Investment Q&A

Q: Peter I have a relatively large portfolio and safety net and am still working but don't have to be.
I was wondering if it might make sense to take a portion of cash (perhaps 10% of my assets) which I don't need and won't need in my lifetime and invest it in an aggressive segregated fund. I understand the downside is the cost of about 3% and locking in for 10 years but the upside is the ability reset in accordance with my gains and protect my principle. Would you consider such a move?

Q: 5i recently responded to a question on sector classification / weighting by stating that your ideal sector setup would have 'around 15 sectors' opposed to the TSX's 11. I'm curious to know what your ideal sector classification setup would be, and what your ideal sector weighting would be today given a blank slate for a risk on investor? IThis will allow me to vet my existing portfolio with your sectors to see how it stacks up and if its too overweight / underweight anywhere. Thank you.

Q: Market strategy
With big name investors like Carl Icahn predicting big drops in the market, I am getting a bit nervous.
What is your perspective on the current state of the markets? Would you be inclined to go to a higher cash position. If yes, would you sell specific sectors or more generally across the board.
My investor profile is more income oriented vs needing to selll stocks.

Thanks.

Q: I assume there was nothing in google search data before the last crash that could be used to predict the next one? Perhaps something less obvious than increasing paranoia or volatility?

Q: We own several Reits, pipelines and telecoms and have heard that if the interest rates go up these sectors will go down in value. Is this correct?

If so, what would it take to bring them back to current levels?

If we wanted to invest more in these sectors, when do you think a good time would be?

Thank you

Q: Hi,
I have a double-weighting in Goldcorp (G) and notice it is relatively volatile in price. Does it make sense to try to hold something to counter-balance this in my portfolio? Or should I just accept a bit of volatility in 10% of my stock portfolio? If it makes sense to counter-balance what would you recommend? The rest of my portfolio consists of 5i model portfolio stocks (except the B or lower rated ones). Thanks! Michael

Q: How long do you carry a losing stock in this case 4 in my portfolio,(CCO,POT,G,TCK). What makes you at 5i decide to sell or hold on a stock that has lost considerable value

Q: I have questions about earnings estimates, triggered most recently by your answer to an earlier-today question about Bird Construction. Your answer stated "The earnings estimate for Bird was $0.22 . . ."

WHO comes up with these earnings estimates and, more importantly, HOW do they come up with them? What credentials does anyone (outside the company) have to come up with such statements?

Even more importantly, why do "investors" (??) believe such estimates, to the extent that an "earnings miss" like BDT's drops the share price? Or, more correctly I guess, why does the belief in what would seem to be flimsy evidence like an estimate drive up the share price?

But I'm willing to be educated (that is why I'm here<g>).

Q: Would you consider that the US MARKET has topped temporarily and is about to make a correction?
Ditto for Canada?

If so what might some money making opportunities in contra ETFs?

Q: I've sold Paladin (thank you) and have cash to invest. My stock holdings are below. Looking for 3-4 new HIGH QUALITY companies (regardless of sector) that aren't highly cyclical and you would consider "must adds" for a long-term investor.
Tech 30% - CSU/AAPL/ESL/MDA/AYA/GIB
Fin 30% - BNS/XLF/AIG/BMO/CXS
Ind 10% - STN/BYD.UN
CD 10% - CGX/ACQ
Enr 10% - CPG/PPL
Tel 5% - T
Hlth 5% - VRX
Thanks for your great service!

Q: which companies that you guys have covered could be the most negatively affected by a surprise interest rate increase, thanks?

Q: Hello Peter.
This may be more of a portfolio management and Investor behaviour question but as everyone wants to own a portfolio that grows and/or grows income, from your experience how does an individual investor balance all the inputs?
Inputs like, Media noting markets appear to have run their distance, Others saying we are in a long-term Bull at least into March next year, technical managers indicating sell when the uptrend is broken.(good investments don't always stay in an uptrend)
I understand most of this is noise and some is out there to generate market activity, but in the mix has to be some truth to be distilled.
As a small investor, I am interested in seeing my portfolio grow over time and would like to not pay 2.5% or more to the banks for keeping my capital in a mutual fund.
I guess the question is, how does a small investor navigate through the noise and what are the important structural inputs for successful investing as a retail investor? What are the important inputs that will support the right moves (portfolio management) at the right time?
Your thoughts on this and any resources or readings in this area you can recommend would be appreciated.
Thanks for this ongoing excellent service
Dave

Q: I have been advised to safeguard my recent portfolio increases, which have been substantial, by selling shares equal to my profits, leaving only my original investment amounts. While an attractive idea, I am a dividend drip investor and removing the profits will reduce the "multiplier" effect they should have in a bull market. What would you advise?
David
PS: And of course keep up the good work!

Q: When I analyze the 5i Model Portfolio and the assignment of securities to sectors I see that some stocks get tagged with "Services" which could just as easily be tagged with something else. For instance AYA and CSU ("Services") are ones I would tag "Technology" along with ESL and SYZ and if they were thus tagged it would make Tech a 20% portfolio weighting based on cost and 23% based on current value (Sept.30). If you agree with this assumption would it be an indication that 5i highly favours the Tech sector over others, even though Tech is less than 2% of the TSX Composite? There's no doubt the performance of the 5i portfolio going forward is going to be vastly different than the TSX where 72% of the composite is Financials, Energy and Materials.

Q: Could you give me your current view on Vale. I have concerns on it and am considering selling it and buying Pembina or Riocan. I am looking for long term capital stability and reasonable dividend.

Q: Hi Peter, I have set aside a downpayment for a future home purchase in the next 6-12 months, and rather than earning 1% in a 'high interest' savings account, what would you recommend I do with the cash? Obviously I would want this cash to be safe, but at the same time earn a higher return than simply parking it in a savings account. Thanks

Q: Hey team, can you tell me what kind of indicators you look for in a market top? This market for me has become pretty scary so I decided to cash out on some companies such as AYA that could be caught big time in a downward movement.

Q: Good morning..currently rebalancing RRSP portfolio...currently own ARX,BTE,WCP and E representing 18%...was thinking of reducing ARX and adding TOU...is 18% to high in current market conditons?
Utility pipeline...BEP.UN,IPL,NPI..representing 15%...thinking of selling NPI to reduce allocation to 11.5%..is this allocation okay whith the current market...

sorry one more question...I have no exposure to healh..if wanted a 5% holding what would you recommend?

Thanks again!!

Q: I watched BNN last Tuesday and an analyst said that TSX is at a 2-year high and suggested that short-term investors should take a side-line position now.

I need to cash in most of my “Cash Portfolio” next March/April for a major home renovation project. I have the following stocks in this portfolio. I also have some cash.

AGU, BNS, AYA, CGX, MG, ENB, MDA.

AGU is down 7%, all others are fine.

Please suggest which/when stocks I should sell and/or switch to more short-term tolerant stocks. Thanks again!

Q: I am a new member and I want to start an equity portfolio. I already have bonds and GICs. Since the market is volatile and uncertain, which sectors would you recommend for a retiree with a low risk tolerance seeking for some growth ?