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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: 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
Q: Hello,

What is the proper way to assess ones portfolio performance and over what period of time should it be underperforming before you change your approach?

The equity portion of my portfolio is down 8% for the year which is horrible compared to the TSX. I have lots of solid blue chips and stocks from your balanced, but 25% of my portfolio are small caps (mostly from your growth portfolio) that are not doing well at all.

It makes me kinda depressed to be underperforming an index but on the other hand I know that small caps aren't doing well right now and generally need to be held for several years. Also, if one or two doing really well, my portfolio will too.

So how long do I wait to see if I get the 9% yearly returns I'm aiming for?

Best,

Carla

Read Answer Asked by Carla on July 04, 2016
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