Investment Q&A

Q: Regarding Kim's question about fees her broker might earn from putting her in ETFs. Why not simply ask the broker how he/she gets paid. It's a fair question. If the broker does not provide a clear answer, perhaps it is time to find broker who will.
Guy R.

Q: I know it is difficult to predict the future of currencies. But I am still interested in your opinion on the Canadian to US dollar exchange. With the current price of oil, do you think the Canadian dollar is about as high as it will get, relative to the US dollar, for the next couple of years? Thanks!

Q: I didn't know where to post my comment as the forum sections seems very inactive.

What this post is about is the article you sent us entitled: 'The Portfolio Management Assumptions that Harm Clients'.

Very excellent article IMHO. I am not a portfolio rebalancer and never have been. In his article he writes and I quote:

"We may rebalance periodically – quarterly for example – or we may set percentage boundaries around each asset class and rebalance when they are exceeded. Either way, the underlying assumption is that our target allocation is better than the allocation the markets have given us.

Research on the value of rebalancing suggests that it has little ability to increase returns or decrease risk. Whatever utility exists depends on factors such as time period, the direction of the market and the relative future expected returns of the asset classes being rebalanced. Yet few, if any, of us take these factors into account in developing our rebalancing strategies. Instead, we employ simple, mechanical rebalancing strategies that add little or no value and may even detract from long-term performance.

The only thing we can be sure about is that our rebalancing strategies result in transaction and tax costs."

5i constantly encourages/recommends that we rebalance our holdings especially when one becomes more weighted than say approx. 5%.

I feel the writer has a very interesting POV and would like to ask you to let us know how you feel about his POV on rebalancing.

Q: Since we have "bail-in" legislation in Canada and since, as people whom deposit savings in banks, we are considered "investors" in those banks and subject to "bail-ins", how would cash simply left in brokerage accounts be treated in "bail-ins"? As we receive zero interest on cash in brokerage accounts, we could not be considered "investors". Seems a safer place to hold cash than a bank account. Thanks.

Q: Can you please comment on the pros and cons of using a put write strategy to generate income, as these 2 funds do?

Thanks

Q: I see Apple is down in after market or pre trading. What does that mean and can a retail investor have access to that? Many feel that the market moves for people in the know before us mere mortals. These types of things don't encourage investment if people think rightly or wrongly that the market is rigged.

Charlie

Q: If a Stock has an Ex-Date of Tomorrow & I buy it today, will I still avail of the Dividend? OR, will it be denied because I technically will NOT own the stock until the Transaction Completes in a couple of Days?

Many thanks as always!

Q: Hi Peter! You have often made the point that every trade has an opposing view. If I hold a mutual fund or ETF that is currency hedged does that mean that someone on the other side is betting against my decision to hedge the fund or ETF. I lack a proper understanding of this situation and would appreciate your clarification. Ian

Q: Hi,
I have taken up a few half positions in stocks with the following details in my portfolio:
Full position = 4% of total portfolio = $6400
Half position = 2% of total portfolio = $3200
Transaction fee = $9.97

For full positions, my strategy as been to consider trimming them if they get $2000 or more above a full position. I will consider adding to them if they drop at least $1500 to $2000 below a full position. This keeps my transaction fee at about 0.5% to 0.75%

This same strategy with half positions will cost me more on a percentage basis. Should I ignore this and just be happy I'm diversified, or would you employ a different strategy? My current half positions are HCG, CXI, GUD, and PHM.

Q: Hi, 5i.

What are your top picks for fixed income at this time? I have a small position in XBB and that's it.

Thank you,
Robert

Q: Hi, 5i.

What are your top picks for consumer staples at this time?

Thank you,
Robert

Q: Because of my age and possible future need for income, amount and security, I am pondering the addition of the following ETF’s. I am indicating the present and after purchase weighting in my portfolio. ZWU ( 3% - 5%), XHY (1% - 3%), XTR (0% - 5%). My portfolio is reasonably well
diversified with about 95% blue chip (28) common shares. Can you please comment on the appropriateness of my proposed purchases, given your limited knowledge of my portfolio.

The composition of XTR i shares includes other I share ETF’s so if I were to purchase this security I would be effectively duplicating management fees and further increase my exposure to XHY, which is held in XTR.

Thank you for considering this questions

Q: Not a question on a stock but a comment on the recent changes.

In having the option to receive "email updates daily", I'm assuming you mean that questions are filtered to your watchlist, and are not actually sent to one's inbox email. Is that correct?

When I click on my Watchlist, I see all the recent questions related to those I've marked -- but I'm not actually receiving any updates via e-mail.

Please clarify how this for me. Thank you.

Q: This might be a tough question but I am pretty sure you would have seen it before. I need strategic help. I can’t seem to sell a losing stock. I am paralyzed by the fear that by selling I lock in the loss. Or that at the current price it is actually the time to buy the stock.
Surprisingly even with this list of losers my portfolio is actually up. Much to the credit of 5i. So I don’t need to sell but can’t help thinking that the money could be put to better use. I am also pretty sure that there could be different advice for each stock. But anyway here is my list. What do you think? Sell or hold?
Please take as many question points as you feel is appropriate.
TMA -21%
GH -20%
GS -30%
HLF -33%
PM -25%
WEF -20%
AYA – 45%
CXR -34%
PHM – 79%

Q: Hi,

I recently opened an RESP account for my daughter and am looking for advice on a few ETFs to purchase that provide some long term growth potential, while being appropriately diversified.

Given that i an just starting to save in this account, I'm starting from a small balance, roughly $2,000, i would prefer to only purchase a couple ETFs to limit transaction costs. I have a relatively long time horizon (18 years).

Thanks

Q: Just wondering if the next step in website improvements would be to post the real time share prices for stocks in our watchlist much the same as the globe investor website. I have used this site for many years for this purpose however over time they have reduced the amount of information you can get on any particular company. I would much rather pay you the fee as your service is far superior to the information that they offer.

Thanks

Q: What is the differences between HVU and HUV? I'm bearish towards the markets and looking for something to buy for a short term holding period of 2-4 months as added insurance. Any other recommendations? Thanks

Q: Is 5i planning any educational meetings/conferences in 2016/17? If so, when would the details be available? And if not, what recommendations do you have for ongoing educational opportunities for members? Thanks, as always, for your advice!

Q: Hi Team,
In regard to valuation metrics such as P/E, EV/EBITDA, P/CF. Can you guys explain a bit on how to interpret these numbers to determine what is under or overvalued. I know you have to look at industry, earnings variability, growth of earnings etc. If your answer would take too long is there some reading material we could look at to learn?
Keep up the good work!

Q: Hi Team.
What is your "take" on fears around the Gold backed Yuan and the US dollar? The last Q and A was mid 2015.

Thanks for the great uplift to the site...good stuff!