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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 would like to invest using only 4 ETFs. One for short bonds, one for all Canadian stocks, one for emerging markets, one for the whole US market, and one for the developed world (as wide as possible) excluding Canada and the US.

Which ETFs should I use?

Thanks

Read Answer Asked by Federico on July 19, 2021

Q: Within my fixed income allotment I've recently favored short term bonds over long term bonds on the advice that they will react less to changes in interest rates. However, since the Fed's meeting last week the opposite has occurred, as there has been a flight from short term bonds into long term bonds. Can you please explain why this is the case and then, given the current environment could you also rank the above ETF's in order of preference. If there are better fixed income suggestions please indicate. Thanks.

Read Answer Asked by Curtis on June 21, 2021

Q: Im 71 years old. As I get older Ive tried to simplify my portfolio, going from about 50 stocks years ago, to my current portfolio of about 16 stocks, 3 ETFs and 15% cash.
I am a subscriber to your Portfolio Tracking and Analysis service and Im told I need to make changes to reach a suggested asset allocation and portfolio diversification. Right now Im tech, utilities and financial services heavy.

Heres what Id like to do:
The following set up gives me an allocation of 70% equities, 20 % bonds and 7% cash. Im comfortable with this and have gone through many 20 and 30% corrections in the past 30 years without too much despair.

In my Canadian cash account Id have CDZ, FTS, AQN.
Locked in RSP (LIRA) I would have AAPL, ZSP, ZEM.
Unlocked RIF I d have CLF, ZAG.
TFSA would have QQQ, ZEM, ZDI, CSU, TOI, SIS.
Id like cash around 8% of portfolio.

Im wondering if I have my portfolio diversification covered and if the right stocks or ETFs are in the appropriate accounts for best tax efficiencies?
Your input would really be helpful.
Thanks
Frank

Read Answer Asked by Frank on June 10, 2021

Q: I am hoping you can help with some suggestions for review for a RRIF portfolio. The plan is for one third to be invested in a 5 year laddered bond portfolio. Is it best to buy bonds or an ETF ? Please suggest a couple of bond ETF's for review.

The remainder would be invested in equity ETF's. Half would go to 3 or 4 ETF's which would pay dividends and would have some growth potential. The remaining third would be invested in 3 or 4 ETF's focused on growth.

Obviously the dividend tax credit is of no benefit in the RRIF but currency fluctuations would be a consideration.

Any assistance you can provide would be appreciated.

Mike

Read Answer Asked by michael on April 30, 2021

Q: Hi!

I used to own these ETFs for my fixed income exposure. I went to 0% fixed income during the downturn last year, instead using the proceeds to buy stocks that were crushed. I'd like to slowly start to build a position again in my RRSP. Am I too early? It seems like rates have started to rise and where they go is anyone's guess, but if bonds have an inverse relationship to rising rates, aren't I setting myself up to lose money? Does a laddered approach negate that somewhat? Maybe its best to start with CBO since its Corporate credit and laddered? How would you rank these in general and in order of which I should accumulate first. I realize XHY is riskier than the others.

Thanks,
Jason

Read Answer Asked by Jason on March 19, 2021

Q: These ETFs make up my main bond holdings in an RSP. All have done OK, but are starting to slip a little bit. I also hold XTR, which has a high bond component, and noticed that they recently reduced the distribution. In an increasing rate environment, how would you rank these 3 bond ETFs in terms of (1) maintaining share price; and, (2) maintaining distributions?
Thank-you

Read Answer Asked by grant on February 11, 2021

Q: My RSP is comprised of VFV, VIU, CLF but I like the concept of the auto rebalancing of VGRO. However the longer duration bonds in VGRO are concerning. Would you make the switch. Conventional wisdom says bonds are going to be destroyed going forward, when monetary tightening eventually happens.
And by the way my 2020 5i account return was 16%. You guys Rock!!
Thanks

Read Answer Asked by Brad on February 08, 2021

Q: I have a taxable corp account, 94% equities,(28% US, 6% cash. Just read an article that bonds even at 0% expected return would help off set losses in this and upcoming volatile market, even though interest would be fully taxed.
Would you suggest;
1. sell some winners or tax loss some losers and buy a bond fund, ?CLF. ?CBO-or another one you might recommend. What weight percentage would you suggest?
2. use the cash to buy the same bond fund or a combo of the above two or your alternative
3. buy a preferred corporate share or shares? suggestions or preferred ETF ?HPR or another suggestion
4. Would you suggest a US Bond fund, ?suggestion
5. do nothing
Thanks and deduct what you see fit

Read Answer Asked by JEFF on October 22, 2020

Q: The bond portion of my portfolio is equally weighted between CLF and ZAG. With CLF having a government bond and shorter term focus and ZAG having a corporate bond component and longer average bond life, would it be sensible for someone with a medium risk profile to sell CLF and consolidate the bond portfolio in ZAG to take advantage of the higher interest return?

Read Answer Asked by Ken on July 28, 2020

Q: What are the best government bonds for a retired 70 year old, that presently has no fixed income????

Read Answer Asked by Manuel on July 23, 2020

Q: I have no exposure to fixed income and wanted to know if there are any other that you were preferred over this list? I am looking at buying all of these names each for a 5 % weight.

Thanks

Read Answer Asked by on July 23, 2020

Q: I am currently reviewing my mother's non-equity portion of her retirement portfolio. She currently owns CLF, ZAG and short-term GICs. The interest from these investments are not needed for immediate living expenses. The non-equity investments in her portfolio serve to reduce volatility, and provide peace of mind.

Everything I have read recently indicates that interest rates have likely made a long-term bottom. As such, I am wondering whether my mother should sell ZAG and keep her interest-bearing investments in short-term, secure instruments only (i.e. CLF and GICs). In short, should she be staying away from mid-long term bonds?

Jeremy Siegel recently recommended that retirees should modify the traditional 60/40 stock/bond portfolio to 75/25 going forward because he does not anticipate good returns from longer-term bonds. Do you agree?

Many thanks for your thoughtful and valued insights.

Read Answer Asked by Dale on July 06, 2020

Q: Hi Peter and Ryan.
The US will try to open up the Economy and create employment. I remember they have talked about spending on infrastructure. I am looking for some opportunities there. Do you think CLF is a good mid/long term investment? What are your recommendations if not?
Thank you,
Yiwen

Read Answer Asked by Yiwen on May 21, 2020

Q: Hi,
I'm trying to create a well balanced bond fund for that portion of my portfolio and have come up with this: HFR-T, CBO-T, CLF-T, TLT, XBB-T, CVD-T, SHY, FLOT, IVOL, BNDX, VSG-T
I guess I should have something that will generate monthly income as well? If I am overdoing this, please let me know...it seems like a lot of holdings. Is there a better way? A mutual fund?
Thanks.

Read Answer Asked by Gregory on May 13, 2020

Q: I am looking at the fixed income side of my portfolio and I am questioning the wisdom of holding CLF. Now I know there can be some sense in holding bonds even when interest rates are low (ie for the yield to maturity (YTM) and for the possible capital appreciation if interest rates go even lower). But for CLF this barely applies: the avg YTM is only 0.56% and the avg duration is 2.66 years (according to the Blackrock website on Apr 27). Thus the potential capital appreciation is very capped as the appreciation would only be in the 1.5% range if interest rates dropped to 0 and yet the potential capital depreciation is much much larger if interest rates rise significantly. So one is risking capital for a very low ytm without much potential upside and if interest rates rise, a potential rather large downside. Wouldn't holding cash make more sense?

Read Answer Asked by William on April 28, 2020

Q: What are your top 5 Fixed Income ETFs (Cdn or US / International exposure) to hold long term in a RRIF or RSP in the current environment?
Thank you in advance.

Read Answer Asked by Edward on April 27, 2020

Q: How would you rank these bond funds. I sold FTB and bought PMIF but it is not performing well. Bond funds have not performed well due to the drop in interest rates. I am retired in my late 70s.

Read Answer Asked by Donald on March 24, 2020

Q: Thanks for all your hard work during this uncertain period.

I'm transferring conservative Mutual fund monies (to get out from under their fees) over to Questrade.

I want to keep that money conservative. I'm not drawing back, but just trying to keep my allocation.

I've read that similar bond ETFs are not the best way to go forward. Some recommend cash, even US cash but this seems too fearful.

Please recommend an ETF option for this situation.


Read Answer Asked by Kevin on March 23, 2020