceeds evenly over a basket including UNS, SCL, BAU, FTT, ACD, BDT, BEK.b, NAL, LIQ, RBA, FRC.........looking for small and mid-cap value, with some of them paying a dividend. Would appreciate your opinion. Many thanks, Barry.

Q: hllo peter, just a general question.... I have quite a bit of cash to spend... should I wait until after the summer, as in general markets go down.... or should I spend it now on a down day.... what would you buy for dividends as part of a core holding, and is this the time to buy them?

Q: I'm concerned about the volatility of the TSX; up 144 yesterday, down 167 today at 11.15 pst. In this environment, how can anyone invest for the long term with any confidence? We have 600G in stocks, and another 10% in cash. I was thinking of adding to some positions, but would I be better keeping the cash in the bank? Or is it just 'sell in May and go away'? Until when?

Q: Thank you for your response to my proposed summer switch: That being said, there is a chance that the US market will continue to outperform Canada, so that would be the main consideration in this switch. Also, switching now and re-balancing in six months does sound a bit like timing the market and the Canadian-US differences, which generally is ill-advised.You will be shifting towards interest-rate sensitive names also."

My motivation has four components:
1) to cut back on my daily trading, for the summer;
2) a view that the US president is committed to hurting the fossil fuel business, without regard to economic cost;
3) my expectation that Congress and the President will remain at loggerheads up to the 2015 congressional elections, leaving a leaderless Western World and related poor recovery of Western economies, including Canada's - big time; and
4) my hope that there will be a major boom as Aapl, Goog, Mcsft in time for a yesr-end spurt in consumer spending on Technology toys.

Given this background, maybe I should forget about my re-balancing to Canadian names and just hunker down for a lac lustre year on the SP500? Any comments?

Q: I see that David Rosenberg is starting to see signs that inflation will start to come alive in the coming months. If we subscribe to this opinion, can you think of a few of your A and B rated stocks that would be worth accumulating to prepare for such an eventuality. Thanks; love your service.

Q: Dear 5IResearch,

Having experienced some unprofitable results for the past few summers, I am now going to re-balance my portfolio, away from its total reliance on US equities, to include some Canadian names and then to weld it shut until October.

Currently my portfolio is 42% Berkeley Hathaway (BRK.B), 15% Wall Street bank (GS), 15% High-end US housing (PHM & DHI), 7% US Railroad (CSX), 7% Technology (GOOG or MSFT, but not AAPL) and 8-10% Cdn hedged index on SP500 (XSP)

I propose to reduce investment in GS, CSX, Technology and SP500, in favour of some good Canadian names.

My short list for these is:

Northland Power (NPI),
Agrium (AGU) or Potash (POT),
Pembina Pipelined (PPL) or Inter pipeline (IPL.UN),
Gold bullion (CEF.A),
and a western Canadian Reit (to be selected)

In the Fall, I expect to go back to a broad perspective of the entire North American economy, at large, hoping that Obama stops stalling the pipeline, by then. The asset allocation will likely be adjusted, to cope with the October 2013 - A.pril 2014 period.

Can you please comment on my proposed purchases of Canadian stocks? Danger signs would be appreciated.

Have a good summer.

Q: Hi Peter, some stocks have weathered the current downturn well and have generally held their ground. I'm wondering if these are buy candidates because of their current strength. Perhaps they are just a safe haven for now, and could lose value when the correction is over and the money goes to the beat-up stocks. Some examples are MSI, GEI, FCR, TRI, BNP, MG etc. What do you think? Thanks Tim......

Q: How does one get a report on the following stocks:
BBD.B
ZRE
AQN
XHY
IFC
AIF

What should be the number of stocks held in each account eg.
RRSP, RESP, TFSA, Investment Account.

Thanks

JRM

Q: I am 80 and we need to booster our US Social Security to a livable income, but my wife, just 65, also needs growth to keep up with inflation. We are both Canadian/US citizens and US dividends can be hit by 20% as a result. In a rif, 2 tfsas and our joint portfolio, we have over $500G invested in about 30 Cdn stocks; 5 major banks, 4 pipelines, oil (HSE,CPG, BTE,CVE), REITS (rei,ax,cwt,d), power (aqn,bep,ema,fts) and tel (bce,t,mbt), plus some pot,tck,mg,enf,pwf, etc. I just sold a bond and now have about $140Gs to invest, so would like some advice. I'm intested in CSX in the US as I think we need to be in a railroad, but should I just add the rest of the money to our present stocks? I know this is a tough one but we need income and, at least, to keep up with inlation for my wife.
. , .

Q: I have moved all my investment accounts (TFSA, RRSP, Cash, etc) to one online brokerage. I did so for convenience in trading and accessing the account. However, it occurred to me the other day that I am perhaps unwittingly taking on unnecessary risk. I never take delivery of actual shares. What is my exposure if that online brokerage goes under? Thanks.

Q: Hi Peter, I have not been able to follow the market for a bit but have seen the decline. Is this a correction, are we going down much more or are there other factors driving the market lower. Thanks, Nick

Q: My TFSA doesn't have enough cash yet to diversify. I decided to use a broad index ETF to diversify 75% of the account and to specify a single stock for the remaining 25%.

I feel that an investor has a moral responsibility to buy specific stocks based on merit and not just indexes. As the portfolio grows I'll be able to diversify later and add a variety of specific stocks.

I just joined 5I reseach this evening and I've got 75% invested in a ETF covering the Canadian market as a whole (VCE - FTSE Canada Index) with the remaining 25% invested in Blackberry (BB). I plan to select from your "A" stocks in small and midcap companies to replace Blackberry if it becomes overvalued.

I can afford to lose the money in my TFSA but hope to build a TFSA that can withstand rough waves. Is this a reasonable plan and how should I go about selecting from your lists to replace Blackberry when the time comes? Should I replace it with one of your picks now?

Thanks for being there to help - I look forward to your answer - Doug

Q: Peter - concerning the model portfolio I have quite a bit of personal hesitation entering into some of the names due to valuation. I am ok holding high PE (or P/CF or P/B or low PEG) stocks but the valuations on some of the portfolio seem stretched when compared to their historical average and max valuations. Specifically, K-Bro or many of the other industrials or business services stocks in the portfolio seem like they are stretched which then causes me caution. Of course, depending on where we are in the business cycle if earnings or cash flow are accelerating they may be cheap. Also, the sector usually plays a bigger part of total security capital gains than individual stock selection so maybe they are in the right sectors. I understand all of that but then I still pause and want to go for a stock trading within a historical range. Any advice for someone like me?

Q: Peter - as people enter into the individual issues in the model portfolio (or a reasonable chunk of one) for Canadian holdings do you consider using a stop-loss to limit downside after a position is entered into? Thanks!

Q: I am trying to develop a check list of ratios or analysis essential for a do it your self investor to consider before investing. Could you provide some direction in this respect. Thanks.

Q: Hi Peter, can you give us some insight on the use of stops. I was stopped out on a couple of stocks latley that I planned to keep. How tight do you keep them? Do you use them? How to determine where to set them especially for income stocks? Tks

Q: thank you for your reply to mine re the model, as I start accumulating into the model, can you suggest which 5 stocks are least likely to a pull back in a market sell off assuming a spring market pull back i.e. the sell in May scenario

thanks again, cy

Q: Re the model portfolio, do you plan to incorporate on your site a live update of the model's performance or YTD monthly reports.
I already own several of 5i reported companies and wondering how to accumulating the model. The 5i "B rated and higher" companies not in the model that I own, should I consider these as adding "higher returns at a higher risk" or would you recommend selling these and putting the funds towards the model
Your views are much appreciated.

cheers, cy

Q: Hi Peter,

If a company makes an all time high does it merit an investment.
I bought kbl and wpk on those grounds coupled with your fundamentals and its working nice for me. It would also be nice to know when to book profits.

Thanks
Paul