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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hi, I like to measure my portfolio performance ongoing with that of the S&P/TSX Composite Index. I know that Globe Investor Gold calculates dividends paid as included in my portfolio return. Do you know if the return listed for the TSX Index (5.32% YTD as of Dec.18) includes dividends paid or not? Thanks, J.
Read Answer Asked by Jeff on December 19, 2014
Q: When you refer to the p/e ratio of companies in this forum, are you always referring to the forward ratio?

Thank you and Merry Christmas/my portfolio is up 41% because of
Read Answer Asked by ron on December 19, 2014
Q: What is your advice on investment policy statements?
I have read everyone should have one, but hear very little about them.
Read Answer Asked by gordon on December 19, 2014
Q: Hi Peter,

What is your opinion of the headlines on the news...BNN and News Papers talking of U.S. Hedge Funds selling Canada. Will our Market collapse under this selling pressure. It seems like they were doing a good job of selling the Canadian Market down except for the last three days.

Appreciate your opinion, thank you
Read Answer Asked by CHARLES LA on December 19, 2014
Q: When looking to add positions, should I be starting with your highest ranking stocks first?
Read Answer Asked by Greg on December 19, 2014
Q: Hello,
I have 60K that I'm not sure what do with. If I invest the money I will get back 46% from the good old government. That seems like the right choice but I'm considering paying down my mortgage.If you had a choice between paying down your mortgage (no penalty)or investing your money long term what would be your choice be at this time.
Thanks and Merry Christmas!
Read Answer Asked by luke on December 18, 2014
Q: Further to Steve's recent question re: "foreign" allocation, your answer was 15 - 20%. My question is, would this number be "ex-U.S." or do you include the U.S. within the "foreign" category? For myself, I tend to view the markets as Canada, U.S. and Foreign (or World, Global, etc., with Emerging Markets being a sub-sector of that.) If this figure is "ex - U.S., then what would the U.S. % be that you would recommend given Steve's criteria?
Thanks,
Cheers,
Mike
And, Merry Christmas to all those at 5i Research and the whole 5i community!!
Read Answer Asked by Mike on December 18, 2014
Q: I am a retired dividend-income investor who is very focused on asset allocation. What percentage of the overall portfolio do you recommend regarding foreign content? My current foreign weighting is 14%.
Read Answer Asked by Stephen on December 17, 2014
Q: In your answer to Pierre about Russia you say that NA markets are concerned about a Russian collapse as in 1998 but you did not specify exactly what affect this would have on our markets. Could you please elaborate. Thank you
Read Answer Asked by Alayne on December 17, 2014
Q: Let's say a couple has a $200K diversified portfolio of 25 stocks held in 3 or 4 registered accounts with no duplication of stocks between the accounts. How would you handle it if they had $200K in additional new funds to invest in non-registered accounts? I assume it would be appropriate to add some new names to the existing portfolio but what would be the best way to add to existing names? How many total stocks would be a good number? Would it be prudent to avoid having the same stock in more than one of these accounts in this type of scenario? All accounts would have a long-term time frame.
Read Answer Asked by Lonny on December 17, 2014
Q: I have been an investor for many years and truly enjoy the process notwithstanding the ability to make money. As such I have, over the years, read and studied a great deal on this subject matter. We have always been thought that the market has 3 dimensions. Fundamental, Technical and Sentiment. This has been the model for 100 years. Well I guess things change and I do believe we need to add another dimension. Machines or Algorithmic Trading. I see glaring examples of this everyday in real time. Could you give us your thoughts on this and how one should prepare himself to deal with this fourth dimension? Regards
Read Answer Asked by roland on December 17, 2014
Q: Question on the Deferred income taxes of $5,594,000,000.
Do you have any insight into this on the current report in section 22 they explain $655 million as an increase of Mexican income tax. What about the rest?

http://www.goldcorp.com/files/annual_reports/Goldcorp_AR13_full_v08.pdf
Page 87 is the balance sheet. on page 130 and 131 they explain it.

But it is a big one.

The below only explains $665 M

In December 2013, the Mexican President passed a bill that increases the effective tax rate applicable to the Company’s Mexican operations.
The law is effective January 1, 2014 and increases the future corporate income tax rate to 30%, creates a 10% withholding tax on dividends
paid to non-resident shareholders (subject to any reduction by an Income Tax Treaty) and creates a new Extraordinary Mining Duty equal
to 0.5% of gross revenues from the sale of gold, silver, and platinum. In addition, the law requires taxpayers with mining concessions to
pay a new 7.5% Special Mining Duty. The Extraordinary Mining Duty and Special Mining Duty will be tax deductible for income tax purposes.
The Special Mining Duty will generally be applicable to earnings before income tax, depreciation, depletion, amortization, and interest. In
calculating the Special Mining Duty there will be no deductions related to development type costs but exploration and prospecting costs
are deductible when incurred.
As a result of the law becoming enacted in the fourth quarter of 2013, the Company recognized a non-cash charge of $655 million related
to the deferred tax impacts of the above tax changes.
Read Answer Asked by Terry on December 16, 2014
Q: Peter My new year plan is to deregister from my RIF wcp and 300 shrs of BTE out of our spousal RRSP and transfer them into my cash account I have sufficient div in both accounts to pay the taxes.
We are allowed 19m$ for our TSFA contribution and I plan to move as much SGY into it that I can from my cash account .This is my attempt to make the best of these low share prices .
Do you have any comments on this plan.
Stan
Read Answer Asked by Stan on December 15, 2014
Q: hello 5i team,

I want to be honest and with respect, I found your answer earlier today for Mike regarding tracking quarterly reports a little disconcerting. As I study and learn, there is no question that not only to quarterly reports give me an indication whether I should buy or sell, they also give me a heads up as to what I "might" expect in the foreseeable future.

What I find disconcerting in your answer is that it appears to me there is not a really good reason for 5i not provide heads up on quarterly reporting other than 5i may be too busy to find the time to do so.

You do so much and I really appreciate all the effort but hopefully you appreciate our feedback as I would very much like to know when quarterly reports are scheduled to come out and what we might expect to see.

Thanks for all you do

Gord

Read Answer Asked by Gord on December 15, 2014
Q: Just a follow-up to my earlier question on a list of reporting dates. I think I understand and appreciate your approach of developing an investment thesis and allowing management time to execute on their plans and grow the business. However are you suggesting that we not look at the quarterly reports, and only do annual reviews .
Thanks
Mike
Read Answer Asked by michael on December 15, 2014
Q: I am wondering if it would be useful to have a screen showing the release dates for upcoming earnings for the companies in the 5i portfolios. I expect these are dates you follow and I know it would help to simplify my follow-up.
Mike
Read Answer Asked by michael on December 15, 2014
Q: Comment: Current year net capital losses can be applied back 3
years against net capital gains via a adjustment process.
Read Answer Asked by Russ on December 15, 2014
Q: Hello Peter, Could you explain your process on how you come about your conclusions on companies? Do you meet with management? Do you go over their reports? Just wondering how you have time to evaluate companies and manage 5i?
Thanks
Read Answer Asked by pietro on December 15, 2014
Q: Hello Peter and 5i team,
In the question and answers section I remember you answering questions regarding the ¨tax loss selling rule¨ in a non-registered account. I would like your opinion on the value of this strategy and how to use it efficiently.
This year is exceptional and I have capital gains to declare for 2014 in my non-registered account. In order to reduce my capital gains I’m considering selling two stocks that got hit hard since I bought them Serge Energy down 39.8% and Teck Resources down 55.6 %. Selling this two stocks would reduce my capital gains and therefore I would save about 1 400 $ on taxes for 2014.
Here is where I see a catch 22 situation if I buy back the two stocks after the 30 day ¨tax loss selling rule¨ and on a proportion of the number of stocks in question if SGY has done up .38 per share and TCK.B 1.50 $ per share it would cancel the 1 400 $ savings.
My first question is can I replace SGY with a similar energy stock and TCK.B with a similar materials stock in case of bounce back of the market during the 30 day period? Second question what two stocks would you recommend in case of a bounce back for the 30 day period? Last question have I missed something or goes this seem a good strategy. Thank you for your guidance, Ronald

Read Answer Asked by Ronald on December 15, 2014
Q: hello 5i:
When evaluating pipelines or utilities, is Price/CF a better metric than P/E? Is it the best metric to use? What other sectors, if any, would utilize P/CF as the primary driver?
thanks
Paul L
Read Answer Asked by Paul on December 14, 2014