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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 Peter & 5i team,
So far so good in 2015, even though it was a tough year ; the equities (all canadian) I own have generated a 12.6% total return to Nov 20.
But these equities represent 82% of my RRIF portfolio ; this means that I’m sitting on 18% cash which I hesitate to redeploy.
You say that the US economy is pretty strong ; well, I’m not so sure about that. It is rather the best among a lousy bunch; in other words, in the kingdom of the blind, the one-eyed is king.
The S&P 500 rally is of low quality in terms of lack of breadth ; in 2015, its top 10 performing components represent over 100% of the total whereas that ratio was less than 20% in 2014 and slightly more that 10% in 2013. That’s a bad turn of situation.
The relative performance of the Russell 2000 vs the S&P 500 is in decline due to lack of liquidity in the small cap sector (which is the engine of growth). That’s no good either.
The Retail sector (consumer discretionary), which is a very important sector in the US economy, is dominated by only 3 names : Amazon, Netflix and Expedia. That’s hardly reassuring.
The US$ keeps gaining ground ; that causes enormous pressure on Emerging Markets debt and constitutes a substantial headwind on US multinationals profitability.
To top it all, the 2-year US yield is going up contributing to a flattening of the yield curve ; if (and its a big if) this situation perseveres for a few more months, we could face an economic downturn.
This is my rationale as to why I hesitate to redeploy my cash and look forward to your counter arguments,
Thanks as always,
Antoine


Read Answer Asked by Antoine on November 23, 2015
Q: Hi
Is there a Canadian small cap fund your team likes?
I tried purchasing the Mawer New Canada Fund, but it's now closed and unavailable to the public.
Any favourites you can suggest?

Thanks
Read Answer Asked by Carlo on November 23, 2015
Q: Hi 5i: The stock market situation has changed a lot since I last did any rebalancing. Could you therefore tell me what weights you would now recommend for the 10 TSX sectors. Also, what sectors would you assign to MAL and BOS which Morningstar calls Basic Materials, and to DRT which Morningstar calls Services. Many thanks.
Read Answer Asked by Roland on November 23, 2015
Q: Hi Peter and 5i Team
I'm currently holding Paramount Energy and I've been riding that stock skidding from 13's to 9 after the quarter result. At the current situation of natural gas and oil price, as well as the current company outlook, do you suggest me to keep holding or accumulate more at this level to averaging out? Thanks in advance
Read Answer Asked by Yip Shing on November 23, 2015
Q: Good morning,

I currently hold SPY, VIG and IWO for US exposure in equal amounts representing 8% of my portfolio. Would you recommend switching to/ or adding to these the specific ETFs that you outlined for tech, consumer discretionary and industrial sectors? Also, what portfolio % might you aim for in US currently.

Thanks.
Read Answer Asked by Janet on November 23, 2015
Q: If one has the goal of eventually owning all of the companies in your balanced portfolio, but can't afford all of the companies right now, (keeping in mind which sectors you think have the most potential in 2016, which 5 companies would you buy NOW to take advantage of that potential?
Read Answer Asked by Les on November 23, 2015
Q: Seems like the European market may finally be showing some signs of life with stimulus on the way. Can you recommend an ETF preferably on the TSX to play the European recovery? Or do you feel that market is not a good bet right now?

Thanks
Read Answer Asked by Charlie on November 23, 2015
Q: In response to my inquiry about Inspira's loan payments, Michael indicated they come from the US Government. Does he know if they come directly to Inspira, assigned by the borrowing Doctor, or do they go to the Doctor directly who then remits to Inspira?
Thanks for the info.
Steven
Read Answer Asked by Steven on November 23, 2015
Q: Given the .61 MER of XRE I am considering selling it and replacing with three or four REITs. Which would you recommend?
One more question: I no longer own any property so what percentage of the total portfolio would be reasonable for an allocation to the REIT sector?
Thanks as usual.
Read Answer Asked by Astrid on November 23, 2015
Q: Could you please comment on the BMO covered call ETFs?

Thank you for your great service
Read Answer Asked by Chris on November 23, 2015
Q: When are they expected to report Q4?

What is the consensus for revenue and eps or EBITDA?

thanks
Read Answer Asked by sandy on November 23, 2015
Q: Hi Team, What is your thoughts about this company? I own it for income/growth.Thanks!
Jac.
Read Answer Asked by Jacques on November 23, 2015
Q: Peter: It was good talking to you on the TV yesterday and getting your advice on Vermillion. As a result, I added to our position. Now, can I have your thoughts on two US real estate plays, HOT.UN and MST.UN - Thanks, Ted
Read Answer Asked by Edward on November 23, 2015
Q: What is your outlook for Denison now that they will not merge with FCU?

Thanks, Glen
Read Answer Asked by Glen on November 23, 2015
Q: goodday
In your options strategy i notice that you renew the option or sell another one about once a month. I have heard that others look out to two or three months. I have looked at calm and noticed that on a $60 strike price, you stand to make pretty much the same premium, the feb premium just paying thrr times more than the dec premium. I would like to know if there is any kind of advantage in the once per month option
Thanks
Read Answer Asked by joseph on November 23, 2015
Q: Hello Peter,
Other than positive comments on BNN, what is driving the stock prices higher everyday this week for crh medical, constellation software, and patient home monitoring. Do you think investors are just using BNN as a trading vehicle for stocks as opposed to looking at long term ? Also if you had prioritize your investments between constellation, Eng house and CGI group, how would you rate those? I was thinking 5% weight for constellation, 5% for Eng house , and 2 percent for CGI group. Please provide your view. Thanks again.
Read Answer Asked by umedali on November 23, 2015
Q: What do you think of todays news by the company. At this price is it worth buying.
Read Answer Asked by George on November 23, 2015
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