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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 don't usually like market timing and don't really believe in this "sell in may..." stuff, but this year is a little different. What are your thoughts if the Trump administration is unable to come up with a concrete tax reform plan by may/june? Would they have time given congress goes into break shortly after? I would expect there would be volatility ahead, but have you experienced similar events like this in the past where there's been bets on policy changes that don't materialize?

Read Answer Asked by dan on April 13, 2017
Q: April 11/17 ? asked by Terry re large block
trading:
'Dark pools' are private networks which do not have to report trades to the consolidated volume till after completion. In the US, Goldman Sachs, Barclays, Citibank and others have them and apparently account for as much as 40% of the volume. What is the situation re 'dark pools' in Canada? Also, what is the situation with TSE trades reported as 'anonymous' broker?
Read Answer Asked by Russ on April 13, 2017
Q: Hi,

I contribute monthly to my family's RESP, but as the value of the family plan grew I've started to question what happens with the money if they don't go to school.

Turns out both myself and the gov't get our capital back (no taxes) plus the earnings on the investment (taxable), plus 20% tax (the gov'ts share, I suppose).

My concern is that I'm prioritizing my RESP contribution over my TFSA contribution (thus not maxing out my TFSA). In your opinion, should I be prioritizing TFSA contribution over RESP?
Read Answer Asked by Cameron on April 13, 2017
Q: Hi,

We have a HELOC with a rate at 2.70%. We are planning to invest a portion of it ($100,000) using the smith manoeuvre strategy. Just want to ask your recommendation on 5 solid dividend yielding stocks that can give a good return and can benefit using this strategy. Any member in this group using this strategy?

Your thoughts and comments would be greatly appreciated.

Thank you very much.
Read Answer Asked by sunday on April 12, 2017
Q: Under the heading miscellaneous there are questions about a particular stock but the stock's name does not appear. On April 7th the following question was asked “Q: Our financial advisor has exposure to other countries with this mutual fund (3%). This is in my RRSP. Your thoughts please.” Your answer refers to the stock but never mentions its name. Could you please explain why that is. Thanks.
Read Answer Asked by cal on April 11, 2017
Q: Hi 5I, I need some clarification on time horizons and when to switch out and/or sell a company. If one says that they are holding long what time frame are we looking at? Sometimes I hear 3 to 5 years, other times 5 to 10 years. But in all of your portfolios what is the design factor? If one is long term investor and a stock has gone up 40%+ why would you need to sell it if the time horizon has not been completed? Timing has not done well for me. So I know that re balancing a portfolio means not going over a certain weighting per stock or sector for safety but what are you usually looking at to get out of a stock. Sometimes you say you are comfortable in people getting into a stock for long term but then you might turn around and move it out of the portfolio. So should I follow a multi-year hold, or follow the portfolio with the recommended in's and out's as you try to make the model better. Thanks for your advice.
Read Answer Asked by Ben on April 11, 2017
Q: Peter, as a former portfolio manager, how do you buy large volumes of shares? Would you execute the order yourself or would you have a team to do this? My personal portfolio is over 8 digits so I always question myself on how to execute positions. I currently only buy companies greater than $400 million and always calculate the average daily volume multiplied by the current price to see if my trade will change the market. I take a current price and discount it by an educated guess % and enter the whole trade in and let it sit and the market move into my buy. This way I am not bidding up the stock. The bank has offered block trades, but I am not in control. In your experience what is the best way to enter and/or exit a large position?
Read Answer Asked by Terry 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: Hi,

I’m 67 years old and rely on dividend income. I think it may be time to transform my 45 stock portfolio into something more in tune with my age and risk tolerance. It would hopefully reduce the amount of decisions I would have to make since they say the older we get, the more our decision making skills start to slip.

Right now my portfolio follows a 60% 5i Canadian equity market sector balance, and about 20% US equities and 20% cash. My thought is to create a portfolio with the following asset allocation:

30% Gov & Corp Bonds VAB

15% Canadian Equity VCN or Canadian Div CDZ
15% Individual CDN small & Med cap stocks

10% US Equity VUN
20% US Large cap individual stocks already in Portfolio

10% International Equity VDU & VEE

Your comments would be appreciated.
Thank You
Frank
Read Answer Asked by Frank on April 11, 2017
Q: Hi 5i Team:
While I have a good sense of how my overall portfolio is performing I am struggling to find an uncomplicated method of assessing the contribution of individual holdings. When I try to apply a formula for CAGR say, I find myself stymied in almost all cases by having bought and sold shares over time,or having return of capital issues, or at the very least not necessarily re-investing the dividends in the same stock over the time frame in question but just somewhere in the portfolio. Can you suggest a workable way to bring some discipline (objective "hard numbers") to assessing the contribution of individual holdings to the overall portfolio given the above types of complications (and more)? If the answer is too involved/lengthy for Q&A perhaps you would consider the topic for a future blog?
Thanks,
Read Answer Asked by Stephen R. on April 10, 2017
Q: As a new member, I am puzzled by the composition of the Coverage Summary spreadsheet and accompanying 70-company report database. Perhaps I am missing something, but it seems to me that the research database would be more useful to an investor if it contained 70 companies all of which are highly rated. I don't understand the rationale for including companies that are rated lower than B. There must be more Canadian companies that would fall into the A or B categories. It also puzzles me that many of the companies in the model portfolios are not covered by the research.

In summary, would it be possible to include some notes on the website or accompanying the spreadsheet/database explaining how the 70 companies were chosen, how this research is to be used by an investor, and how and when companies are added or removed from the coverage.

Thanks in advance.
Read Answer Asked by Gordon on April 10, 2017
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