Investment Q&A

Q: I would like to add something I have learned since I have been with 5i for a couple of years now. I have learned an awful lot and no lesson has been more important than the need to diversify. Unfortunately, at first that simply meant to me holding companies in different sectors without enough regard for exactly where those companies earn their money. So when oil and commodities collapsed, not only did my purer plays (Tck, G, Sgy) drop but "associated" companies in other sectors declined as well (Rus, Bdi, Qst) so I realized I wasn't as diversified as I thought. Lesson learned.

All in all, I have been happy with my total returns over these past few short years. But I seemed to have achieved those returns by having some 2,3, and even 4 baggers while having lots of losers. Is this a "normal" situation or just a current sign of the times and the makeup of my porfolio? Is there a percentage of winners one should expect in a portfolio (assuming moderate risk)? Or will the losers often/usually outnumber the winners?

Appreciate your insight.

Paul F.

Q: Just wanted to thank you for your service. Its impossible to find this level of service outside. I think you made a good call removing Win from the portfolio. I think the overall portfolio approach works..most people complaining are buying individual stocks and picking and choosing one or 2 out of 20 or so stocks in the portfolio. I think people should pick one or two of the portfolios and buy a % of all stocks in that portfolio. I think you have given good thought to setting up each portfolio. I think it will be a good thing to have a write up/guidance about setting up a portfolio for new investors. cheers, Shyam

Q: Hi; This should be a simple question. If a large firm\investment bank is underwriting an IPO or equity offering, what specifically does that entail. Is that simply the firm\investment bank selling equity to client. Is there any fiscal inputs required from the large firm\investment bank. Secondly, if the investment bank is underwriting and providing analyst coverage isn't that an obvious conflict of interest. Are there no regulations for that?

Q: Hello Peter & team,

I've noticed that you receive many questions regarding info about short interest data on TSX stocks. As far as I can tell, Yahoo Finance has this data available for free and, I believe, fairly accurate. I was able to check the data for DH that you provided in your latest answer and it seems to be the same: "There are 4.2 million shares of DH shorted on the TSX, or about 4% of the float."

I'm not certain if it's *really* accurate in all cases, since I cannot verify against any other service, but in this particular case it was. Perhaps more checking would be required in order to suggest Yahoo Finance as a viable option for this info.

The short interest data (among many other key metrics) is available under the "Key Statistics" link on the company page returned by the "Quote" request. See for example the page for DH: https://ca.finance.yahoo.com/q/ks?s=DH.TO The data is on the right side of the page under "Share Statistics".

Also, a Yahoo Portfolio can be configured with a column for the "Short Ratio" data.

I hope this helps.

Best,
Iulian

Q: Incredible how you leave investors behind and telling them to sell win at rock bottom.if this was the only company that your advise would be wrong on.it would not be bad.
Scr,avo,win,gxi,bin,sgy....and many more.
Sure after they are out of your portfolio,everything looks fine again
Your track record is getting very lousy the least.
I am very disapointed in your advise

Q: Well, CXI is yet another 5i stock that went sour, I am at over 30% loss on this one (same as with AVO, HSE, AYA, and many others). Don't get me wrong, I like your service and have been using it for 3 years. Yet, my losses on 5i stocks exceed my gains even though I used to hold most of the stocks that you recommended. I understand that it is all about the right timing and the point of entry, so here is my recommendation: I would be very useful for subscribers if in the "5i summary portfolio" updates you would indicate the current level of confidence (based on timing on your last review and market events since) of your rating and risk level given current market/sector conditions. It would also be helpful is you add these parameters in your answers to subscriber's questions when you answer "it remains our favorite stock in the sector", "we would still rate it as buy", etc. I also question your practice of publishing portfolio returns for your overall portfolio (YTD and "since inception") , when you remove underperforming stocks (e.g. FM) from your portfolios and obviously disregard all losses there, the great results you publish are not really that representative in this context.

Q: I am a retired, conservative dividend income investor, with a well diversified portfolio of stocks, ETFs and mutual funds (AD, AQN, ALA, BCE, BNS, CGX, CPG, PBH, RY, SLF, WCP, WEF, WSP, XIT, ZLB, RBC Cdn Eqty Inc, Sentry Cdn Inc, Sentry REIT, Insured Annuities, Fisgard Capital), as well as a company pension and CPP.

Question # 1: BCE is 4.0% of my TOTAL portfolio, but 6.1% of just my EQUITY portfolio. When you discuss stock weightings, is it of the total portfolio or only the equity portfolio? What general guidelines do you recommend? I use roughly 2-4% per stock, and 4-10% for either ETFs or Mutual Funds.

Question # 2: My asset mix is 65% equities and 35% fixed income. Within equities only, my mix is 25% finance, 18% utilities, 17% consumer, 4% health, 14% industrial, 9% info tech, 10% energy and 4% materials.

I am looking for a very conservative, blue-chip, dividend-paying stock (> 3% dividend) to add and I'm not sure which sector to top up. Please point me to the right sector (or two) with 3-5 stocks to consider.

Thanks, Steve

Q: In your answer to Shyam's question you said, "We are comfortable with a small amount of leverage for investors with ongoing income and a decent diversified portfolio."

How much is a small amount? What percent of your portfolio?

Q: I always find myself fully invested and when an opportunity presents itself..for example Aya..I don't have cash to invest. How much cash should one hold in an account? Is it OK to borrow to invest? How does one make a decision to sell one to purchase another? Thanks.

Q: As you said the shorts have increased their weighing in intertain. How can an individual investor compete with the big boys? It seems the game being played is to short everything. I only know how to buy long but it seems every time I buy my stock gets shorted and it drops and I continue to get clobbered. So what is one to do? Just sit and wait for the shorts to cover when good news come out. It is so frustrating.

Q: Hello, 5i. I am wondering if I should get rid of all or some of my bonds because of chronically low interest rates. I am in my mid-fifties and have forty percent bonds which do not look like they are going to do anything. Perhaps some of the bonds could be replaced with REIT's and dividend stocks.

Q: Hello,

Is this market making investors hit the sell button for no real reason? Two stocks that I own at higher prices, IT and SWKS, I decided to add to in this three or four day pull back in the market. I woke up this morning and found IT down 7.5%, even though they seem to have a good quarter. SWKS, popular with seeking alpha, was down 5% because Apple had a hiccup. How much longer do you think this type of market will continue?

Thank you,
Dennis

Q: Hello,

I am a new member and bit lost. I did not find any info on how to invest in the model portfolio in terms of timing ie when to invest, how much to allocate to each portfolio, also I did not find any blue chip dividend paying stocks in the portfolios, no etf for emerging markets, international equities or US equities. Instead of just opening up all the reports, model portfolios, Q&A to a novice member it would be nice to provide a guide in terms of how to invest new money considering the above points I have listed. Thanks

Q: I noticed under the 5IR other links, there is a link to "Sector allocation tools". The sectors include Financial Services and also Financial....while there is another Real Estate. This caught my attention because these three categories are often grouped together under Finance. I like this three grouping approach.
What would be classified as Financial Services....banks, insurance. brokers and the like? What stocks would be included under Financial?
And the last question, for a balanced portfolio, what weights would you suggest for these three sectors?
thanks for enhance my investment knowledge......tom

Q: Thankfully never a share holder, I'm trying to learn from the Valeant fall out. In doing so I ran across an article discussing the reporting of non-GAAP (general approved accounting principles) results and estimates. Apparently, Valeant does this, amongst others, and there are since cautionary tales...

Can you please give me a Coles notes lesson on non-GAAP data? It seems like they are all the rage, but should not be trusted...

Best.

Q: Thanks for tweeting out any news on dividend changes. Your recent tweets show:


Black Diamond $BDI lowers #dividend 37.5%.

Supremex $SXP raises #dividend 10%.

Telus $T, in our model portfolio, raises #dividend by 10%


There’s been so many lately and I note a few got missed, however I was wondering if there might be a place on your website for “Dividend Changes”? That way we wouldn’t need to put up with all the unwanted Twitter ads etc.

Thanks.

Q: Is there any historical evidence supporting which day of the week is best for buying stocks and which day for selling stocks? Thanks, Bill

Q: Telus today reported a 10% increase in its dividend, but I think it meant 10% for all 2015 including the previously announced 5% dividend increase from Spring 2015 of 2 cents from 40 to 42 cents. If my understanding is correct, then the Telus dividend increase is overstated and Telus is guilty of taking credit twice for the same positive news. Full disclosure - I have a full position in Telus and am well satisfied. Can you provide a general comment on companies taking credit for the same news more than once. If so, the politicians have competition.

Thanks as always to the work of the team.

Q: Can you give me a site providing short interest for all TSE stocks rather than top 20? Looking for CSU short interest.
Thanks

Q: I have a question regarding best strategy for my son's portfolio. He is a 30 year old engineer, who has absolutely no knowledge of investments and no interest in learning about them. I finally convinced him that GIC is a bad place to park his money, so here is the question. How would you structure portfolio for a young person who wants to sleep at night, check his investments once every 3 months, and doesn't have much tolerance to loss? He has 120K to invest (incl. 40K in TFSA). I assume ETFs is a route to go here...? What combination of ETFs you'd suggest?