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Constellation Software Inc. (CSU)
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Shopify Inc. Class A Subordinate Voting Shares (SHOP)
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Topicus.com Inc. (TOI)
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Lumine Group Inc. (LMN)
Q: Hello,
We are retired investors and own all three names in the group, with CSU - 13.5%, LMN - 4% and TOI - 3.5% weights. SHOP is the only other Canadian Tech at 5.5%, in addition to US Large caps tech holdings at 7%. So Technology sector is >30% of our combined portfolios. There is enough income through dividends and pensions.
Despite trimming CSU by more than 50%, over past several years, its weight continues to grow. ( Great !! )
1. Do you consider > 30% Tech holdings reasonable as a sector allocation, TODAY, for an investor ( with moderate to high risk tolerance ). If not, in what order would you trim ?
2. Would you be comfortable with 20% of portfolio allocated to Constellation Software family, more specifically 13-15% to CSU and what would be your high watermark for its weight. ( We particularly like CSU for its steady Eddie profile and prospects of more spin offs)
Thank You
We are retired investors and own all three names in the group, with CSU - 13.5%, LMN - 4% and TOI - 3.5% weights. SHOP is the only other Canadian Tech at 5.5%, in addition to US Large caps tech holdings at 7%. So Technology sector is >30% of our combined portfolios. There is enough income through dividends and pensions.
Despite trimming CSU by more than 50%, over past several years, its weight continues to grow. ( Great !! )
1. Do you consider > 30% Tech holdings reasonable as a sector allocation, TODAY, for an investor ( with moderate to high risk tolerance ). If not, in what order would you trim ?
2. Would you be comfortable with 20% of portfolio allocated to Constellation Software family, more specifically 13-15% to CSU and what would be your high watermark for its weight. ( We particularly like CSU for its steady Eddie profile and prospects of more spin offs)
Thank You
5i Research Answer:
We would be fine with 30%+ tech for a long term, higher-risk investor. The S&P 500 itself is 30.75% today. 2) Allocations need to be personal, and 13%+ of anything needs to be considered 'High', but WE would be fine with it. Generally, we assume ANY stock could decline 50%, ANYTIME. Thus, a 13% position could represent a 6.5% portfolio decline in an instant. One needs to be comfortable with that risk.