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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: According to the experts in seasonal investing, September is statistically the worst time for markets, but then things start to pick up again later in October and into November. Would you let this consideration influence your investment decisions? I have capital to deploy but I'm wondering if I should wait another month or so before I start new positions. Also, are foreign markets (Europe, EM, Japan, etc) subject to the same September curse, on average? Thanks very much.
Read Answer Asked by Brian on September 13, 2017
Q: Hi Peter and Associates,

I hear some talk of tax selling as early as August? Some professionals speak of setting up their portfolios to avoid and/or to take advantage of year end tax selling pressures? Some sectors and/or specific stocks have seen modest to significant declines this year and risk seeing above average volumes of yearend tax loss selling?

Many experts do not suggest trying to time the market but also talk of good entry points to initiate a position if not starting with partial ones to begin. Then there are those who factor in seasonality or other technical indicators. Without wanting to sound pessimistic, more than a few guests on business programs express caution, have increased cash weighting to have dry powder in reserve.Markets are not seen as cheap but opinions vary as what to do?

Bottom line, market corrections are part of reality and one has not occurred in some time? What percentage cash might be viewed as a reasonable cushion for a middle of the road risk investor with a 65/35 (Equity/ Fixed Income) objective who would prefer to reduce equity exposure by building up some cash reserves at this time? What suggestions might you have in response to the above and specifically, what reduction in equity exposure might be reasonable and/or sufficient to have substance? Assume a 5% weight in gold forms part of the overall strategy and a sufficiently large portfolio to provide diversification and no over weightings within it.

Fundamentally, are there any specific strategies an investor might use or at least consider in the last months of any year and more specifically this year?

Thank you.

Mike
Read Answer Asked by Michael on September 01, 2017
Q: Dear 5i
I look at the chart of the TSX and see that its been trending downward over the last 6 months or so while the S&P and DOW have been trending upwards over the same time period . My thought is that it might be a good time to invest in the TSX now as that downward trend is most likely to start to reverse upward and not invest in the DOW or S&P as that trend is likely to reverse downward . On the other hand 5i generally advocates investing into strength meaning investing the opposite to what i`m suggesting . The other thought of course is to invest equally amongst them all so diversified across the board . I know predicting the market is impossible but i still like to invest to some degree on probabilities .
Appreciate your thoughts .
Thanks
Bill C.
Read Answer Asked by Bill on August 28, 2017
Q: I presently have no healthcare or tech holdings in either my RRSP, TFSA or cash. Am retired,like dividends, but can take some risk.

Looking at having 10% in each sector with HHL (50%),CSH.UN (25%),GUD(25%)in healthcare and TXF(50%),ABT(25%)PHO(25%) in tech.

What do you think of this approach and the individual holdings?

Where would you put each one ( RRSP,TFSA cash)?

Thanks Derek


Read Answer Asked by Derek on August 14, 2017
Q: Just comments.AIF-basing on better than expected Q2 revenue & eps,3 firms(TD,CF & RY) raised target price to $36 & upgraded stock.Reportedly best one day performance since 8/15 PKI-RY & BNS downgraded target price to $31 & $33.75 CGX-6 out of 7 firms downgraded to $46-$52.1st time in the last 3 years that Ellis Jacob is not that upbeat in interview on BNN after release of results. In this strong earnings season,strong results will be handsomely rewarded(eg AIF,SHOP,TOY),& vice versa.
Read Answer Asked by Peter on August 04, 2017
Q: I have seen my investments total value in US stocks and non hedged ETFs going down lately, although individual stock price are doing OK.
I know it is very difficult to predict currency fluctuations, I would like your view and recommendation on how to protect my portfolio. Is buying hedged ETFs is the solution and what about your view on the Canadian dollar against the US $ and the Euro.
I value your opinion
Raouf
Read Answer Asked by Raoul on July 28, 2017
Q: The 8% gain of the Cdn dollar over the past few weeks could have a huge impact on stocks like NFI and others in a negative way.
With the Cdn dollar on a terror lately what sectors if any would stand to gain from this currency move and what would be two individual stocks that you think could gain by the US/Cdn exchange rate moving closer to par.
Always appreciate your perspective.
Thank you
Terry
Read Answer Asked by Terry on July 25, 2017
Q: My overall portfolio is down 3% the last 6-8 weeks which I justify as the downside of having equities in the portfolio. I am 40% in cash so the drawdown could have been worse. My concern is that the 3% drawdown is just over $20000 and that is a lot of money. We are 70 with defined benefit pensions and really don't need any more capital; just want to preserve what we have. You preach the downside of market timing, but I see $ 20000 worth of paper gains slipping through our fingers. Short of investing 100% in gic's should someone with my profile be more of a trader ie use tight downside tolerances and sell when a predetermined gain or loss is met rather than buy and hold. Please comment as I very much value your opinion. Thank you.
Read Answer Asked by Richard on July 24, 2017
Q: Hello again. I’m interested to know how to consider currency when deciding between hedged, unhedged, and US dollar ETFs. In your answer to my last question, you mentioned that you prefer VPL over VAH; how was currency a factor in your judgment? Also wondering if you would approach European ETFs similarly, with respect to fluctuations between the Euro, USD and CAD (e.g. VEH, VE, VGK). Are there separate currency considerations I should take into account for each region, including EM? (e.g. VEE vs VWO)

When I hear professionals recommend CAD-hedged ETFs when the USD is falling, it sounds tactical but what if an investor has a long time horizon in mind? I’ve heard that unhedged ETFs yield better returns over time, say for a period of 15 years, but I’m wondering if US dollar ETFs are even more preferable, considering that I’ve already got some US cash ready to deploy.

Thanks for clearing up my confusion!
Read Answer Asked by Brian on July 18, 2017
Q: Greetings Peter and company,

Having been a do it yourself investor for over 50 years and a committed index ETF investor for the last 10, I am very impressed with what you are doing.

Assume that investors put half their money into a US index ETF (say SPY) and the other half into a US money market fund. They re-balance when the ratio changes by 10% in either direction and withdraw 1% quarterly to cover living expenses. Will this no-brainer portfolio grow over the next decade? Will it equal or even outperform the i5 Growth Model Portfolio? (Projected 12% annualized long term return. Since the bottom of 2008, the S&P 500 has had a 14.5% annualized return.)

I would appreciate your views on this. Your responses, as far as I have seen, have been uniformly thoughtful.

Thank you.

Milan
Read Answer Asked by Milan on July 18, 2017
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