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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 have owned these Bond ETF's for the last few years and have seen the unit prices drift lower with the rising rate environment. If I had bought the bonds directly the maturity date would restore the capital. Does the same thing happen within the ETF's to the same effect? How doe s it play out over time?
Thanks
Paul
Read Answer Asked by Paul on January 29, 2018
Q: Do you feel every portfolio should have at least one Gold Company?

What is the importance of owning a gold company? The long term track record of most Gold Mining companies does't look that compelling. I know that you have mentioned it as a hedge/protection, but even in 2009 Gold companies went down with the rest of the market.

Is just to ensure proper diversification?

When I look at AEM compared to FNV I like the past performance of FNV, but does it provide the same diversification

If it is your recommendation to have as part of any well constructed portfolio, what percentage should be with a Gold company. Just one full position?

Thanks as always.
Read Answer Asked by Colin on January 29, 2018
Q: My advisor has recommended the following "best current" additions to my diversified portfolio. I value your opinions higher. ZUB RUF.UN ACR.UN WIR.U. IEMG.
In your opinion are these "best to buy" in their areas, and if not, what are your suggestions for better ones? Thank you for your continuing guidance.
Read Answer Asked by Harold on January 29, 2018
Q: Could you please take look at this rather interesting 'Gaming' concern.
JP (Jackpot Digital Inc. ) They have been in the electronic / digital gaming equipment industry for a few years and therefore have a history of design and production. They have an interesting new 84" G4 multiplayer unit that is garnering positive comments, awards and sales.
Your usual considered overview please. Thank you.
Read Answer Asked by Ryczard on January 29, 2018
Q: Hello 5i team,

Your January update (like everything else that you do) was much appreciated.

Over the past decade, whereas I would have been satisfied with a 7% compound annual return in order to meet my income needs, my RRIF portfolio registered a growth rate of 15% compound p.a. That’s great! However, in the last 3 years while I kept expecting a lower return, the actual returns kept confirming the long term trend.
Once again, if the estimated returns for the next 15 years (age 90) were to be 7% annually, I would be very happy.
This scenario would be my “base case”

However, we should expect a recession during this span of time; it is not a matter of “if” but “when”.
In the past recessions, most of the following indicators (yield curve, inflation trends, labour market, credit/liquidity situation, ISM index, earnings quality and housing market) painted a recessionary picture. The average market drop of the last 4 recessions was around 40%, the average duration around 1 year and the average recovery period around 2 years.
At present, and for now; all of these indicators are in an expansionary mode.

What should I do to prepare for or react to the upcoming recession hits?

1. I could ride the recession (stay invested); in this scenario, my annual income would be 21% lower than in the base case.

2. I could exit after the start of the recession (while closely observing the leading indicators). Incur a 20% drop in the value of my portfolio (vs 40%), partially miss the first part of the recovery and obtain 15% (vs assumed 33%) and on to the second leg 25% recovery. In this scenario, my annual income would be 4% lower than in the base case. This outcome would be quite acceptable; it’s just like a rounding error.

3. I could also try to be “cute” and exit just before the start of the recession. This scenario would be a “non-starter” because it implies “timing the market”. Imagine if I exited the market in early 2019 and the recession did not hit until 2 years later……

I’m therefore leaning towards scenario 2. What do you think? What do you suggest?

Thanks, as always,

Antoine
Read Answer Asked by Antoine on January 29, 2018
Q: Hello 5i,
This question may not be in your mandate but i thought i would run it by you to see if yoh have any comment. It is about "green bonds". They seem to help the environmsnt and they seem to have a good return. But i was wondering how safe they are? The brochuresays they are secured by revenu produced by the companies lent to. The name of the company is CoPower. ihttps://copower.me/en/products Here is a blurb from their website:
Secured by real assets

Our Green Bonds are backed by operational clean energy projects that earn steady returns from energy savings or the sale of clean energy.

Expertly Managed

Each project loan backing the Green Bonds is vetted and structured by our team of experts following a rigorous due diligence process.
Competitive Returns

Earn up to 5% annually by investing in markets under-served by mainstream finance and earn steady income with quarterly payments.
Read Answer Asked by joseph on January 29, 2018
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