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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 have owned National Bank for a number of years. I have read the posts and your preference for TD and BNS. I presently feel that this may be an ideal time to make a switch. The P/E of National Bank (according to Google) is presently quite high, especially for a bank, in my opinion. It is presently a few points higher than both TD and BNS (and also has a slightly higher dividend as well). Is there something going on at the National bank that justifies this higher P/E, is it simply investor sentiment, the higher dividend...? If the P/E is unjustified, in time the stock will retreat and I would rather switch over when the price is higher. Your thoughts on switching over (dollar for dollar). Normally I do not like doing this because, it is not a dollar for dollar switch, after I pay taxes (but I am sure I can sell some losers as well). If you recommend the switch, why do you like TD and BNS more. Looking at the 5 year charts, I see that TD has performed well in comparison. BNS and NA are at about par (assuming NA can sustain the PE or increase its EPS at a higher rate than the other banks). I assume that if the switch is recommend, I do it 50/50? Thanks.
Read Answer Asked by Walter on January 31, 2017
Q: I am interested in building a portfolio based on the Balanced portfolio, Dec 2106. It currently consists of 23 holdings, not including cash. Of the total portfolio 7 holdings are NR which I presume is "no report". I believe you add these with the following comment:
“The portfolio contains some stocks that 5i Research® does not currently cover. We needed to add these names to increase the average market capitalization of the portfolio, and to add sector balance. We are very comfortable with the companies we have chosen, and will cover the 7 companies in due course.”
My question then is what are the metrics that you have initially applied to reach a comfort level such that these are included prior to a report being completed?
Read Answer Asked by Peter on January 31, 2017
Q: Hi 5i,

I know you generally don't research U.S. companies but I thought I would ask your opinion on Nike. I bought a small position last year for $59 and change. I have watched it continue to go down and really not be able to get above $54. Would you advise I just sell and cut my losses or should I wait things out?

I really appreciate your opinion. Thanks.

Read Answer Asked by Wendy on January 31, 2017
Q: On January 27th, I receive a notice from TD Direct Investing dated from January 16th. In that notice, I was proposed to choose between two options: option 1 to transfer my Intertain stocks to Intertain Exchange (ITX) or option 2 (default) to transfer my IT stocks to JackPotJoy (JPJ) on the London Stock Exchange (LSE).

I called TD on the day I received the notice. After arguing with the clerk and his coordinator, they said that the delay was expired to choose any other option than the default and that TD was not responsible for the 10 days' delay. It was either Canada Post's or the transfer agent's fault. At some point, the clerk said that I was not the first client to complain.

The alternative given is to trade the JPJ stocks after they will appear on my account and TD would wave the commission.

Please give me your opinion on this situation, what are the possible consequences and what can be done.

I think that
- Canada Post is the usual suspect in any delay but 10 days is too much and TD and the transfer agent should take some blame in the matter.
- The default option to transfer Canadian securities to a foreign exchange is borderline incompetent decision.
- What if there is an impact of the FX from GBP to CAD with the sale of JPJ stocks on the LSE.
- Is there anything that can be done or compensation that I can claim in that situation?

I started a blog on 5iR on this subject, because there could be a class action case, in my opinion.

Thank you for your support in that matter.
Read Answer Asked by Jean on January 30, 2017
Q: Middlefield is proposing to make Aeu.un a mutual fund company. Is it best to sell now or to go with the change?
Read Answer Asked by Philip on January 30, 2017
Q: Based on your previous answers you seem to have a luke-warm response to Visa as a stock and appear to favor U.S. banks for example over Visa. Can you expand on that preference and what your thoughts are on Visa alone. Folding Visa Europe into the company seems to offer a lot of potential. Do you think the risk of different payment alternatives becoming available puts Visa at too much risk given its relatively expensive multiple. Thanks for your input.
Read Answer Asked by Christopher on January 30, 2017
Q: Lately there’s been a profusion of articles warning about the deeply negative effect Trump’s policies might have on Canada, with respect to trade agreements, taxes on imports, foreign investment shifting from Canada to the USA, etc. To the extent an investor should be influenced by this new outlook, I was wondering if you could list the sectors and associated companies in Canada which you think would be hurt the most if the dire warnings come true, and which ones would be the most resilient. Also, are there any particular foreign investments Canadians should be considering at this time? Let’s assume a time horizon of at least four, and possibly eight, years. Thanks for your insights.
Read Answer Asked by Brian on January 30, 2017
Q: Hello!

I am mirroring your model portfolios and I currently have 50% of my holdings invested in Balanced, 25% Income and 10% Growth. I also have 10% of my portfolio equally split between VEF and VSP.

I have the opportunity to increase my holdings by about 30% and I'd appreciate your help in deploying those additional dollars.

Should I allocate across the board based on the same percentages? Should I up my percentage in VEF/VSP? Or is there something other investment(s) you would recommend?

I foresee a 6-8 year horizon before needing to draw down on any of these investments.

Thank you for all that you do. I really appreciate all your effort.

Best regards
M
Read Answer Asked by Michael on January 30, 2017
Q: Hello Peter and Co.:
I have never had any kind precious metals in my portfolio but I'm thinking with the way things are going and possibly inflation coming around in the next few years it might not be a bad idea to have some. I recently became aware of a company called Goldmoney. Is that a good way to hold gold? I really don't know anything about all of this so am looking for your advice and opinion. cheers
Read Answer Asked by Andrew on January 30, 2017
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