For our combined portfolio, Portfolio Analytics indicates that our holdings in this sector have dropped to 5.9% (understandably) but PA still suggests a weight of 7% in this sector.
Two questions: (1) In light of sector weakness, which will probably continue for some time, what would be your suggested Communication Services sector weight? (2) Would you endorse some tax-loss selling of BCE and/or T but put the proceeds into another more promising sector?
Thanks as always for your insight.
While we cannot comment on personal sector weightings, think a 4%-6% allocation would do just fine for most investors. Although the performance of both BCE and T is not great, given where they are trading today the downside risk is not overly meaningful, while investors also have some upside optionality in a favourable rate environment. We would be fine with a do-nothing approach for now. Note also one could stray further into the sector, away from this telco companies, as companies such as GOOG and META are also considered in the communications sector and we would be quite comfortable adding either as an alternative.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in META, GOOG.