Investment Q&A

Q: On Prefblog there's been an ongoing discussion of what the Govt. of Canada 5 year benchmark means to all the 5 year reset preferreds and which 5 year rate to use, with no clear agreement. Things are at a standstill presently because it seems no-one including blogger James Hymas (a former contributor to CMS) has access to a Bloomberg terminal where the answer may lie, or at least the discussion will continue. I see there have been a couple of questions on this issue on the 5i board also. Perhaps you could help out Mr. H. and pref investors like me too by sending him the Bloomberg screenshot he requests, if you can get past the Bloomberg rots brains comment (I'm certain said tongue in cheek).

I find it very difficult to believe that this problem has only surfaced now and not years ago. Here's the link (scroll to top):

http://prefblog.com/?p=27931#comment-193197

Q: Regarding the question of yesterday regarding owning a portfolio of 20 stocks vs at ETF that holds 500, thanks for the great response. I am curious, would your answer differ if the primary purpose of the portfolio was to generate income? i.e more holdings = less risk to the income stream? Thanks

Q: Hello 5i
On may either 4 or 10 of 2014 you gave What you thought would be a good example of a portfolio for a middle aged investor. I thought it was good. A further question on that, though. You give the percentages each sector should comprise. But, my question is how many stocks in each sector should one hold?
Thanks

Q: Hello Team Hope you can help me understand how to read the performance charts on the ishares website. If I take XIC for example and look at the performance chart it shows the following
YTD (%) 1y (%) 3y (%) 5y (%) 10y (%) Incept (%)
0.55 10.16 8.63 8.58 7.78 6.63 . Hopefully the chart lined up. So under the 5yr return it shows 8.58%. Is that an avg return per yr of 8.58 x 5=42.5% total return or is does it mean a total return of 8.58 for the last 5 yrs. And does that include the mgmnt fee?
Thank you for your hard work

Q: Hello: I'm wondering what you can tell me about Emerson Electric. It's prospects for the next year or two? Thanks

Q: Hi team:
this stock went up to $ 33, now pulled back to $ 30
Is there any reason (fundamental) for the pull-back ?
last time someone asked about cWT.un was in Oct last year
I made a 40% profit, buy, hold or sell ? I like the dividend
thanks!

Q: What do you think the impact of EFG's claim could be? See also VSN's opinion below. Thanks, David.

The Ontario Superior Court ruled that Energy Fundamentals Group Inc. (EFG) "has a valid option to acquire up to 20% of Veresen's equity interest in the Jordan Cove liquefied natural gas terminal and related assets."

Veresen's said Feb 26: "Veresen continues to believe that the existence of the option and whether or not it is exercised will have no material impact on the Company."

Q: What is your opinion of this company? It's PE ratio looks attractive and it has been able to deliver consistent results over time. Is my first impression accurate? Does it deserve a second look?

Thanks a million...Alastair Allan

Q: Are there any Canadian ETFs that are like CDZ (dividend aristocrats) or high dividend payers for the developing markets and emerging markets. And if not, in US$.

I believe CYH is for developed markets high dividend payers.

Q: Can you offer any information on this company?

Thanks in advance

Ernest

Q: Hi Peter,
I wondered if it would be possible to have a list of your best recommendation updated regularly. I understand the model portfolios have a similar role, but for example have a more focused list (10-15 stocks) of high convictions stocks updated monthly would be interesting.

Thank you for your good work.

Q: With your help my TSFA has grown from a hobby to something a little more serious . Thankyou. I have had ESL and DH for a year and a half, DSG for 2 yrs.GIB.A for 5 mo. Also in TFSA
are MFC TD CXI WCP. The 4 tech stocks now make 55 percent
of this. Every time I think of trimming back (probably ESL )
they keep going up. What do you think ? If I sold anything I
don"t know what I would buy anyway. Have XTC ZUH ZLB and BIN
in my RRSP.
Thanks again for your time .Without your help I probably
wouldn,t worry about this stock market business.

Larry

Q: heard a very positive report about them---their restructuring and management...Do you have any recent info on them?

Q: Hi 5i team,

I find the retail investor rarely has a chance initially regarding large hyped IPOs. However, it would seem that watching the stock months (or a year) out there is often a chance to buy in. Timing that is difficult. Case and point Twitter. Will it eventually go up (I would say yes based on broad use of the app). I have watched Facebook where the stock took off mid 2012 and LinkedIn (stock up early 2013). In both cases it seemed if you bought the stock once it raised above it's IPO price you would be successful. Zynga acted contrary to this hypothesis.

So with 2015 possibly marking the entry of hyped IPOs Uber, AirBNB, Dropbox and Shakeshack. Any advice in general?

Q: Dear Gentlemen,
I am in the process to rebalance my PF, based on 5I Summary list, I have companies classified in Services, Consumer Goods, and Financial Service, I assume that these 3 sectors are not in the 10 TSX sectors.
What do you suggest for these 3 sectors, to merge them them with other sectors or keep them and allow % . If so how much ?
Thanks Best regards.
Quote : On average, we would suggest a portfolio similar to this:
Utilities 15%; Financials 15%; Energy 10%; Materials 5%; Telecom 10%, Industrials 10%; Healthcare 5%; Info Tech 10%; Cons. Discretionary 5%; Consumers Staples 15%.

Q: Hi Peter and team, how would rate Boardwalk compare to Chartwell CHS.un and HR.un? Thanks, Gervais

Q: FC has been paying the same monthly distribution of $0.078 since inception in 1999. The dividend yield is almost always in the 7-8% range and balance sheet appears strong. I'd appreciate your comments on FC going forward and if it would not be a suitable add to your diversified Income Model Portfolio.

Q: What are the risks associated with the shortage of the US dollars around the world? I hear that much of the international money borrowed are in US dollars. Reimbursing this money will cost more as US dollar appreciate. What will be the macro effect of this will be on the different markets? And how an investor can best prevent himself against this downturn?
Thanks. Jean

Q: Robert's Feb 26 question about the arbitrage opportunity in BCE's acquisition of Glentel inspired me to try to calculate the downside risk of buying GLN now. Please correct me if I'm off base in my math. Assuming you can acquire GLN shares now at $24 and a 50/50 cash/stock split on closing, the BCE share price would need to fall to $43.23 [26.50 / 2 = 13.50] + [42.23 x .4974 / 2 = 10.50] = 24.00 total to eliminate any gain. If you were to receive all shares and no cash, break even would be $48.26 [48.26 x .4974 = 24.00]. It's possible BCE could re-visit the $48 range, where it was for much of 2014, but dropping to $43 would seem less likely. As a side note, I see that over 8 million BCE shares traded right at the bell on Friday. Average daily volume is around 2.5 million. Was this simply end of month fund re-balancing?

Q: Hi 5i Team,
I am a bit confused. I own each of these fixed income instruments. All but the CPD have moved upwards in the past six months. Why does CPD not move with the bonds? If I were to add to this group, should I avoid CPD or average down on it? Long term horizon. Should I add to the others?