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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: I have emulated the Balanced Equity portfolio as much as possible but the proportions don't max exactly. PBH and KXS are not yet at the 6% level (close) so I did not re-balance. Trust this in line with your thinking.

BTW...April numbers in my three trading accounts are: +1.54, +3.1 and +2.14. And my TFSA, begun in January, 2015, is almost doubled. Thanks for your genius. I tend to think of all three accounts as a single portfolio but iTrade can't combine them.
Read Answer Asked by Fred on May 03, 2017
Q: Could you give a list of 5i's portfolio holdings that you consider provides a significant (partial) substitute for direct U.S. or International investment choices, along with a rough percentage of how much of each holding you feel would qualify for our "non-Canadian" portion ? Many thanks.
Read Answer Asked by Alexandra on May 01, 2017
Q: You have often stated that 20 equity holdings is about perfect and over that there is no real benefit to “over-diversification” and it actually moves a portfolio closer to just replicating an index. I like to follow your BE portfolio, but when you add on my US holdings, ETFs for international diversification, emerging markets, bonds, preferreds etc my portfolio (7 figures) is left with 58 different individual holdings /ETFs. I would like to cut it down a bit. My question is this: Your BE portfolio started with 20 names and has now grown to 25. Are there any plans to reduce the number of holdings back down to 20 in the near future?
Read Answer Asked by Steven on April 21, 2017
Q: Hi There,

I want to begin deploying funds towards the balanced portfolio. Can you please tell me which 5 names you would add today, based on the current price of the individual stocks. I know it's not a great strategy to try and time the market, but I plan on adding 5 at a time over the next couple months, and figure there may be 5 that I'm better off starting with.

Thanks!
Read Answer Asked by Jamie on April 19, 2017
Q: Good day...I am lucky enough to have a fairly large portfolio that is 70% in your balanced portfolio and 10% in various growth and income stocks you have in the other two portfolios. I also have 20% of my portfolio in u.s. stocks. My question is whether or not I should have any emerging market exposure or are the companies in your three portfolios have enough already. I look forward to your thoughts on this...
Read Answer Asked by gene on April 18, 2017
Q: I am planning to own all stocks in growth, income and model portfolio excluding ETF.
I would allocated Growth = 1%, Income = 1.75% and Model = 2.25%
Do you think this is the good strategy and it will work going forward?
Total stocks = 59.

I set up dummy portfolio since Nov 2016 and it has the gain of 11%.

Currently, I own all stocks in Model portfolio with 3% waiting and it has gain 6%

My portfolio is over 500K

Thanks for the great service.
Read Answer Asked by Hector on April 11, 2017
Q: Hi there, I am an investor in my early 30's and follow your Balanced Equity portfolio and understand that it is an excellent mix of growth and stability names. I am curious to know what adjustments you would make if I were looking to substitute the more stable, less risky names with names with higher growth torque - names similar to KXS, NFI, PBH, SIS etc (so maybe not as small and volatile as some names in the Growth portfolio). Thanks for your awesome service!
Read Answer Asked by Michael on April 11, 2017
Q: In the last few months I have been rebuilding my "taxable" portfolio modeled on your balanced portfolio with the addition of some growth names. I am happy with my overall balance of equities and am now going to change my TFSA from an ETF to stocks. What are your top five picks from your balanced portfolio at this time. Similarly the top five picks from your growth portfolio. I realize you often hate questions like this but I do find your answers interesting. Thanks you for your excellent service!
Read Answer Asked by Paul on April 03, 2017
Q: Hello there,

Recently I had asked about your top 2 favourite growth ideas outside of your Balanced Equity Portfolio/Shopify and GUD and GSY were suggested along with OTEX (however you had mentioned this might give too much weighting towards technology). I presume GSY would still be one of your favourite ideas - but what would replace GUD as your second favourite idea, now that GUD is part of the BE Portfolio (which I have purchased along with CLS on Friday). Thanks so much!
Read Answer Asked by Michael on April 03, 2017
Q: Hi, I am new to the 5i community and also investing, I've been buying stocks for over a year now but am unsure of what exactly I am doing asides from following previous trends. I would like to follow one of your portfolios but am curious as to how I keep it balanced while adding cash bi-weekly and if trying to keep up with your positions recommended in the portfolio. Without paying tons on commission. Any tips?

Thanks
Read Answer Asked by Anthony on March 31, 2017
Q: Hi there,

I follow the BE portfolio fairly closely and will be adding positions in CLS and GUD shortly. I can purchase them in either an RRSP or a cash account as my TFSA is already maxed out with growth names in them. Would the two names be better held in an RRSP or in a cash account for optimal tax efficiencies?

Thanks for your great services!
Read Answer Asked by Michael on March 31, 2017
Q: I would like to make a substantial new investment based on your balanced portfolio with funds transferred recently into my LIRA account from another institution. Instead of buying everything now would you be able to group them into "acquire now" and "can wait" or similar buckets? You can also suggest new names.

Thank you for your most valuable service that I just renewed. Peter
Read Answer Asked by Peter on March 12, 2017
Q: This is a question I sent in last week, and the answer:

Question:
I am new to 5i, and investing based on the Balanced Equity Portfolio. Some of the companies in the portfolio have B and even C ratings. Why are they here if A ratings are the best? It seems to me I should get the best performance if I only invest in the A rated companies in the portfolio. Or am I wrong?

Answer:
We needed to add other companies for diversification and balance within the portfolio. Also, there are not enough A rated companies to really provide proper diversification. One other point: a company could be rated C but still provide significant upside if the valuation is low enough to start with.

I'm looking for more details on this matter. If the response uses up several of my "question credits", that is OK.

Having started a little over a month ago, I have only bought into about six companies so far, all from the Balanced Equity Portfolio. This represents a very small portion of my total investments.

Below you indicate that B and C rated stocks are added for diversification and balance. At the moment, those factors are not important to me because I get diversification and balance elsewhere. What I'm trying to do is maximise my potential return with 5i.

According to the 5i Research Ratings, it would seem that an A stock is likely to have a higher return, with lower risk, than a B stock. So if I don't need diversification, then it would seem that over time the A stocks will outperform the B stocks. Or am I wrong?

Have you done any analysis of the performance of A stocks versus B stocks? What were the results?

As someone just starting with 5i, it would be useful to know the date you "opened" a position in the Portfolio. Is that information available?

How often do you update/reconfirm the stocks in the portfolio. For example, WCP has declined 32%. Is it likely to be dropped from the Portfolio or is it a better buying opportunity then before? On the other hand, CSU has increased over 400% and is still rated an A. With a great rating and momentum on its side, is CSU a screaming buy or is it overvalued and at risk of a decline?

Do you ever put on a "hold"? For example, I am interested in TOY, but the stock has recently had a substantial price increase. Is it still a buy, or should I wait for a pull back?
Read Answer Asked by Jack on March 08, 2017
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