Investment Q&A

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?

Q: Hello 5i,
If I was to put $100k into the BE portfolio today would you suggest mirroring the current allocations or buying equal amounts of each stock?
Thanks
Dave

Q: Hi 5i Team,

This is a general question on your balanced model portfolio. After making some significant gains in the oil sector over the past couple years, I'm entirely in cash now and looking to establish a safer portfolio for the longer term (I'm 41). I see that you set March 31st as the start date for the portfolio, does this mean that you will select a new set of stocks at this point based on the best value available, or does the list remain the same. I'm not rushing in to anything at the moment, so would be willing to wait until March 31st if you reevaluate at that point. I'm new to your service and find all the information extremely helpful.

Thanks!

Q: When will the portfolios for January be posted? Thank you

Q: I am interested in building a portfolio based on the Balanced portfolio, Dec 2106. It currently consists of 23 holdings, not including cash. Of the total portfolio 7 holdings are NR which I presume is "no report". I believe you add these with the following comment:
“The portfolio contains some stocks that 5i Research® does not currently cover. We needed to add these names to increase the average market capitalization of the portfolio, and to add sector balance. We are very comfortable with the companies we have chosen, and will cover the 7 companies in due course.”
My question then is what are the metrics that you have initially applied to reach a comfort level such that these are included prior to a report being completed?

Q: i could not find this on the questions section so i will ask you. Could you provide me with the companies in the balanced portfolio as to the sector you put them in i.e. bns financial etc...i tend to think that you rate some of the companies diffrent than RBC does....thankyou

Q: Do you have month to month return stats since the inception of the Balanced (and all?) portfolio?
Thanks!

Q: just joined today. want to follow your balanced equity portfolio thinking 20 stocks at 5%. you have more than 20 in the model which ones do I not invest in. As well can you recommend an etf with foreign content (probably us) to complete my portfolio. T steve

Q: Hi there, as part of the new year, I have rebalanced my portfolio with all names in the BE Portfolio with equal weighting. By reading through other's Q&A's and I've broken it down into the following accounts:

UNREG: BNS, SLF, WSP, T, PKI, CGX, ENB
TFSA: CSU, SIS, PBH, KXS, NFI, CXI, TOY, SYZ
RRSP: ATD.B, CCL.B, SJ, WCP, MX, AEM, MG, ENGH

I believe I read you are considering moving a name or two from the growth portfolio over to the BE Portfolio so I have a little bit of cash in my TFSA to make that purchase when the time comes. Based on my breakdown, are there any names you would swap around for maximum portfolio returns?

Thanks so much for your help and for everything your company does!

Q: What BE companies would you add to at today's prices? Long term hold. Thanks!

Q: Further to Greg's question re the Balanced Portfolio, would you go ahead and buy the full positions today or stagger the purchases?

Q: I am setting up a portfolio based on your model balanced portfolio. Would you still buy all the same companies today or are there some you would change?
Thanks

Q: 1) I am in the process of making a few changes in my portfolios and was wondering if you expect to be making any adjustments in the 5i portfolios in the next month or so ?

2) Is 5i still doing portfolio reviews ?

Thanks to the whole team for an outstanding service !

Q: Do you plan to invest your 4.6% cash in the Balanced Portfolio soon?

Q: Hi there, thank you for a great year of service! In the new year I will be rebalancing my portfolio, shifting positions to 4% in each of the Balanced Equity names. This will leave me with 8% left in cash and room for 2 names to make a 25 name portfolio. Which 2 names would you add for balance and growth? I am in my early 30's and have a long term outlook. Thanks again!

Q: for a young person with their own RRSP and LIRA would be best to use the balanced portfolio or should they add some growth stocks as well?

Thanks
D

Q: Hi Guys, I currently hold all the Balanced Equity Portfolio stocks in my TFSA with approximately the same weightings, which represents my ~20% Canadian equity exposure. How would you recommend investing the addition $5,500 in January? (Would bolster up a couple of holdings be reasonable, if so which ones, or hold it in cash until there is other activity in the portfolio?)

Thank you for such a great performing portfolio!

Q: Hello 5i Team,
I've been building a portfolio matching the Balanced Equity Portfolio.
So far I invested in all recommended companies with the exception of
CSU, ENGH, CCL.B, KXS, CXI, T and WCP. Out of these 7, which 2 would you
recommend to invest on right now based on price and diversification?
Please recommend half or full position. Thanks.

Q: Hello 5i. I am starting to build the Balanced Equity Portfolio. I own BNS, SIS, TOY, ATD and CSU. What other 5 stocks in the BE portfolio would be good buys right now? Any stocks "on sale"? Thanks.

Q: Hi 5i Team,

I am planning to setup the Balanced Equity Portfolio across two different investment accounts. One investment account will have 12 stocks, and the other 13. How would you recommend I split the Balanced Equity Portfolio to have a somewhat equal sector allocation in both accounts?

Thank you.

Francesco.