Q: This is a question I sent in last week, and the answer:
Question:
I am new to 5i, and investing based on the Balanced Equity Portfolio. Some of the companies in the portfolio have B and even C ratings. Why are they here if A ratings are the best? It seems to me I should get the best performance if I only invest in the A rated companies in the portfolio. Or am I wrong?
Answer:
We needed to add other companies for diversification and balance within the portfolio. Also, there are not enough A rated companies to really provide proper diversification. One other point: a company could be rated C but still provide significant upside if the valuation is low enough to start with.
I'm looking for more details on this matter. If the response uses up several of my "question credits", that is OK.
Having started a little over a month ago, I have only bought into about six companies so far, all from the Balanced Equity Portfolio. This represents a very small portion of my total investments.
Below you indicate that B and C rated stocks are added for diversification and balance. At the moment, those factors are not important to me because I get diversification and balance elsewhere. What I'm trying to do is maximise my potential return with 5i.
According to the 5i Research Ratings, it would seem that an A stock is likely to have a higher return, with lower risk, than a B stock. So if I don't need diversification, then it would seem that over time the A stocks will outperform the B stocks. Or am I wrong?
Have you done any analysis of the performance of A stocks versus B stocks? What were the results?
As someone just starting with 5i, it would be useful to know the date you "opened" a position in the Portfolio. Is that information available?
How often do you update/reconfirm the stocks in the portfolio. For example, WCP has declined 32%. Is it likely to be dropped from the Portfolio or is it a better buying opportunity then before? On the other hand, CSU has increased over 400% and is still rated an A. With a great rating and momentum on its side, is CSU a screaming buy or is it overvalued and at risk of a decline?
Do you ever put on a "hold"? For example, I am interested in TOY, but the stock has recently had a substantial price increase. Is it still a buy, or should I wait for a pull back?
Question:
I am new to 5i, and investing based on the Balanced Equity Portfolio. Some of the companies in the portfolio have B and even C ratings. Why are they here if A ratings are the best? It seems to me I should get the best performance if I only invest in the A rated companies in the portfolio. Or am I wrong?
Answer:
We needed to add other companies for diversification and balance within the portfolio. Also, there are not enough A rated companies to really provide proper diversification. One other point: a company could be rated C but still provide significant upside if the valuation is low enough to start with.
I'm looking for more details on this matter. If the response uses up several of my "question credits", that is OK.
Having started a little over a month ago, I have only bought into about six companies so far, all from the Balanced Equity Portfolio. This represents a very small portion of my total investments.
Below you indicate that B and C rated stocks are added for diversification and balance. At the moment, those factors are not important to me because I get diversification and balance elsewhere. What I'm trying to do is maximise my potential return with 5i.
According to the 5i Research Ratings, it would seem that an A stock is likely to have a higher return, with lower risk, than a B stock. So if I don't need diversification, then it would seem that over time the A stocks will outperform the B stocks. Or am I wrong?
Have you done any analysis of the performance of A stocks versus B stocks? What were the results?
As someone just starting with 5i, it would be useful to know the date you "opened" a position in the Portfolio. Is that information available?
How often do you update/reconfirm the stocks in the portfolio. For example, WCP has declined 32%. Is it likely to be dropped from the Portfolio or is it a better buying opportunity then before? On the other hand, CSU has increased over 400% and is still rated an A. With a great rating and momentum on its side, is CSU a screaming buy or is it overvalued and at risk of a decline?
Do you ever put on a "hold"? For example, I am interested in TOY, but the stock has recently had a substantial price increase. Is it still a buy, or should I wait for a pull back?