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Investment Q&A

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Q: I don't know if this question comes under your umbrella. It concerns money borrowed to invest, with the aim to claim the interest for tax back. I have done a Google check but i am not sure whether all loans can be used this way. currenly I use a small margin credit on my accounts, which comes to 3.75 per cent. I know that I can do much better than that, if i borrow on my house. But, would such a loan be seen as tax deductible for investing services.
thanks
Read Answer Asked by joseph on October 04, 2016
Q: I am supposed to increase my fixed income exposure via one or more ETFs. I see you usually recommend CBO, but what about VSC. VSC seems to be a better performer over the last 1, 3 and 5 year periods. Which is better in your opinion and why?

I have about $21K in cash in an RRSP to invest in fixed income products. Should I buy two or 3 ETFs, or all in CBO or VSC is sufficient?

Should I buy now, or wait until after the US election, or even after FED meeting in December to see if they increase interest rates? Does it really matter at this time?

p.s. I have been invested in over 90% equities for the last 25 years (now 53 years old) so I am struggling to get myself to buy fixed income products. I am reluctantly buying fixed income products only because I know I am supposed to have better asset allocation and not be so heavily equity focused, but today the returns are so small I wonder if I would just be better off buying stocks like BCE, T, SLF, FTS, IPL, PPL that pay around 4% dividend.
Read Answer Asked by Paul on October 04, 2016
Q: I have found that my best returns are when I reduce my portfolio size to 8-10 stocks.I know that according to almost all experts that my portfolio would not be properly diversified.I find that a investor such as myself can not spend the amount of time needed to keep up to a 20 stock portfolio.
The easy answer of course is to hire someone for my investments,but I have unfortunately been burned twice by investment professionals,and unwilling to strike out the third time.
Is there anything wrong with keeping a 8-10 stock portfolio, where I can keep a close watch on the news and the financials.
I personally think that is why your site is so helpful because the average investor do not have the resources and staff of a professional money manager.
Read Answer Asked by Randy on October 04, 2016
Q: Hi 5i team!! I am at a conference in Arizona, and just the feeling I get polling my colleagues, all of whom are academics, the general consensus is that Trump will be the next US president. Hillary is not a favorite because of allegedly crooked behaviour which I was unaware of. The way I look at it, neither one, Trump or Clinton are a good choice but that's a moot point. So, to my question...what do you suggest.. If the Donald gets in ...should we sit tight on your suggested portfolios or sell certain stocks, or sell everything and head for the hills ? Which stocks will do poorly and which ones may do well? Cheers, Tamara
Read Answer Asked by Tamara on October 03, 2016
Q: Hi Folks, have been wanting to put some of my investments into US funds.
Recently read an article by John Heinzel in the Globe and Mail stating that the best way to invest in US funds is through an RRSP or RRIF which seemed to make sense from a tax point of view.
When I contacted my broker, Scotia iTrade, I was told that only Canadian dollars not US dollars could be in my RRIF account.
Could you please give me your opinion as to which is correct and if Heinzel is correct, how is it done?
Many, many, thanks for all you do. I certainly would not have done as well over the last few years, as I have being a member of 5I. I pass your name onto all my investor friends.
Congrats to your team.

Hal
Read Answer Asked by Harold on October 03, 2016
Q: I feel considerable empathy for the person who's throwing in the towel on HCG, as I have watched my holding plunge by 10, 20, 30, 40 and now 50%. i have decided to take the advice of the poster suggesting ignoring the day to day noise; I've gone a step farther and decided to treat it as "lost" money now that it's become a fairly insignificant portion of my portfolio. I'm not at a stage in my life where I can wait for a seriously long term recovery, but thanks to you, I'm sufficiently diversified that I do't need to.

On another note: an earlier poster was looking for an ETF with a lower financial holding. At 23%, I think CDZ is lower than most.
Read Answer Asked by M.S. on October 03, 2016
Q: My friends who invest in the housing I.e rental apartments/townhouses seem to be making outsize returns...I personally feel this is because their purchases are highly leveraged. They require only a 20 to 25% down payment to buy a rental property. I personally think it is much safer and easier using a diversified groups of stocks.. especially with the great advise from 5i.but to make outsized returns one needs to borrow money..Banks give preferential rates for home purchases.whereas equity purchases are treated as riskier investments.What are your thoughts on this? I would also like it if your members weigh in on this subject.
Read Answer Asked by Shyam on September 29, 2016
Q: When calculating sector distribution I include all equities, both foreign and domestic. Have I missed the point, since sector correlation will be different overseas relative to US/Canada, except for cases such as commodities that are global in nature. With that in mind, how should I break down the analysis? 1. Domestic, US and international each separately, 2. combine US/domestic and treat international separately, 3. don't bother tracking international sector allocation (mostly market ETFs). I tend to use US companies to fill sector gaps where Canada is weak (e.g. health care).I also wonder how to treat the US megacap multinationals.
Read Answer Asked by Benjamin on September 28, 2016
Q: Hi, are the 5i growth, income, and balanced portfolios better suited for non-registered or registered (RRSP and TFSA) accounts or a combination thereof? I currently only have registered investments which, today, are a combination of CDN & US stocks and ETFs. Thanks!
Read Answer Asked by Mark on September 28, 2016
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