Investment Q&A

Q: 'We’re in a bubble': Record home sales in Toronto and Vancouver intensify fears of overheating.
This is all I have been reading for the past few weeks, coupled with bank CEO's stating that Ottawa should be taking necessary steps to regulate mortgages.
I cannot but think back while visiting in Florida 8 years ago, it was evidenced the very same concerns, a massive real estate bubble, I for one could not believe the construction real estate growth that was happening.
Within two years the bubble did break, and although mtge backed securities caused the massive financial problems the US continues to struggle.
My question is "should real estate collapses in Vancouver and Toronto, will this not create a major recession". What is 5i opinion going forward. As investors should we be taking the necessary steps to put some protection on.
I would appreciate you usual candid opinion and thanks

Q: Can you recommend what % of my overall investment portfolio should be kept in a cash account? Right now my cash reserve is around 35%.
Thank you.

Q: Can you recommend this ETF as a fixed income equivalent, with better tax efficiency ?

Q: I just noticed your Watchlist feature and have been inputting companies. Can you please add PRW (Petrowest) to the list. It won't show up. Thank you.

Q: I am thinking about parking some cash in one or both of these ETF's (perhaps a 50/50 split) for the next 12 months. I understand that rate increases could adversely impact the unit price but given that rates are not expected to increase in Canada anytime soon and these are Canadian corporate bond funds not American would there be any impact from a US rate hike? If so, why? Secondly, what do you think of the downside risk and is there a better option you would suggest.
Thank you

Q: I have 4 companies that make up a significant part of my portfolio (HCG, GIL, ATD.B, SJ). With the exception of HCG I have been trying to sell them at or near 52 week highs. I have been trying to sell them since the beginning of the year and so far I have been unsuccessful. What makes these trades difficult for me is that I would be buying all these companies if I did not own them already. My question is do you use the same approach when selling for portfolio allocation reasons versus fundamental reasons?

Q: Ours is a very conservative portfolio, with one third in dividend-paying equities, half of that individual stocks and half no-load funds. The latter's performance doesn't seem to justify the MER's so I would like to reduce, maybe eliminate, that cost, roughly $5,000 per year. Any thoughts you might have on how best to effect that change and what form that should take, eg less funds, more stocks and/or ETF's, will be much appreciated.

Q: There was a large trade at the market close yesterday. Assuming it was a fund manager, what is the benefit to both sides of the trade, by doing it on the last day of the month, and does it say anything about the upcoming earnings report?

Q: When Yellen finally pulls the trigger to increase short term interest rates, do you think there may be a short term sympathy sell off of interest sensitive securities in Canada. I'm thinking utilities, telco's and reits may experience a correction in Canada. Do you think this will in fact happen and if so what sectors do you think will be most affected. Other than the lifeco's and banks any other defensive sectors you can suggest? Thanks Peter and team.

Q: Hi,
There's something I just don't get.

If banks make their money by borrowing short term money (e.g. at .25%) and lending at long term rates (e.g. at 1.75%), then if the short term rates are raised (as is so often spoken about when discussing the FED), and long term rates cannot be controlled by the FED, then why do I constantly hear analysts say that when the FED raises rates it's going to be good for the banks? esp. since I believe such a move would curtail inflation and inflation is not a big threat anyway and as I understand it, long term rates mainly go up in conjunction with the expectation of inflation?

Q: This ETF in your Income P/F has been pretty flat since 5i started it, I think in 2014, and do you think it will remain a long term hold? How much of a hit would you expect it to take with a quarter point rise in the Fed rate and what is its duration? Thanks, J.

Q: what is your opinion of the stck DFN - dividend 15 split

Thank you for your opinion

Q: Hello Peter et al.

I was watching BNN market call the other night and a question came in about CXR and the guest was a technical analyst. He was stating that the seasonal trend for medical stocks is from early June through to the end of Sep each year on average. I currently own CXR and CRH and I am up nicely on CXR and currently up slightly on CRH. I was at one point up almost 100% on CXR (currently 30%) and up 25% on CRH. I have been at times frustrated with both stocks to see them swing all the way back to 0% gain in CXR and 33% loss in CRH from my purchase price at times through the year.. These stocks seem to swing heavily throughout the year. How do you know when is a time to sell and take the profit and to get back in later if the time arises? I seem to be a good buyer of stocks at times but not a good seller. I bought into some of your recommended stocks like CCL.B and DSG and sold them when I made 20% but after I sold they kept rising. CCL.B went up over 100% and DSG went up to 70% where I bought them. You have held onto these two in the portfolio. What is your criteria for selling or still holding on even though you have made a good return.

Regards,

Brendan

Q: I'm considering ZLU as an investment & would appreciate your comments.It will be about 10% of my portfolio & in U.S funds.Is it too conservative for growth? Except for owning TD it's my only U.S. exposure.Can you recommend any other etf funds with U.S. exposure?Thanks.

Q: I would like to divide $100,000.00 into 4 ETS of equal weights. Preferably high yield but still conservative. I have been trying to do it myself but I am overwhelmed by the choices. I currently have the two above but they may be too much the same.

Thanks for being there!
Bryan

Q: Hi , LRE currently has a bid of .52 cents a share under review by the Investment Canada Act . CEO told me Investment Canada came back with 3 undertakings ,and the undertakings have now been completed and the application is proceeding towards final review.
Without asking about this specific deal. What is the criteria for approval from Investment Canada
Thanks,David

Q: Is US currency in a RBC bank account guaranteed by the BC govt not exceeding US$60,000. Thank you.

Q: In a follow up to Paul and Jim, there is a calculator with an explanation available to get a sense of potential savings using the Horizon's DLR and DLR.U ETFS. http://norbertsgambit.com/usd-to-cad/
Cheers

Q: Hi Peter and Ryan,

Thanks for the answer you provided yesterday on the Deposit Insurance Corporation of Ontario (DICO), which insures Canadian currency deposits at credit unions, including interest, to a maximum of $100,000. However, my question was about deposits that exceed $100 000. I would like to have an idea of the risk involved if I were to deposit $150 000 or $200 000 on my Meridian High Interest Savings Account. I wanted an opinion based on Meridian’s corporate reports at the following web address: http://www.meridiancu.ca/meridian/about/corporate-reports/Pages/default.aspx

Many thanks!

Q: Hi again,
Sorry the symbol I was asking about is HEU. I've copied the question again below.

Hi 5i, I think over the next 3-5 years oil is going to rally up. In doing some reading I found this etf. The management fee is definitely higher than I like. I'm not exactly sure how the 200% correlation works but it sounds like if energy goes up it would be a good thing. Could you give your opinion on this fund, also could you give some better options for getting some more energy in my portfolio if you know of some. Thanks!