Investment Q&A

Q: Hi 5I
It has been my experience for the last few years that around the 2ND half of August my portfolio (hopefully we'll diversified both by sector and geographically) sees high volatility and drops only to pick up in September where it left off as nothing happened,! Just curious to know if there is any known "effect" (like a Santa Claus rally type event) that exists or whether it is just an odd recurring feeling that I'm experiencing.
Thanks

Q: Russia has sold most of its US Treasuries and is buying gold hand over fist. Putin is not a nice guy, not stupid either.
Trump is making everything more expensive for people in America with his trade war, and other countries are retaliating, could this is help drive inflation?
The stagflation every one was on about did not materialize because our consumer oriented economies responded to the central banks band aid.
Inflation did not happen as it "should" have after the 2008 crash because interest rates are artificially held down and "money" was printed like it was going out of style.
I feel like the past ten years of bull market maybe be the mother of all "dead cat bounces" and the piper is yet to be paid.
I also wonder if the inflation numbers are artificially low/lagging?
Makes me think I should sell the investment properties and buy more gold or gold mining stocks that would normally be acceptable.
Opinion?
Please take as many questions as you see fit.

Q: Recently there have been discussions regarding a change from quarterly to semi-annual reporting. Do you have an opinion on a change of this magnitude. What affects, both positive and negative, might this have on investors, both small and large?

Q: For safety's sake I believe you recommend not allocating more than 5% to any individual stock in the event it went poorly. What about an ETF such as XTR for the fixed income portion of a portfolio - would 5% still hold as a maximum? If it is higher what percentage would you be comfortable with?

Q: Hello Peter and Ryan - I'm in my retirement years and interested in learning how to use options and how to read charts. Would you or any of your readers have suggestions for good, safe sites - preferably Canadian - but realize there are likely several great US websites.
Thank you for all your guidance.

Q: Hi guys,
Given the strong suggestions Trump will carry through with his threat for a 25% tariff on Canadian autos next month, and the rock solid guarantee this would lead to a huge drop in the Canadian markets, would you delay new investments in Canadian companies for a bit?

Q: Hello: I thought I heard David Driscoll on BNN the other day saying that when holding "cash" for clients in Canadian accounts he buys Bankers acceptance notes. Could you please help me understand what these are and how they compare to other fixed income products such as GICs. Thanks very much
Marilyn

Q: As a small investor I am getting tired of companies issuing more shares to line their pockets ,a lot of times it is for a good purpose but lately it seems they are just cashing in and hurting investors .In the past I would vote on these matters but don't any more when I realized how futile it was.The big pension funds should be holding these boards accountable as they have most of the shares ,are they all scrubbing each others back? When you look at the compensation these ceo's and boards make the greed is getting ridiculous .I think they are making enough without having to raid my bank account. Sorry for the rant but something has to change.

Q: Would you tell me what is the influence on Cdn stocks for those listed on an American Exchange?
Proportion of total daily trades that are American?
Arbitrage that exists?
Will American trades still operate when our TSX is closed for a holiday?
If so, is there any relationship between a closing price on the American Exchange and the next day opening price of the Cdn Exchange?
Why have I never read about this before?
George Murphy

Q: Even though I'm approaching my 81st birthday, I am not, nor have I ever been a fan of the old balanced approach to portfolio composition, although I am quite aware that circumstances for some people may make that approach desirable. Just because I'm old doesn't mean I want bonds (which I don't really understand anyway).
I just spend a half hour comparing your three portfolios and my opinion has been justified in spades. I looked at the 3 year annualized performance, the maximum drawdown, profitable periods, losing periods and the up standard deviation.
The standard deviation for the BE portfolio is higher than the Income portfolio but that's the only metric that I would consider positive. The 3 year annualized performance of the BE is 12.95% vs. 4.51% for the income but most alarming was the maximum drawdown; that's the metric I thought the income portfolio investor would be looking for, that is a minimum drawdown. But the maximum drawdown for the BE is 6.8% compared to that of the income portfolio of 8.59%.
Okay, so here are my questions: Am I wrong in my all equities portfolio even at my age? Am I missing something in my interpretation of the results? And, why would anybody want to go income given the superior numbers of the balanced equity?

Q: I'm planning to retire next year and looking for planning resources. We are about to meet with a fee for service planner, but would also like to explore online planning tools. Can 5i or perhaps the membership suggest a useful tool that I can play around with.
I would also like to mention that our plan is looking much healthier due to investment gains, almost double, made by following 5i recommendations over the last 4 years of membership.
Anytime you're in Winnipeg drop by for a beer.
Cheers and thanks, Peter.

Q: Setting up a dollar cost averaging buy of VGRO. From your experience is there a time of month where stocks tend to under perform, for example, triple witching events at the end of a month?

Q: "Anonymous Trading" what is ,and why is it allowed??
Thanks

Q: On June 23, the Wall Street Journal published an article titled "Forget the 4% Rule: Rethinking Common Retirement Beliefs". Among other issues, the WSJ article states:
“When saving for retirement, calculate your “number”— the amount you’ll need without running a big risk of depleting your savings. When in retirement, spend no more than 4% of your initial balance, adjusted annually for inflation.
Investing in the market has long been considered to be a reliable way to protect one’s assets against inflation. Is adjusting “annually for inflation” really necessary?

Q: I believe you responded to a question about variable vs fixed mortgages awhile ago, however I would appreciate your opinion at this time. I realize the individual $/circumstances but I was wondering what your thoughts would be. Thanks Paul

Q: Hi 5I,
How would a small investor get in to Private equities. This only seems possible for High Net Worth Clients. Is there good Publicly traded company's or ETF's that focus on Private equities. Is this a type of asset class that is recommended to diversify your portofolio.
Thank you

Q: I own shares in Volkswagen. I have received a corporate action notice advising that they are cancelling the Ordinary share sponsored ADR program. I have the option to either receive 2 Unsponsored ordinary share ADRs for each Sponsored ordinary share ADR exchanged or exchange 5 ADRs plus pay any charges or fees per ADR to receive one ordinary share of Volkswagen AG.

Why would a company terminate sponsored ADRs? Would it be better to reveive Unsponsored ADRs or Ordinary shares?

Q: Hi 5i - my kids will start University in 6 and 8 years. In general, when do you start building cash and getting more conservative in anticipation of withdrawing funds? Thanks, Neil

Q: Hi 5i team :
I want to know how resilient is my portfolio to a downturn of the TSX. Can I use the beta value for each stock ?, is this a correct method ?. If so , where can I find the beta values ?, Some brokerages show a value (i.e. tdwaterhouse) . is this value reliable ?, how is the value calculated ?. Thanks for your help

Q: Hello 5i Team

The passive index fund industry is dominated by BlackRock, Vanguard, and State Street. Seen together, these three giant, passive asset managers already constitute the largest shareholder in at least 40 percent of all U.S. listed companies and 88 percent of the S&P 500 firms. What are your thoughts in terms of the big three controlling the corporations and what happens when there is a market correction or meltdown. Would there be any buyers left and also individual stock investors could get into deep trouble.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/30AD689509AAD62F5B677E916C28C4B6/S1469356917000064a.pdf/hidden_power_of_the_big_three_passive_index_funds_reconcentration_of_corporate_ownership_and_new_financial_risk.pdf

Appreciate the good work done by 5i team.

Thanks
Ninad