Investment Q&A

Q: I am looking for some guidelines on when one should trim a position exceeding 5% of your holdings. I have a 7.3% a 6.3%, a 5.6%, a 7.0%, a 7.5%, and a 6.2%. 4 of these I have already trimmed some time ago. Is trimming more of a gut reaction or do you have something more concrete to guide you? Combined with this problem, when you do decide to trim, what (and why) % do you trim down to?
I have this problem, mainly, by following your excellent advice.
Your thoughts will be much appreciated. ram

Q: Hi,
Is there way to save transaction fee on dollar cost averaging? I want to buy several stocks/ETFs every week. E.g. ARKK, VEEV, etc. However the transaction fee will be 520 dollars every year for each stock/ETF. If I do it on 10 stock/ETFs the it will be 5200 dollars.
Thanks!

Q: If you have a $50,000 portfolio and you own one stock with $25,000 in it and the other $25,000 is in cash, would you consider that diversification?

Q: I'd like to get your take on a piece in the Globe and Mail yesterday by Scott Barlow related to the Canadian dollar. It's position is that on top of a large rise the loonie has already experienced, we can expect it to go much higher compared to the US$. This obviously doesn't bode well for those with investments in US dollar accounts so I wonder if you think it might be better to shift some of it back to Canada, perhaps into hedged ETFs with US holdings like XMH or VSP.
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-the-strongest-force-behind-the-market-rally-could-push-loonie-much/#comments

Q: As Tech stocks have gone much higher do you think that new money should go to different sectors such as REIT,ENERGY AND FINANCE or more towards tech,
What sector you see has more potential now?

Q: With either Globe Investor and iTrade, I rarely get information about the date when companies will be reporting earnings. In questions when clients ask what the earnings numbers will be for the quarter coming up, 5i gives the numbers but could you elaborate by saying the numbers "look good" or "not good"? Thanks, Dennis

Q: I would appreciate your views about the benefits of specific factors. I have read a number of articles which claim that over time, dividend growing stocks do better than stocks with no dividends or stocks with overly high dividends. Similarly, there are research articles which claim that "quality" stocks outperform the indexes. Increasingly, I see articles which appear to indicate that other factors such as momentum, women-led companies, socially-responsible firms, etc. also have improved performance. The ETF industry is now offering a wide variety of funds based on these factors (with higher fees than the broad based index funds).

Which factors, if any, do you see as offering outperformance of the broader based indexes over long-term time frames? Are ETF investors better to look for low-cost broad index funds, or should they seek specific types of factor ETF funds recognizing the slight difference in fees?

Thank you for your advice and insights.

Q: Watched Jeffery Gundlach being interviewed by Daniel Martino Booth, his credentials are very impressive, I have always liked to listen to his view of the Worlds Financial System.
According to him the Fed will take drastic measures in Drastic times. example being they have already done so by violating the Federal Reserve Act, with their purchases of Corporate Bonds, Stock purchases will probably come next.
I was confused by his biggest fear that the FED might declare their Liabilities as " Legal Tender"...... could you explain what he means by that Statement. I assumed that their Liabilities where already Legal Tender in the fact that their liabilities are backed by the Tax Payers of America, or did he simply mean he is fearful of the Fed just printing 7 trillion and wiping away all the debt.
thanks Gord

Q: Hi 5iTeam,
When evaluating a stock for a possible position, among other factors, how much weight would you put on "short interest as % of flow" and reasons for your answer.
Cheers

Q: Further to Art's question; what other "limited supply" assets are there besides precious metals and real estate ? Besides gold, gold co's and real estate, what other plays would you recommend ? Thank you.

Q: Can you tell me the difference between net income and adjust net income? What are companies adjusting for? Also, when there is a street estimate, and analysts estimating for net income or an adjusted figure?

Q: In researching key ratios for a particular company, one metric is cash flow.
Could you please explain the difference between price to cash flow vs. price to free cash flow and what might be a reasonable target in each case.
Thanks, Brian

Q: Hello 5i Team
Given 5i are not tax experts, could you please comment on the subject below as I could not find a clear answer.
1 - If I own, in a taxable account, a US based REIT (i.e Monmouth REIT) and if a portion of the distribution is "return of capital (ROC)", is the US ROC treated the same as Canadian ROC (i.e. deducted from the capital cost of the US REIT each year therefore reducing the adjusted cost basis)?
2 - Or is the US ROC "lost" and I pay tax on it similar to a dividend from a US corporation?
3 - I have noticed the US REITs do not post the tax breakdown of the annual distribution as the majority of Canadian REITs do.
Any suggested source of information for this topic?
Thank you

Q: Do you figure there's much to this weakening USD trend or it's likely a short term fad?

Q: Hi Peter, Ryan and Team,

From my readings about RESP, the maximum contribution per child is $50,000. What options are there once we reach that limit? Continue investing in an in-trust trading account ?

Thanks.

Q: There has been a lot of talk about inflation recently.
A lot of people will typically flock to gold, but if the currencies devalue, won't all assets appreciate in price, including real estate and stock? My question is - what is likely to appreciate faster: gold, real estate, or stocks?

Q: Any thoughts on how the pound will fare in the next 6 months? My thoughts are that the Great Britain needs the EU more than the EU needs Great Britain. My guess the EU will play a little "hardball" with Britain so the value of the pound will decline. Of course a declining pound should help British exports...just like a weak currency helps Canadian exports. I'm not intending to short the pound. Just curious. (A pound currency at one point was backed by a pound of silver. Now the pound currency is worth about a tenth of one ounce of silver. I believe we call that inflation!)
Regards,
Jim

Q: As electric cars gain traction do you see this having a benefit for utility stocks over the next 3 to 5 years? I'm thinking people will charge up their cars overnight increasing the demand load for the utilities. Possibly the utilities will need to upgrade their infrastructure so there might be up-grade costs. Possibly 3 to 5 years is too short a time for electric cars to have much of a presence. Utilities are regulated (I think) so all rate increases I suppose would need to be approved by regulatory government agencies which may baulk at any rate increases. Any thoughts you have would be appreciated.
Jim

Q: Can you weigh in about US pre-election jitters and what might happen in the stock market this go around?

Q: Modern Monetary Theory appears to be gaining increasing acceptance. If Western governments were to adopt this Theory, what do you believe the impact would be to investment portfolios? What investment classes do you believe would do well, and what investment classes would do poorly? Do you see this Theory as causing a change to portfolio allocations amongst investment classes?

Thank you for your wonderful and thoughtful insights.