Investment Q&A

Q: Just wanted to add a note of encouragement to the discouraged ones out there. I used to feel as Josh feels when I was out there on my own, but then 5 I came along.

Through 5I

Bought ATD.B at $30. It's now $61.09, as I write this.
Bought BYD.UN at $35. It's $59.65
Bought CXI at $21.22 It's $26.77
Bought ESL at $30. It's now $53.22
Bought WSP at $31.65. It's now $44.95

These are awesome returns -- by anyone's standards.

Certainly, I've had a few losses, but by and large, the gains outweigh the losses by quite a margin. Additionally, I would add that these losses tend to come from my lack of patience -- or my fear. I end up selling too soon, then kicking myself all over the block once the stock bounces back to all-time highs.

I realize the frustrations that may come in the investment world, but sometimes we get so disappointed in a few things that we end up flinging the baby out with the bathwater. Our money -- which is always hard-earned is a very emotional thing to us all: we end up taking the losses much too personally, and glossing over the wins by patting ourselves on the back too much, and not giving credit where credit is due.

If I make a 60% return on a stock, I tend to take the credit. If I make a 15% loss, I'll blame Peter (smile) ... or in my case, my brother Frank, the famous Frank Effect guy. ; )

This is simply a note of encouragement to Josh, to hang in there. ... And an extra note of thanks to the "swamis" at 5I, who though they do not claim clairvoyance, I swear they must at least have been reading the tea leaves!

Q: To me the key to knowing when to sell is knowing one's temperament. Once you know it, you can listen to what 5i suggests or google "when to sell stocks" and get a bunch more ideas. Choose the ideas that align with your temperament. I don't think an investor is going to be happy following some stranger's temperament. You have to follow your own.

I see a lot of people writing 5i, unhappy with their 30% and 40% losses. What they're saying is that their temperament can't handle those losses. No law says they had to suffer those losses. They were free to say, "Screw this, I'm getting outa here." But they didn't. They were aligning with 5i's temperament, not their own.

For me, I don't follow 5i's long term advice or their portfolios. I get my value from specific recommendations, answers to questions, and the basic integrity of 5i.

Q: I would like to add a member's perspective to Donald's question about "when to sell".
I have been watching BNN since the network started. Please know that the analysts who appear are for the most part there to promote themsleves and their funds. They are not "bad" people, it is just the way the game works. If you look at their funds performance over time, I can assure you that most are not raking in the profits and killing the market. They amplify their winning calls and downplay their errors (even when they have gotten things terribly wrong). I watch only to glean the odd bit of info on a company I am following, or to guage how others are thinking in the market.
If you think market timing is a good strategy, please reconsider. One might do as well betting on NFL games. Maybe there are a few souls who can succeed at that, but they are surely very rare.
For a nominal cost, Peter has provided us with a diversified portfolio of quality companies. It really dosen't get any better than that. Hold them and they will recover when the market eventually does. Resist the urge to trade too frequently. Don't be swayed by the boasting of those on BNN.
Cheers
John

Q: as a subscriber I am very disappointed in your service and guidance .
At this moment all the stocks you recommended are down.
On top of this I had to pay for your advice and keep holding on and loose more every day.
Thought you would steer the investment ship better in troubled times as well

Q: I would like to add to a request from Denis today regarding figuring out when to sell.
A set of guidelines would be really helpful if it is even possible to put together a coherent applicable strategy

As a side note, I am getting annoyed listening to some of the BNN guys or reading posts from all the other smart alecs who talk about sitting on piles of cash .... almost gloating at the market melt down ... while they appear to be rubbing their hands in glee .... over all the bargains that are out there. All the while I sit here in agony - and I used to think I was risk tolerant, but have discovered they are more limited than I thought - while watching so many of your and our favorite names fall apart - not just 10% (if only!) but more like 20-30 % or worse. And now even to break even some massive price increases are going to be required.

I want into that other game.

What do I do?

Hoping to learn another lesson after seeing so many terrific gains evaporate.

Thanks in advance.

Q: Hello to everyone. As a long term investor rather than a short term trader I do not see anything positive about short selling.It seems to cause excess volatility,hedgefunds to blow themselves up, making great trading fees for brokers, etc. I also doubt that all the short sales have the "borrowed" stocks.
My question is "why should short selling be permitted?" After all one cannot sell anything else that one does not own, eg, I cannot sell a car or a parcel of land that I do not own. How can shortselling be good for the stability of the market? If one does not like a stock, sell it. There are also options available if one desires to take a position on a stock that he may not own.
I appreciate your answer and will probably get a lot of flak or be told that I am naive. Thank you.

Q: Hi, This is a question which I would open up to members..Is there any portfolio website or tool out there which generates the past performance, p/e and other statistics of a hypothetical portfolio which is a mix of stocks, bonds and etfs? Various combinations of stocks and ETF and bonds may be in this portfolio each with a different percentage?Thanks. Shyam

Q: I am a new investor looking to invest 25K, with a medium risk tolerance. I was hoping you could suggest some stocks to start building a portfolio and advise as to an appropriate % allocation to ensure I get the diversity but also effectively manage risk. Appreciate the guidance and advice!

Q: How many stocks should one own? I have a position in most of the stocks in your BE portfolio and have supplemented that with smaller positions in some of your Growth stocks. I recognize this is not the intended use of a "portfolio" but I am comfortable with my sector and risk weightings. Also a very long term investor for what it's worth. All that said, what is your opinion on per-security weightings on a whole-portfolio basis? Should an investor stick to about 20 securities (the number in the BE portfolio) with bigger positions? Any harm in owning 30-40 different securities or otherwise?

Q: Hi
What ETF’s would you suggest for an 18 year old starting out with a new TFSA, and non-registered account?
Income is desired and would be “tax free” since the TFSA and Personal Exemption Credit would shield it from tax.
I’m thinking:

35% XIU
20% XSP
15% Mawer International
30% XSB or some QUEBEC 4.5% Dec2019 I own

I’m tempted to sprinkle some beaten up sectors like XEG, XRE or XFN, but I’m leaning towards the main indexes to avoid beating myself up for picking the wrong stuff.
How does the allocation look? And the strategy?
Any suggestions?
Thanks

Q: can you explain why the volume traded for example on td bank on friday sept 18th was so high? Other stocks were the same, ie bdi, sj, wfc, atd.b etc. I looked at a 3 year chart of td bank and the volume yesterday was huge and way higher than anything over the 3 years.
thanks

Q: BMO have ETF's that have "covered calls"
Could you explain what a covered call is, and are there any tax implications with these products?

Q: I received several calls from a company that sounds like a pump and dump organization that encouraging me to buy Aqua Power. They are relentless in their message promising a large return. The news from APSI looks good but I am suspicious of the approach they are using. I appreciate sharing your knowledge of APSI and the Company that is promoting it "Investors Edge located in Costa Rica"

Thanks

Q: Hi, 5i.

I'd like to purchase some US dollars to buy a US listed company or two. It doesn't strike me that now is a good time since our dollar is so low compared to the US dollar and so I'm having trouble grasping the correct thinking on this.

Say, for example, I buy Disney today and get a 20% total return in the next 5 years. However, say that our dollar is trading around 20% higher in 5 years than it is today. Would I effectively have no return if I sold Disney after 5 years and converted to Canadian dollars?

Thank you for your help.

Robert

Q: Please suggest a few companies listed on Canadian exchanges,but who get most of their revenue from the U.S.A.

Q: ET & quite a no.of other 5I's stocks will be added to the small cap index as at close on Sep 18.SJ will be added to TSX.Please advise impact.Thanks a lot for your usual great services & views

Q: Good Evening
When reviewing the insider reports I come accross to the following term under the heading Nature of Transaction: " Buy Under Company Plan." Can you please explain what is meant by "Buying Under Company Plan"??
I understand the buying and selling in the open market but I am not sure how the buying under company plan works. Are the insiders required to buy company shares at specific intervals?
Thank you

Q: Seems crooked that two directors sold shares last week before yesterdays announcement.Any comment?

Q: Hello Peter & Co,
I appreciate your quick response to my sector query for a particular stock; I just found a great source for such info.
Go to TMX Money, click on Investor Tools, click on Stock Screener, make your sector choice and you will get a list of companies in that sector.
Hope that my co-subscribers will find this useful.
Thanks,
Antoine

Q: I apologize in advance for this rather off-the-wall question.
A number of years ago I opened a separate account and I deposit $1000 per month on the 4th of each month. The account then automatically buys the same TSX etf a day or two later. I did this as a test to see if it would outperform my trading, but that is a different matter. My question is this -- wouldn't most retail investors be on average buyers early in any given month, and more likely a seller at the end of a month, everything else being equal. It seems like most of have more cash, on avarage, available at the beginning of the month, for a number of reasons. Would market prices therefore not tend to be higher early on a monthly basis rather than later? Do you know if this has ever been studied?
Cheers
John