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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
Not a question- but a response to Kelly's question on financial reading. I found William Bernsteins book "The Four Pillars of Investing" to be very good. It may be out of print- but I'm certain could be found online. Highly recommended.
Regards
Read Answer Asked by Les on March 31, 2014
Q: Good afternoon 5i,

Methanex has been going down ever since it hit an all time high at the beginning of the month. Something is going on and noe news is out. I have been trying to find the insider if they are bying or selling and I have no luck. I am wandering if you guys know something that I don't. Your thought would be graetly appreciated.

Thanks

Paul
Read Answer Asked by Paul on March 31, 2014
Q: Could you please give me 5 or 6 potential takeout candidates. Thanx Robbie
Read Answer Asked by Robert on March 31, 2014
Q: Peter et al,
You have used the term "momentum shift" and "momentum investor" recently. I wonder if you can explain these to this old but still learning investor.
Gary
Read Answer Asked by Gary on March 31, 2014
Q: On March 26th, an article appeared in my local paper written by Martin Pelletier. Martin quoted Hulbert Financial Digest as follows," Corporate Officers and Directors in recent weeks have on average sold six shares of their company stock for every one they bought. This is more than double the long term adjusted ratio since 1990 and is the most pessimistic insiders have been in more than 25 years".

The article also said that research by Bank of America showed that institutional clients have been large net sellers of stocks since mid-February despite receiving large inflows from investors.
This sounds like a pretty significant warning. Could you please provide your thoughts?
Read Answer Asked by Richard on March 31, 2014
Q: AVO's current swoon began on the day their COO was released and an new COO was appointed. The technical chart shows the price today has rallied off support established on November 20th last year. The primary trend (up) is still well established and won't be broken unless prices reach $27 to 27.50. I'm underwater on the stock but won't be a seller unless both support and the trend is broken. If there is a question in here, I guess it is to ask if my thinking can be shared with you.
Read Answer Asked by Fred on March 31, 2014
Q: Hi Peter & 5i: Just a comment on Mike’s question about diversification and allocations across various types of accounts for a given individual: One thing that people forget about sometimes is that the after-tax value of a $5k position in a taxable account or TFSA is “bigger” than an equivalent dollar position inside an RSP, because the whole of the RSP position will subject to tax at the rate equivalent to earned income or interest income upon its withdrawal from the RSP. So in some cases it may look like people are over-weight interest bearing securities in their RSPs when in fact they aren’t. Since (apart from changes in one’s tax bracket) the tax payable on the interest income is the same in a taxable account as it is on the withdrawal from an RSP, there is no loss of a favourable tax treatment by having those securities inside the RSP. Then the potential for one to be in a lower tax bracket at the time of withdrawals from RSPs or RRIFs (the “deferral effect”= growth of pre-tax investments combined with a potentially lower tax bracket and tax rate in retirement due to reduced income) creates the possibility of gaining a favourable tax result on the withdrawal of the interest bearing security. If the RSP is loaded up with dividend and capital gains securities in a bid for significant growth, what one is doing is banking on the benefit of the deferral effect being sufficient to outweigh the relatively favourable tax rates that would otherwise have applied to dividends and capital gains achieved on corresponding (but smaller) investments in a taxable account. That is some tough math to figure out though and it has some unpredictable variables in the equation. Maybe best to have some growth prospects both inside and outside the RSP account, just in case? Thanks!
Read Answer Asked by Lance on March 31, 2014
Q: Tamarack Valley TVE is often on the new highs list. What is
your opinion of this company now?

For me your help is "the icing on the cake". Thank you!
Read Answer Asked by claudette on March 31, 2014
Q: Peter
Some great questions today. Badger has gone from a 2% initial position in my portfolio to a 10.5% position. I thought I had seen you write earlier that you might ride a winner up to 15 % of a portfolio is BAD that kind of a stock. Also I think you also recently mentioned that Badger could now be considered an Industrial does this increase the multiple applied to BAD or is there some other impact(s). Also could you provide the link to your twitter account. I lost it when I traded in my Blackberry. Thank you again for your excellent and timely advice.
Read Answer Asked by Mike on March 31, 2014
Q: Hi, 5i team, This is a comment on Claire's question. I believe risk is a variable concept because of the following two reasons. (1) if you include inflation into the risk equation which is sensible if purchasing power is more important than capital preservation, then nothing is risk free. Bank notes under the mattress may still be there years later but they won't buy as much. (2)The other side of the coin from risk is opportunity. There is such a thing as missed opportunity. Based on these concepts, my risk in the portfolio varies. If, as I believe the next 3-5 years will have a slow growth and lowish inflation, I adjust my fix income portion of the portfolio downward. So, I am 72years old, an income invester with a small pension, my fixed income is down to less than 20%. Apparently, I agree with the latest theory. Thank as ever. Henry
Read Answer Asked by Henry on March 31, 2014
Q: Hi Peter and Team
My 35 year old has transferred his $5300 in RRSp account out of mutual funds. I would like your advice on whether the following is a good strategy to get some growth into this account.
I am considering XIC for half the money and the rest divided among TCN, SGY,and SYZ or DHX. Would you think this wise? or do you think 2 ETF's one US and one Canadaian and if so which ones? Thank-you
Read Answer Asked by Kathy on March 31, 2014
Q: What is your opinion on MXF as means of getting some exposure to precious metals with a little income on the side? Is the payout reasonably secure with this kind of product?
Thanks for the info.
Brian B
Read Answer Asked by Brian on March 31, 2014
Q: Peter: What is your rationale for investing in hedge funds? They don't appear to generate superior returns versus long only portfolios and often carry more risk because there is no loss limits on short positions. Thanks. Michael
Read Answer Asked by Michael on March 31, 2014
Q: BNK the price is off over the last few days. Last comments listed are positive. Do you see this as a slight correction with continued upside to come? Or has something changed?
Read Answer Asked by Douglas on March 31, 2014
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