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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: Hi Peter and Team!! My investment adviser is really enthusiastic about Canadian Equity Notes. She has a Bank note based on the TSX 60 that pays 4.5% . It has a 45% downside and is callable as soon as the market is up 10%. ( same type of investment as CBL9436.) I am a little leery and have a few questions. 1) Are these good investments. 2) what are the potential risks 3) because these sound too good to be true, how do the banks make their money? What's the catch. She claims that these are as good as fixed income with minimal risk and got a little upset when I seemed not to be so keen on them. Thanks for your insight, Cheers, Tamara
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Read Answer Asked by Tamara on July 14, 2016
Q: Hope this falls within the scope of your Q & A:

Retired couple, defined pension plan providing coverage for living expenses. Also good real estate assets, including rental property.

Looking for additional income to "indulge" .... possibly even buy that little sports car that I wish I had bought 40 years ago :) ...

Have $500K in RIF. Own most of all your portfolios and a number of other stocks.
Objective to re-structure my portfolio so that it reflects: 50% Income, 30% Balanced and 20% Growth.
I would appreciate your top suggestions from each of your portfolios to achieve this target. The intention is to then review and edit our overall portfolios based on this input.

Thanks so much for your help.
Read Answer Asked by Donald on July 14, 2016
Q: I AM RE-SENDING. SOMEHOW MY QUESTIONS WAS NOT SENT. IF YOU DID RECEIVE THE ORIGINAL MY APOLOGIES.

Hello Peter and team,

I am considering adding to non-reg. acct. these preferred issues: BEP.PR.I; PPL.PR.M; TRP.PR.J; NA.PR.X for a steady predictable income for 5+ years. It is my understanding that these all have a minimum rate reset except NA which GOC yield + 4.90%. First could you rate these in terms of credit risk with the understanding that they all face the same interest rate risks going forward). Second, BEP.PR.I is a limited partnership issue and its distributions will be a mix of ordinary income, Canadian dividends and return of capital so would this be better held in a RRSP or are there any other complications here? Third, can you advise if these preferred stocks qualify as low credit risk overall, or are there others you would choose that would qualify as better credit risk while providing similar yields with a fixed rate reset feature and downward protection. If so could you suggest 4 or 5 better alternatives and advise why you feel they would be viewed as superior. Finally, am I correct in assuming that the minimum rate reset feature provides more downward protection should interest rates in fact rise 4 to 5 years from now.

Thanks for your great advice.

Joseph
Read Answer Asked by Joseph on July 13, 2016
Q: Peter and Ryan and Co.:
Just wanted to say thank you for your unique and excellent service. Between reading the questions and answers, to the great reports, to the model portfolios, it's been and continues to be an amazing education for me and I'm sure many others, in the world of investing.
Having the benefit of your 20+ years of knowledge and experience is pure gold! So thanks again for all you do. cheers
Read Answer Asked by Andrew on July 13, 2016
Q: Hi,

I have a small (100% in oil and gas) portfolio and am 34 years of age. My investment strategy involves riding the oil and gas recovery in the short term (until early 2017). From this point I would like to reconfigure into a diversified portfolio. My question is, when does a middle/not aggressive/not cautious/average person implement your different types of portfolios? I gather that duration until you require the investment is of most importance with risk tolerance playing an equal part of the equation. But what if neither risk adversity or time are an issue? Should I be 100% positioned towards the growth portfolio?

What are some general rules of thumbs and what are some 'ballpark' milestones for someone who is investing for retirement? I'm after a generic answer that looks something like until:
age 40 100% growth,
until age 50 100% balanced,
then by age 60 100% income.
Read Answer Asked by Marc on July 11, 2016
Q: Apologies in advance for a long-ish question. A good friend's $800K portfolio is wildly out of whack diversity-wise courtesy of a recently deposed financial advisor who had him 60% in banks. The friend has entrusted me to right the ship. My philosophy, very successful for me, is to be fully invested and widely diversified, almost 100% in Canada (not impossible to do contrary to prevailing wisdom), with an emphasis on dividends and growth at a reasonable price.

I have set the following personalized sector percentages:

Banks - 20%
Other financial - 5%
Telcos - 8%
Utilities/Pipes - 15%
Energy - 14%
REITs - 12%
Healthcare - 6%
Tech - 6%
Consumer Discretionary - 10%
Industrials - 4%

I am trimming his banks from 60% to 20% which frees up funds to purchase. About 1/3 of what he has is worth keeping. For the other 2/3 would love your input on the overall approach, the following choices and the weights:

Telcos: BCE and T, 4% each
Utilities/Pipes: IPL, PPL, BEP, FTS,NPI, 3% each
Financial: FC and MSI, 2.5% each
Healthcare: DR and CRH 2% each
Tech: KXS, NVDA and SYZ 2% each
Consumer (my definition): PBH, RPI.UN, BYD.UN,CGX, ADW.A, 2% each
Industrials: EIF, CHR, NFI, 1.3% each

REITS still need to be worked on and I'm keeping his current energy holdings which are well down, hoping/waiting for a continued bounceback.

Thank you very much
Read Answer Asked by Kim on July 11, 2016
Q: RE below your answer still does NOT appear (even in your reprint and attempt to remedy this:

July 07, 2016 - Asked by M S

Q: Your answer to Oliver ( July 6) seems not to have printed. He was asking about his allocation to the 12? sectors.

5i Research Answer:
This is strange, so our IT team is checking what happened here. Here is the question and answer:

July 06, 2016 - Asked by olivier

Q: Hi,

I have a diversified portfolio consisting with the majority of my money being in etfs: XIU, XEI, VTI and VXUS

I use a spreadsheet to calculate my sector allocation.

At this present moment in the macroeconomic cycle, should I be equally weighted across the 12 sectors ?

If not, in which sectors should I be under and over weighted respectively ?
Read Answer Asked by Scot on July 07, 2016
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