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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 Peter and team,

I am considering how to allocate the US and International equity component of my portfolio. I will be using ETF's solely held in my RRSP account which will comprise roughly 40% of my total portfolio, growing to about 45% with new deposits over time. Currently I am using Canadian-based ETF's (XUU, VGG, XMC for US and XEF and VEE for International) but I am looking at using US-based ETF's, with the idea of both reducing costs (lower MER and avoiding withholding taxes on dividends) as well as introducing some currency exposure.

In a response to an earlier question today, you indicated: "Our one comment is that the suggested ETFs might result in US dollar exposure somewhere close to 50% of the portfolio. This might make sense depending on individual needs, but 50% exposure to the US dollar might be a bit high for a lot of investors. " which has led to some follow-up questions:
In general, what would you consider to be an appropriate range for non-CDN exposure? More specifically, what factors might an investor consider in one's own situation to hep decide where in this range is personally-appropriate or whether it makes sense to exceed the suggested range?
I hadn't considered currency risk very closely, so the other member's question was quite timely and I look forward to your response. I have found 5i to be such an invaluable resource, providing so much opportunity for learning about the world of investing.

Thanks in advance,
Rory
Read Answer Asked by Rory on August 09, 2019
Q: I would just like to make a comment. There is a serious potential for a pestilence to come to the Niagra wine country. It is called the Spotted Lantern Fly and has been destroying vineyards in Pennsylvania and has been sighted in New York State. It may have been a bit of an overreaction but I decided to move on from ADW.A.
Read Answer Asked by David on August 09, 2019
Q: I would like your take, if possible, on the recent Globe interview (https://www.theglobeandmail.com/business/article-star-ceo-of-stella-jones-looks-back-as-he-moves-forward/) Brian McManus, the outgoing CEO of SJ gave on the future of the company. He spoke of the company having a long runway but my take was he went on to state that of the three main areas that they are in - railway ties, poles and treated lumber - only poles really seemed to have much growth. They control the market in ties but that sector isn't growing and he felt expanding lumber into the US seems a bit of a crapshoot (my words).

Are you able to comment on where you see the growth prospects for the company? It would seem to me that they will have to branch out into new areas and while they have a seasoned, long-serving team in place expansion into new avenues is not risk-free. I have been a long-time holder of SJ stock and while I am not concerned with the share price plummeting, I am wondering if there is any growth left. Or do we give the remaining team (and the soon to be named incoming CEO) the benefit of the doubt for now?

Appreciate your insight.

Paul F.
Read Answer Asked by Paul on August 09, 2019
Q: I am a little perplexed on the answer to Gervais on WEF and NFI. You say that with valuation changing but fundamentals still good that one can still make money from NEW valuations. How can one make money on New valuations if one already owns the stock down 50 percent? It needs to double just to break even. One could average down and buy more but we are being taught not to average down on a losing stock.
For example I am in on WEF AT $2.67 a share. It is now hovering around $1.25. So with the NEW valuation, it is great for someone who does not own WEF but how about someone who does own it. Just collect the dividend and wait for new cycle, average down the cost or sell? What would you do? Timeframe three more years.
Read Answer Asked by Helen on August 09, 2019
Q: MCHI Vs FXI
What's your opinion regarding potential return in 3-5 years.
Read Answer Asked by Rajendra on August 09, 2019
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