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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: Hello 5i team,
Much is being said about protecting one's portfolio in the event of a correction; here is what I think.

Let’s assume that my portfolio is worth 100k, 5k of which is in gold (5% as you suggest).

If the market corrects by 10% and gold appreciates by 10%, the value of my portfolio would drop to 91k (85.5k equity, 5.5k gold); If I did not hold any gold, my portfolio would have dropped to 90k (or 1k less).

If the market corrects and gold appreciates by 20%, the value of the portfolio would drop to respectively 83k and 80k (or 3k less).

If the market corrects and gold appreciates by 40%, the value of the portfolio would drop to respectively 64k and 60k (or 4k less).

I conclude that holding 5% of my portfolio in gold does not provide materially significant protection in any of the above scenarios.

If one desires real protection in any of the above scenarios, 50% of the portfolio should be in gold; only then would the value of the portfolio remain intact.

Your comments are most appreciated,

Antoine
Read Answer Asked by Antoine on February 24, 2017
Q: You talk about sector and asset weighting based on an entire portfolio. If one's portfolio is say $50,000 and a 9% stock weighting is $4,500 is it worth the fees to sell and re-balance? Does the answer change if it's a long term holding? What if the individual is making regular contributions of $10,000 / year? Could they continue to hold that 9% position and reduce it over X number of years by investing in other assets?
Read Answer Asked by Gooding on February 24, 2017
Q: Hi guys,

My portfolio has slowly but finally become well diversified thanks to you and your service the past couple years. Now that I am at this state I am looking for a higher risk company to invest a small amount of money in. What stock do you see as having some huge growth potential albeit risky?

Thanks again
Read Answer Asked by Paul on February 24, 2017
Q: Hi,
I have these 4 in my RRSP and have about $26,000 in cash to invest there. What would you suggest for this money and would you suggest changing of any my current holdings. Looking at a 5 year hold. Thank you.
Read Answer Asked by Alan on February 24, 2017
Q: Researching some of your Small Caps
Can you put in order what you like to start a new position . Thank you.
Read Answer Asked by Barry on February 24, 2017
Q: "A Share Change for Enbridge Inc. (ENB) in S&P/TSX Indices

TORONTO, Feb. 23, 2017 /CNW/ - S&P Dow Jones Indices Canadian Index Services will make the following changes in the S&P/TSX Canadian Indices:

Enbridge Inc. (TSX:ENB) has completed the acquisition of Spectra Energy Corp. (NYSE:SE). To reflect the issuance of common shares as part of the transaction, the relative weight of Enbridge will increase in the S&P/TSX Composite and Capped Composite, the S&P/TSX 60, 60 Capped and 60 ESG, the S&P/TSX Composite Dividend, the S&P/TSX Composite High Dividend, the S&P/TSX 60 Carbon Efficient, the S&P/TSX 60 Carbon Efficient Select, the S&P/TSX 60 Fossil Fuel Free, the S&P/TSX 60 Fossil Fuel Free Carbon Efficient, the S&P/TSX 60 Fossil Fuel Free Carbon Efficient Select and the S&P/TSX High Income Energy Indices at the open of trading on Tuesday, February 28, 2017."

Do you think that the increased weight for ENB shares in the S&P indices will result a buying pressure on the stock price, on Feb 27&28 ? Should it be material ? What are your views on ENB now, once Spectra merger has closed ? Thanks

Read Answer Asked by rajeev on February 24, 2017
Q: 11:31 AM 2/23/2017
Hi Peter:

I don't quite understand your rationale for owning gold bullion, gold streamers or gold miner shares as insurance. Today you said : "The key for 'insurance' such as gold is to own it when you need it, not after." It seems to me that this implies selling your gold at a crisis time since insurance only pays off if the house burns down.

Does this mean you advise actually selling gold positions if the market plunges? Golds get hammered too in crisis situations so may not be winners either. Holding golds through a crisis is almost pointless since if you don't sell you just ride the price up and back down again and almost all golds have trivial dividends, so no meaningful income from them while holding. I just don't see the point. Much better to own BCE or RY or TRP! Would you agree?

Thank you.... Paul K
Read Answer Asked by Paul on February 23, 2017
Q: Cott reported today. In the past year it has traded as high as in the 20s and now around 15. I have a half position and they seem to be on track to achieve better growth and revenue in 2017. Would you endorse a full position? I like it also has a potential takeover target. They tried a few years ago but now they are a different company and possibly more attractive to the likes of pepsi or coke.
Read Answer Asked by Helen on February 23, 2017
Q: Spinmaster and Exchange have both had positive news lately , can you give me an estimate on what the ceiling would be for each of these strong gainers and time frame. TY for all you do.
Read Answer Asked by Alan on February 23, 2017
Q: The markets have had quite a run and I am considering the manner in which I can protect the bulk of those gains. Although I acknowledge and understand that market timing doesn't work, intuitively given the extent of the market run, the odds of a pullback must be greater and therefor are not some hedging strategies prudent at this juncture? How can I hedge those gains in a self directed account with a mix of registered and taxable accounts, the bulk being in taxables which have in certain securities significant gains? Thx
Read Answer Asked by Patrick on February 23, 2017
Q: Just joined and will be slowly adopting your balanced equity model portfolio.

I am heavily overweight in financial ( 25%) and energy ( 19%) and have very low exposure to tech ( 2%). Which 1 or 2 of the tech stocks currently in your portfolio/research would be best to add at this point in time. I will probably drop each by about 5% to get 10% into the tech stocks you suggest as a first move.

Read Answer Asked by Tom on February 23, 2017
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