Investment Q&A

Q: Greetings 5i,

I realize you cannot give individual portfolio advice on this forum, but was hoping to ask a question regarding portfolio structure and exposures (rather than on the holdings themselves). However, if this question is inappropriate for the public forum, please disregard. If appropriate, please deduct as many credits as you see fit.

My stock portfolio consists of 30 holdings in the following structure:

- 19 Canadian positions covering all major sectors of the TSX (16 large cap dividend payers and 3 small cap "higher risk" names).

- 5 positions held in US Dollars (all large cap "blue chip" names) for currency diversification and to augment sectors I feel are far stronger in the US (Healthcare, Tech, etc.)

- 4 equity ETF's covering USA, Developed Europe, Developed Asia, and Emerging
Markets (1 ETF per region).

- 2 bond ETF's covering Canada and the US (1 ETF per region)

- No single holding exceeds a 5% weighting

I am 36 years old, debt free, conservative (although not totally adverse to risk), and consider myself a "buy and hold" investor.

In addition to the aforementioned stocks, my portfolio includes GIC's, gold bullion, and a small cash position in both Canadian and US Dollars.

In general, does this structure seem appropriate to you? Do you feel as if I have missed some region(s) and/or investment type(s)? Is there anything you would suggest for further diversification?

Thank you.

Q: Patriot One has just issued some warrants. I have never purchased warrants, but have a general understanding of how they work. I can buy them easily enough from my online broker. Are they just as easy to sell (considering there is enough volume)? I'm just not sure on the exit strategy. Thanks. Really enjoy the questions asked, and responses received.

Q: I am new to this forum but have been 'investing' faithfully for over 30 years (what that really means is that I have been funding both mutual funds and the investment advisor buying them - last year that was $9,000 for the investor for me and my husband combined for the mutual funds to earn net 4.4% (the SandP/TSX was at 17.51). I'm tired of the high anxiety fear factor he generates for 4.4%. For the fee, he can earn us between 2 and 4% in coming years and insists this is a good thing.
Why wouldn't I buy Berkshire Hathaway A with the money currently invested in mutual funds and the advisor and invest on my own using a couple of your portfolio models with the money I have stashed? At this stage I am 56 years old so not a big risk taker and want to preserve what I/we have. With thanks, Wendy

Q: Do you think REIT's should be owned in ones portfolio? Does a 10% weighting seem to much? Also can you rate the following from best to worst as I am looking to get rid of one. GRT, REI and CRT.
Thanks

Q: Peter and His Wonder Team
I accept the fact that you cannot time the market and that no theory or metric is always right or correct. If so we would all be rich! Ha!Ha! However, I do try to minimize risk by having the odds in my favour. So here is the question ...in your experience what tends to be the worst and best months of the year for stocks? For example I notice that August and September many stocks go sideways or drift down because buyers disappear. On the other hand in February, March and April they seem to do there best and peek. Your observations please! Is there any correlation between large and small cap? Thanks again for your great service!
Dr.Ernest Rivait

Q: Hi Team,

I am a real estate investor and I have been for the last 15 years. Real estate is my passion and I enjoy it very much. I am trying to balance this with investing in the stock market. I enjoy researching companies, but I don't want stocks to take up the majority of my team. Is it best to construct a portfolio of high quality, low expense ETFs and add to it monthly or quarterly? Or is it better to follow a model portfolio like 5i or invests in particular companies. Less risk of picking a wrong stock in the ETF approach, but potentially also less reward. Real estae is still going to be my focus and I plan to use the real estate to fund my retirement.

Thanks for your help,
Jason

Q: Preferred shares usually have an issue price of $25. Would it be correct to assume that in a rising interest rate environment CPD has a chance to climb towards the $25 range?

Dumb question?

Carl

Q: I am trying to clean up my husband's portfolio but am missing some ACB data. Specifically, when I checked his 2000 investment statement, he had Janus Global Equity Fund, but now he doesn't have this holding. However, he has a Mackenzie fund (MFC1055) that he didn't remember buying. I am thinking there was a fund merger at some point. Where can I find information about historical fund mergers?

Q: There is a lot of noise about how expensive stock markets are and that we are overdue for a significant correction, particularly in the US. But if I look at my US stock, P/E's are very reasonable (see AAPL), and less than ten in some cases (see GILD).
What gives?

Q: I am a relatively new investor and want to understand how the tax loss function works. I have a few questions.

What is the standard taxation rate for capital gains?

How is the tax loss calculated? Is it based on the average cost of purchases or the last purchase or some other formula

I am assuming that you can buy back any stock that you have sold for a tax loss after 30 days. Am I right?

I look forward to your answers

Q: Inflation is low and BOC rates are still at very low rates - money is cheap to get. IMHO the only place to make money is in the stock market, but seniors want low risk and for many decades placed money in high yielding low risk investments - GICs. Recently I applied for and received a 5 year closed mortgage at 2.49%, which means rates will stay low for at least five years. Our population is aging and that segment of investors like low risk, which leads to lower returns.

My question, when do you think or believe interest rates will rise to a new normal and therefore the stock market will see a competition for money from seniors? Therefore, by default lower returns in the stock market.

As always thanks for your comments.

Clayton

Q: MGM:NYSE, owner of the Mandalay Bay hotel, where last night's massacre took place, is slated to open down 5% this morning. At the risk of sounding insensitive, in your experience, are these declines knee jerk reactions that can rebound quickly? Would this be a buying opportunity to add to my existing position?
My condolences to all victims and their families.
Thank you,
Karim

Q: What is your outlook of USD for next 6 to 12 months

Q: It was mentioned " Money Saver is at print now). I wish it is a real "print" version which I deeply miss. I think you may mean that it will be ready soon on line. However, please tell me, really. is there truly a print version?
Thank you
Stanley

Q: Hope this is not to vague, what would be an acceptable "percentage of shares short in a company"

Q: Hi, you have mentioned price momentum in determining time of trade. What metric do you recommend ? Thanks always.

Q: In discussing buying CSU in less-than-board-lot quantities, you said that "there can be some higher bid/ask spreads, so one needs to enter trade orders carefully." Perhaps this needs to be stated more plainly: *if* you want to buy less than a board lot, *then* set a limit price (i.e., don't buy 'at market'.)

But I know of no other constraint on small-lot trading. I have bought single shares of GOOG and AMZN with the same trading fees as would apply to penny stocks, and been filled at or below my limit price. For that matter, I now find it easier to scale my bids by dollar value than by share count. Much of the mythology around board lot trading seems to be just that: a myth.

Q: Peter and His Wonder Team
I do not understand Bitcoins...Could you please explain the concept in simple terms. Where and how would a person purchase them? Secondly, how do you use or spend them? Thanks!
Dr.Ernest Rivait

Q: Hi, recently your answer touches tax loss selling. Are there many more stocks that will fall into this category ? Thanks always.

Q: In addition to Canadian stocks, I hold a few ETFs for US and International exposure. In order to get a clear understanding of my sector allocations, I would like to incorporate the sector contributions from these ETFs. But when I look at VDU, for example, instead of consumer cyclicals and consumer staples, it lists consumer goods and consumer services. Do you have a suggestion for how I could incorporate these different categories into my sector allocations?

Thanks.

Alan