Investment Q&A

Q: SYZ, ZZZ, CZO, TNC, NFI, PBH and ITC These are all stocks that have been down considerably over the last month. They are stocks that 5i customers have or did have. Meanwhile, the TSX 60 has been flat for the last month. So I am wondering if the members are selling out on these stocks and possibly putting the money into oil which has been up for the last month or so. Should I have been getting out of some of these stocks over the last while and putting my money into oil which is one sector that is doing quite well and probably the reason the TSX is not losing ground this month. Thank you. Dennis

Q: I have about 10% cash right now. Normally I prefer to be fully invested because I like the steady dividends. My investing style is somewhere between your income portfolio & balanced portfolio and the portfolio is reasonable balanced. I don't need to take anything from my investments now but I will in a couple of years.

It "feels" like sitting on a bit of cash makes sense right now in the short term and maybe take advantage of tax loss season or other buying opportunities (seems like a lot of those recently).

Your thoughts?

Q: Good afternoon,
You recently responded to a question concerning put write etfs. My understanding is that such an etf may perform poorly in a bear market. Is there an etf trading in Canada employing an option strategy that would benefit from a bear market, apart from the highly leveraged short term products?
Thank you for your advice.

Q: what is your current opinion on this etf and its relative position in your portfolio ?

Q: I'm working on a TFSA.Which portfolio should I be using or what type of stocks.

THANK YOU KIM

Q: Hi Peter and team, If interest rates go up in US but down in Canada what is the likely impact on CPD. Also, in a broad market selloff of greater than 10% how strong is the correlation of CPD to the overall market. Thanks

Q: I have these prefs in my rrsp,they are down a lot,paying between 5.5 and 6.4%,would I be better off holding them and hope they recover or selling them and buying etfs such as cdp,zdv or cdz.Any suggestion you guys have would be greatly appreciated.

Q: As.noted in the A and A today some of the more speculative growth names Savaria Shopify New Flyer dropped today. Is it sector rotation into oil and gas after the OPEC announcement?
David

Q: I appreciate your comment about the PowerShare s&p 500 low volatile ,one in US dollar and in can. Dollar.Your comment about this ETF,and the pro and cons of having them.Thank you ebrahim

Q: I have just recieved some new money to invest and woukd like to increase my expsosure outside Canada. Im thinking of a US index fund. Can you please tell me the difference between VUN/VUS, HXS and SPY? Which one is better? Do you think this is a good time to invest in the S&P with it at all time highs?
As always your advice is greatly appreciated.
Nancy

Q: OK the Trump effect ... would it be prudent to turn all investments into cash lets say a week ahead of the US election (50 stocks X $10/transaction =$500) and if Trump wins ride out the wave of volatility and then buy back into the portfolios for another $500 hit possibly avoiding the chaos that would follow the Donald into his presidency? If Hillary wins would you expect a positive response from the markets?

Q: I have been a bit worried about the US market, as measured by cyclic PE it seems quite expensive. I have used the recent strength to sell some of my low conviction stocks and take half positions in what I consider to be better companies. My cash is now up to 10%.

My first question is do you think this cash level is appropriate for the market now? My second question is, given a pullback how would you deploy the cash. Immediately on the day of a big drop, say over 200 points on the Dow?. Or try to time the bottom using technical analysis? Or gradually ease into a position starting the day after a big drop in the market? Any other suggestions gratefully received.

Q: I have rate reset preferred shares (bought at $25 / share) which are presently 25% in value underwater because of the Banks of Canada’s unexpected prime interest rate decrease. At the time of purchase their interest rate was 4 to 4.5% & they will be subject to a rate increase in 2019 & 2020. I your opinion what is the chance of their value returning to near $25 in the next 3 years? I am wondering if I should sell the preferred now or hope that their value will appreciate sometime before their rate reset date . Thanks … Cal

Q: I submitted this question last Thursday. But I think there maybe system glitches that some questions get lost. This is a resubmitt:

Your balance portfolio has an impressive returns. Mine is way behind. So I searched your QA database, without success, to see if previous questions were submitted regarding a general strategy on how to migrate my stock/mutual funds/etfs holdings to duplicate your balanced portfolio for getting less hands on investing. I hold perhaps 80 stocks and I share perhaps 15 securities with your balanced portfolio and these are obviously to keep within the constraints of asset allocation. I have about 25% holdings in US companies. Your answer, I am sure, would be of great benefit to those members who are like me, are tired of chasing ellusive returns and wish a steady hands-off approach to investing.

So my questions are:

- Is it possible to give a guide line on how to migrate a portfolio to duplicate one of your portfolios? Do you think by adding few of your covered stocks with A/B ratings be a positive or a drage on performance?

-In searching your data base for questions like this one, using a key word like strategy, would I be able to find answer to such a question?
- Allocating assets between Canada and US in general terms, to enhance returns, without consideration to personal circumstances, what percentage allocation should one invest outside Canada?

Your program has helped me tremendously in focusing my portfolio after many years of haphazard approach to investing. So your help is much appreciated by the many members of this community,

Thanks a lot.

Q: In my RRSP, 28% of my portfolio is in U.S. stocks. I am getting concerned about the US election, and what it might do to the markets, in the short term, as well as the overall U.S. economy in 2017/18. With the Cdn dollar being down around $.76, would it be advisable to take that down closer to 15%, instead of the 28%, for a while?
Also, I presently have 25% in cash, and want to put half of that into something low risk,but better return than cash, for up to 2 years. Would ETFs with a stable history, be a good place to put the cash,and if so, can you recommend a couple? Or another idea, instead of ETFs...
The remaining 47% of the portfolio is in the Cdn market, and some Emerging Market ETFs.
Thank you
Grant

Q: I am holding TIP in the US as inflation protection, however I am having doubts regarding this strategy. For real return type bond ETFs, an increase in the relevant CPI increases income, yet rising inflation will be met with rising interest rates on nominal bonds that will drive the price of inflation-protected bonds down as well, negating the benefit of the increased income on a total return basis. It would seem to me that real return bonds are only protection from a central bank that has lost control over inflation; orderly inflation not so much. Is this an accurate assessment?

Q: Good Morning: A two part question about CBO. First, what is the difference between CBO and CBO.A, and is one preferable to the other for retail investors? Second, and more importantly, I notice that the stated yield (on my BMO Investorline fact sheet) for CBO is currently 3.3%. In your opinion, would an increase in interest rates in the US be likely to affect this rate in a significantly negative fashion?

Q: given the present state of the markets, on a percentage basis how would you invest by sectors 1M including a % in cash . thanks in advance

Q: I am putting together a portfolio called "Big Dogs"
I broke out the 10 largest stocks by market cap in each of the 10 sectors
I will invest in 3 of those stocks in each sector for a total of 30 stocks.Determining which 3 has been a challenge,looking at the usual--
dividends--eps--p/e-- market cap etc.Also have a bias toward your favourites.
Since I am only looking at the top 10 do you think I will be overlooking some better opportunities?I think perhaps, but I would go
crazy trying to look at the whole sector or even the top 20.I feel my odds of success are better sticking with the "Big Dogs"
Over all I will put 10k in each stock but not until I see a market
pull back which I feel is imminent.Perhaps I could have your thoughts on that as well.
This is not something new---What do you think of my idea and approach?

Q: Hi,

I know you like the following: PPL.PR.M and ALA.PR., TransCanada (series 13), Canadian Utilities (series FF) and Brookfield Asset (series 5). With these type of minimum reset preferreds, where would you expect the prices to be in 3 or 4 years under the following scenarios:
1. Current govt of Canada rates 0.5 point lower than today
2. Current govt of Canada rate same as today
3. Current govt of Canda rate 3 or 4 points higher than today

Regards,

Robert