Investment Q&A

Q: I plan to reduce my Financial Services exposure. I would like your opinion on whether I should sell BNS or TD or half of each (all things being equal, my preference would be to reduce the number of holdings by one).

Q: 3:44 PM 5/8/2019
I really apreciated the TSX60 list with US revenue percent for each company. I do however have some questions. Several of the numbers were a surprise.

1. We are told that TD Bank is 50% or more American with a branch on almost every corner in many large US cities but your list shows only 26% of revenue is derived from the US. Can you confirm this number as it makes a big difference to my investing decision.

2. I see Emera has 70% of income from the US which seems a little high to me as I understood that Emera was about evenly balanced between Canada and the US.

3. Fortis with huge investments in ITC in Michigan and 6 adjacent states [the largest independent electricity transmission company in the United States], in Central Hudson Gas and Electric and in UNS in Arizona shows just 9% US income. Surely this figure is sadly out of date.

Can we trust the rest of the figures in the list?

Thank you.............. Paul K

Q: Hello,
Our financial weighting is still quite a bit higher than you suggest for a portfolio...so my plan is to sell our (underwater) CIX as well as one or two of our (positive) bank stocks. Appreciate your ranking and thoughts regarding our bank holdings noted above. Thank you.

Q: I am just starting to invest into my TFSA and will not need the assets for at least 7 to 10 years. I would like growth and can say I am a moderate risk taker. I have small positions in the four stocks and I was also contemplating a position in BCE. Would you be able to suggest at least four other stocks or etf's to diversity my account.

Q: I have all these stocks in my non-registered account, I have some money to deploy. My two smallest holdings are CP and WCN, should I add to either one or would you suggest a new stock?

Q: Buy shares in TD and BNS this week or wait until after bank earnings week May 23-30? On the one hand banks appear to be breaking out now, on the other hand if the shorts are right and bank prices drop in value on soft earnings there might be a better opportunity end of May. Two sides to this stratagem. What would you do?

Q: I've been researching large cap high quality dividend growth companies with a >2% dividend yield for cash positions in registered and non registered accounts. For the most part the Canadian banks are the only ones that are attractive on valuation, but I currently have a 20% position. I've love to buy more of CNR, T, FTS, AQN, CAR.UN, TRP but they have run up quite a lot. One strategy is to keep buying the banks to a 30% weighting and reduce back to 20% once valuations get to 13x forward earnings. Two questions, 1. what do you think about this idea 2. In case I have missed some ideas, what are 5 Canadian names outside of the banks you would recommend with decent valuations? Thank-you.

Q: Hi Peter and 5i team,
We have 11% cash in our grandsons RESP (age 5) and we want to deploy the money. The listed stocks are currently in his account. What would be a good choice for a new holding or top up a current holding. Thank you for your great advice in the past.

Q: Knowing Sapiens of 5i - 2 questions - do you think that over the next year some increase in exposure to emerging markets is appropriate and would you use VEE or XEC if so and IEMG for US dollar exposure or another US ETF - second might a reduction of exposure to Cdn banks seem reasonable over the next year (ie sell some TD and maybe some BNS) and buy some SLF or another financial Cdn equity for some greater torque - in other words do you suspect the banks may stagnate a bit over the next year and become income only to some extent - best guess please - appreciate your instincts - Ken of Yonge and Eg

Q: Hi 5i and team
Thanks for your sound advice during this last market correction. It made me finally understand why it's important to concentrate on limiting losses rather than going strictly for gains. I need to eliminate two Financials from portfolio. It is in a RRSP account. I do prefer a combination of income and Growth. Thanks for your help.
Gilles

Q: Using your portfolio analytics we find we are underweight in Financials and need to add to these stocks. The percentages from highest to lowest are SLF, BNS, TD, GSY, VB. Which ones would you add to first. These are held in a RRSP account with a 5 year timeframe.
Thank You

Q: I am finding your 'Portfolio Analytics' to be an outstanding service. The imbalances within my portfolios are abundantly clear.
I am overweight financials with
TD - 3.55%
JPM - 5.19%
BAC - 6.77%
GSY - 1.29%
CXI - 0.71%
All stocks show a decent profit except for CXI which is down 23%.
I have fairly high risk tolerance and I look for reasonable growth. I would appreciate your recommendations on how to reduce my financials by approximately 3%

Q: Have any of the big 6 Canadian banks ever cut their dividends and if yes can you please provide specifics as to when, by what magnitude.
Many thanks for your service,
Stevr

Q: Hi,

Do you think the US feds recent comments regarding slowing worldwide growth and less rate hikes will affect the Canadian Banks as well? If so what effect?

Q: What's ur outlook for TD shorter term? Is there more shorting on the stock?
Thank you

Q: Hi 5i Team,

I hold about 5% in each of these companies, with the rest in indices (XAW, VCN) and cash. Do you have any recommendations for other companies I should be looking at to diversify? Thanks for the help!

Q: With the possible exception of BMO, the Big Five banks seem to be hitting a plateau. At the same time, there's talk of moderating interest rates. But shouldn't lower rates be a stimulus for banks' business - mortages, etc.? I thought it was the insurance companies that benefited from higher rates. Or is the apparent tapering-off of banks' growth just a reversion-to-the-mean phenomenon?

Q: Does the can - us dollar have an impact on Canadian bank prices? Say the Can$ loses 10% would that have a significant effect on the stock price?

Q: I have owned JPM, TD and BNS for a few years. The thinking was it would enable me to spread my investments outside of Canada. Given the lacklustre performance of JPM and the fact that TD has significant US assets and BNS is international, I am thinking of swapping JPM for VISA (or MC if you think that is better) to get financial assets that may act just a bit differently than the banks. Does this thesis make sense?

Appreciate your insight.

Paul F.

Q: I hold the above banks. Which would you hold right now and which might you liquidate, of you needed the finds and why?

Thanks for all your support,
Mark