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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: We hold 50% of our portfolio in your stocks from the balanced portfolio - 34% in your income portfolio and 16% in your growth portfolio. Although not all stocks from the three portfolios are in our final portfolio we have done this to have a large part of our income from dividends in cash accounts that when combined with CPP and OAS require only 2% return from the cyclic stocks to give us all the money needed to live the life we require. My question is would we be just as well represented with a complete investment in the balanced portfolio (we are only shy WEF, TECK, MX and MG) than having 35 stocks from the three portfolios. We were rewarded with a return last year only 2% less than the return of the balanced portfolio. I know this is an involved question but we respect your advise so much I felt that it was one we should ask....thanks you....Eugene
Read Answer Asked by gene on April 13, 2018
Q: Hi there,

I currently hold almost all of the names in the Balanced Equity Portfolio and would like to dip my toes into the Growth Portfolio. What are your currently top 5 ideas from the Growth Portfolio whose risk profile would be the most similar to the names held in the Balanced Equity Portfolio?

Thank you!
Read Answer Asked by Michael on April 02, 2018
Q: Good morning Peter, Ryan & Team,

I am looking at my international and american exposure. Can you give me a rough idea about what percentage of companies in the balanced portfolio have american and international exposure and how significant it is? Does that typically play to your portfolio country allocation? For example, I have 20% american equities, but X percentage of Canadian equities from the balanced portfolio get the majority of their revenue from the US, would you consider that a (20 + x) american exposure?

Thanks for your time,

Wes
Read Answer Asked by Wes on March 15, 2018
Q: Dear 5i:
Multipart Balanced Equity Portfolio question (please deduct credits as appropriate):
I have roughly $12000 to contribute to my RRSP (2018 contribution) right now, which four or five companies should I put this money in? Please exclude TECK, CSU, BNS, MX, PBH, and SIS in your response since I have full weights in these companies. I would much rather just add to positions to bring the weights of each position closer to 'equal weight', but this would involve averaging down (which 5i doesn't generally endorse). However, you have commented previously in the past that any company currently in the BE portfolio is 'buyable today'. So would averaging down be reasonable if one is only considering BE portfolio companies (for example, would be happy to average down on CLS/GUD if you think this is a reasonable move). I would far prefer to avoid individual security concentration risk by adding to other positions rather than trimming a winning position (regret trimming TOY, for example). Please provide your thoughts and guidance, and thanks as always.
Read Answer Asked by Walter on March 08, 2018
Q: Hi 5i Team

I’m using the 5i model portfolios for the 35% portion of my overall portfolio allocated to Canadian Equites. I’ve been investing in companies from both, the balanced and income portfolios, mostly because I’m having a hard time choosing which model portfolio is right for me. I like the dividends and income provided by one but also like the growth potential the balanced portfolio provides. I’m 50 years old and plan to retire in the next 3-5 years and would like to know if there is any criteria or guidance on what model portfolio to choose?

Thank you
Read Answer Asked by Luis on February 27, 2018
Q: I am new to 5i. I appreciate the candid views you offer your subscribers.

For those of us with smaller portfolios or those wishing to cap Canadian equity exposure to say 50% and unable add all 26 positions of your Balanced Equity portfolio what is your suggestion? I use ETS to gain USA/Int exposure and pick Canadian stocks for Canadian exposure.
Do you have a recommendation of say 12 positions for a TFSA with a 5 - 10 yr time horizon?
It is Canada so a couple obvious inclusions are a bank and insurance company followed by a myriad of sectors and companies?
Read Answer Asked by Glen on February 22, 2018
Q: Hello,

In regards to Jules’ comment I would agree with the open next day pricing, that way the stated returns are the same as investors. The reason I say this is because I view 5i as industry leaders in no conflict advising and transparency. I am always leary of stock picking firms who sell a stock, record the gains or losses at an advantage to regular investors. It inflates gains and makes losses appear less than they are.

I would say that taking the opening price into account would add to your credibility as different from the entire industry.

Having said this, returns are what get you more clients so I understand the need to perform.

I am okay with it either way, because you are so transparent, but I think it would add to your overall high credibility! Thanks for the amazing service you provide!
Read Answer Asked by Gerald on February 18, 2018
Q: I would strongly agree with Jules comments quoted below;
"5iResearch announces portfolio changes after markets close and uses the previous day closing prices in costing out portfolio changes. But members don’t have this luxury of selling or buying a stock at the closing price of the day before. They line up in queue and do their transaction at the start of the following market day. My suggestion is for 5i to be transparent and price all trades at the opening prices of the following day. That way there is a sense of alignment with what the stated portfolio returns are and what members can expect to get. "
Please accept this simple recommendation so your published rates of return are representative of what can be expected by the average investor. Otherwise add a statement to the effect your rates of return are calculated based on trades conducted after market close and as such do not reflect the rates of return achievable by the individual investor.

I've followed 5i almost from inception and am deeply indebted to them for holding many stocks that I wouldn't have otherwise purchased and many have returned well over 100% such as: CSU, CCL.B, SIS, KXS, AYA (now changed), ENGH. So I thank 5i for their service and only ask when they make changes to the portfolio they state changes are in effect at market open the following morning. Never mind what mutual funds and other do. Stick with the 5 i's.

Steve
Read Answer Asked by Steve on February 18, 2018
Q: Hi there, thanks for the updates on your portfolios! I mostly follow your Balanced Equity Portfolio with a few swap in towards growth (ie: KL, SHOP, PHO, PEO, COV, GSY, DOL etc) - in other words I dont' mind risk, but not on the extreme end of the risk spectrum. I like the names like PBH, KXS, SIS, TOY as well. That being said, If I wanted to buy 3 of 5 names that were added to the BE and Growth Portfolios, which would be best suitable for me: RHT, WEF, TCK.B, VB, LIQ

Thanks so much!
Read Answer Asked by Michael on February 16, 2018
Q: I am in the process of building the Balanced and Growth portfolios, and I would like to take advantage of the recent pullback. I had been waiting for a correction to buy SHOP, but I notice that not only did it not decline much, but that it has recovered extremely quickly. I was under the impression it would be very volatile. Apparently not.
Anyway, could you please help me order in terms of priority to buy the top three or so securities that I don't currently have in the two portfolios:
Balanced: CAE, Celestica, Altus, Parkland, Sun Life, Stella, Sylogist
Growth: Dollarama, Covalon, Photon, Shop, IWO
In terms of best in the sense that they were unfairly punished and therefore have the most potential going forward?
Thanks for always great insight.
Read Answer Asked by Gordon on February 13, 2018
Q: If one was currently setting up a diversified portfolio including the following classifications - real estate, financial, health, technology, materials, utilities, energy, consumer discretionary, consumer staples, industrials and telecom - and wanted one core investment in each classification (either a specific larger established company or an ETF where there is no such company in Canada (such as tech and health)) what companies/ETFs would you suggest by classification. Thank you for your exemplary work and suggestions over the last few years.Mike
Mike
Read Answer Asked by Michael on February 12, 2018
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