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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 very much appreciate 5i along with your ETF site. From your ETF site, I have been playing with the ETF sector balancer and have found it quite useful to see the % of the sectors my postions occupy .
My questions
1. I am considering a 1/2 position of XHC, XGI, and XCD and a 1/4 postion of VUN and XQQ. Is now the time to buy these or should I sit on my cash for a while or should I be considering some alternatives to these within their sectors?
2. If I execute #1 above, my overall holdings will be 57% CDA, 29% USA, 14% INTL and my portfolio will consist of 2% materials, 13% consumer cyclical, 5% financial, 3% communication, 10% energy, 10% industrials, 6% technology, 17% consumer defensive, 13% healthcare and 18% utilities.
I would very much appreciate your critique and observations.

John
Read Answer Asked by John on June 18, 2018
Q: Hi 5i,

I need to create a fixed income allocation in my LIRA. Would you recommend an equal allocation to the following ETF's: CBO, XBB, ZEF, CPD and ZHY? If not what would you recommend for a fixed income etf position.

Thanks,
Read Answer Asked by Christopher on June 18, 2018
Q: From your report on IIP.UN, it appears that the company is making money from acquiring properties in more urban (i.e. stable) areas and by doing so, it is able to increase the efficiency and profitability of its property management area. The trust is also making some money by raising rents after tenants on old cheaper leases leave and by applying for "above guideline increases for existing tenants" which I think is another way of saying it works to get around rent controls.

Does IIP.UN own individual condos and/or condo buildings? Do they develop any of their own projects or is entirely a growth by acquisition story?

Is the above approach much different than that of CAR.UN? The metrics for both are very similar. Is IIP.UN different in that it owns somewhat more expensive rental units? Or are the two companies pretty similar?

Back in January, you felt that CAR.UN should be owned if one is interested in yield and IIP.UN would appeal more to someone wanted growth. Is your answer the same today?

Appreciate the insight.

Paul F.
Read Answer Asked by Paul on June 18, 2018
Q: The company looks good and valuation seems reasonable given growth prospects. I've seen your positive comments on it.
However, why are they not paying dividend?
Given recent news regarding Toys R Urs Im wondering if its a low margin business that is purely a volume play. Or is it too dependent on high capex and inventories which lock up cash flows for long periods. Two questions on this
1) What are the net profit margins like in this sector and specifically for Spin master
2) Does Spin Master make good free cash flows and is the FCF growth really good looking back historically? How do you see the future given their international spread
3) Why is the company not paying dividend if it has a stable business with reasonable growth? Is it because of focus on growth over rewarding shareholders?
Read Answer Asked by Sridhar on June 18, 2018
Q: Our 35 year old son parted ways with his financial advisor and I have been chosen to invest the sizeable cash balance in his rrsp. I get that you discourage market timing. Many are talking about a late 2019 correction; who knows. I can average in over 6 months, but that is little help if the above correction happens. I can average in over 18 months; is this practical. I don't want to be the one responsible if he suffers a large draw down.

Based on your years of successful investing, please help me benefit from that experience and comment what you would do in this situation. The etfs mentioned would be the investment vehicles.
Thank you for your input.
Read Answer Asked by Richard on June 18, 2018
Q: Hi, Bloomberg has just reported of Trump administration announcing US$50 Billion worth of tariffs on Chinese goods, effective Today. Some reports mention the figure as US$100 Billion. It is also widely expected that China will retaliate with tariffs on US products. What are the Canadian companies in 5i universe, which may be adversely impacted in terms of their business, due to this looming trade war. This could be due to their production facilities located in US or China or caused by a large part of their business between the two countries or any other side effects. Also, in your view, should this be a reason of concern from investment perspective ? Thanks
Read Answer Asked by rajeev on June 18, 2018
Q: Good day 5i

For my TFSA I presently have a half position in BYD.UN. I just read your comments on PLC and it seems like a good addition to my account.

The usual dilemma ... I have the cash to invest so my decision is between them. Without regard to diversification, for an investor who is looking for growth more than dividend would you suggest to up the Boyd to a full position or introduce a half position in PLC?

Thanks

Peter
Read Answer Asked by Peter on June 18, 2018
Q: What are your thoughts with respect to research pieces that appear on Seeking Alpha or independent blogs ? On the one hand, I know that the writer typically has a position (which usually dovetails with the tone of the article), so I keep that in mind. However, I also know that "professional" research (from underwriting investment banks) is also biased, so you can't win there either. I was looking for information on Pioneering and found a series of fairly comprehensive write ups on a website that I'd never heard of (www.grey-swan.com). Other than the advice that one should take such information with a "grain of salt", what other factors should one be aware of from independent sources such as this ?
Read Answer Asked by Mike on June 18, 2018
Q: Hi 5i,

Need to create a new fixed income/bond position in my portfolio. Looking to allocate holdings (equally?) across the following ETF's: CBO, XBB, ZEF, CPD, and ZHY. Would you recommend this as a good long term strategy or would there be a better ETF combination you'd recommend.

BTW loved your May issue in ETF Fund Update (etffundupdate.ca) on balancing sector allocation.
Read Answer Asked by Christopher on June 18, 2018
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