Investment Q&A

Q: Hello to the 5i team

I have always struggled with diversification as it relates to management of a portfolio. I understand the wisdom always being offered (including here at 5i) along the lines of ensuring that proper diversification is maintained. I read something recently that indicated an academic study demonstrated that the maximum effect of diversification is achieved with 18 positions.

My concern and understanding is this: while diversification offers the investor some greater degree of protection on the downside, it also prevents, I believe, any chance of accumulating significant wealth because of diluted positions in any given security.

There was a recent article in the G&M discussing the merits of owning a portfolio consisting only of Canadian banks. Most of the investment professionals consulted on the matter considered this to be a very bad idea. However, I think the idea merits serious consideration considering their long-term performance.

I know 5i advocates diversification but what is your take on a smaller concentrated portfolio?

Thanks very much. Your service is very much appreciated.

Q: Hello Peter and the 5I team
When markets correct as the tsx has done so, I like to search for companies that are able to hold their own in down times. I was surprised at how well CXR held up throughout the correction so far, the SP seemed to hold its own while the market came down. I was wondering if you could give us a few names of stocks that surprised you on their resilience to the market correction. Or maybe a few names that have a habit of holding up in down times.

Thanks for your response

Q: hello 5i team

Can you please provide metrics for GILD at it's last close of $112 please and your opinion moving forward would be appreciated as well?

Thanks for all you do

Gord

Q: I own CRP shares and, as an owner, have recently received (for "free") an equal number of CRP.RT rights, giving me the right to purchase one CRP share at $5.84 for every 1.1063 CRP.RT. (CRP itself closed at $6.41 on Friday.) The rights expire on Nov. 28, but in the meanwhile may be traded on the TSX.

It seems to me that this is more or less equivalent to participating in a bought deal at 1.1063*5.84 = $6.46, and, as is usually the case with bought deals, that the share price is likely to fall in the short term as a result of the substantial dilution.

I like CRP for the long term, but wonder if I wouldn't just be better off selling my CRP.RT on the market now (Friday's close was $0.45) and then perhaps buying more CRP shares directly after Nov. 28 if their price falls. I would appreciate your opinion on this.

Thanks!

Q: Hello,
What is the inception date of the portfolios?
Thanks,
Tony

Q: is there a TSX equivalent to the GLD. Please and thanks.

Q: i have cnl.to for several years - may have been a john embry pick from market call. i keep getting reports of yet another hi grade drill hole and they are doing a lot of work on access roads and tunnels . i contacted them by email to get a questamation of when the actual mining will start - they don't answer me . do you have any info on this stock? thanks---ed

Q: I have a 4percent weighting in diversified income portfolio in keyera.
What are your thoughts on adding to this position to bring it to 5 percent?

Thanks in advance

Q: I have a problem with fund managers who go on a TV business channel and brag that they have 25-35% of their funds in cash to keep their "powder dry"but still charge about 3% on your investments.As well the cash in the cash in the fund is actually losing money.Am I correct in this analysts.Thanks for your unbelievable service and advise.Jim

Q: What is market expected for ER result on Nov. 4th. Thanks.

Q: What is the ER expectation for Amaya since addition of PokerStars? Date of when it reports in November? Thanks.

Q: In my equities-only portion of my portfolio, my Finance-REIT weighting is 34% (22% and 12% respectively). The utilities sector is 19%, Consumer-Health is 16%, Manufacturing-Info Tech is 10% and Resources is 21%.

Ideally I'd like to decrease Finance-REIT to 30% in order to increase Mfg-Tech towards 15%, but I like the Finance-REIT holdings (AD, BNS, RY, SLF and Sentry REIT, TCN). I'd like to rebuy CSU in the process.

I am a retired dividend-income investor. Are my current Finance-REIT weightings too high? If yes, would you simply create the CSU cash by trimming the Finance-REITs?

Secondly, is my Resource weighting too high? Among my holdings are BTE, CPG, SGY, WEF.

Thanks in advance...much appreciated.
Steve

Q: For my TFSA which of CNR or TMA would you pick? Is Mullen MTL a possible, considering the dividend and valuation?
Thanks for all you do.

Q: Hi thank you for all your help this is probably the best service I have ever had. Just wonder what has been pushing dhx lately, I can't find any real news could this be another aya? I sold out to early on that one. Thanks and happy Halloween

Q: Good morning Peter and staff

Since the the market has gone down quire a lot,, can you recommend 2 growth, divided stocks for a 10 year old RESP Portfolio.
Thanks

Q: Hi there,
I am enjoying the Bull run on DHX.B, with a P/E of greater than 138x do you think this can sustain?
I plan to trim down on DHX from my TFSA holdings would MDA or AYA be a good alternative for portfolio balancing purposes at the current prices?

Also what is your opinion on GSK (US) for my RRSP as a healthcare stock? Thanks a lot. cheers, Shyam

Q: Torc has had a lot of insider selling this past week. Should this be a concern ahead of their earnings?

Q: Your equity portfolio has a heavy weighting to Tech stocks (CSU,MDA,ESL,DSG,SYA,AYA). Some of these have had big moves this year - I am looking to add some exposure for a long term hold - which of these offers best value now. Many thanks

Q: Peter & Team, what do make of DEE? Natural gas has made a nice bounce off its recent $3.60 low, yet DEE continues to drop. In fact, natural gas is only off 3% from its beginning of Sept level, yet DEE is off an incredible 52% in two months! True the Wapiti sale (about 10% of production) fell through, but drill results are good as is growth. Stunningly, cash flow per share is forecast at $.43 and $.47 per share in each of '14 and '15. This is a cash flow yield of +20% in each of the next two years (impossible to find outside energy sector and quite a bit higher than the recently beaten down energy stocks). Perhaps natural gas prices are running well below the levels predicted by the company in determining a $3.41 discounted per share value. If this is a material change in facts, would you sell here, wait until winter or buy more. Appreciate your thoughts.

Q: With BEP.UN today closes at $35.67 near its all time high of $35.84, do you still advise an investor to take an initial position at this level?

Also, how safe is the dividends and can the 28%+ gain YTD be continued into 2015?

Thanks.