Investment Q&A

Q: Hi Peter and Team,
Thanks for a great first year of interesting and profitable investment advice. I will be renewing soon and look forward to the coming year of 5i reports.
My question concerns what seems to me to be contradictory advice having to do with portfolio rebalancing.
My approach is both capital gains and growing income for retirement. I have 20 stocks in my portfolio with what I consider to be good names such as STN, TRP, ALA, ESL, SYZ, AYA, BCE, etc. To me, some of my holdings are just getting rolling. If I sell back to 5% every time there is a rise in the share price it seems as if I am eroding my possibilities of future price and income gains (especially given the good prospects of dividend increases).
In a recent answer you said that an investor should not sell a good stock just because it is up. How do you reconcile these two assertions? Thanks again for the excellent service and have a great 2013. Rob

Q: Peter...looking for $US exposure via exxon ge p&g mcd. Is a US$ trading acct. the best way and if so...are there tax and withholding issues? regards Art

Q: Hey Peter and Co.
I am thinking about getting into covered call writing on some of my dividend stocks. I'm reading up on the strategy mostly from Alan Ellman's Complete Encyclopedia For Covered Call Writing.
I really don't want the stocks I have to get called so I'm thinking about just writing out of the money calls to add income to my portfolio. What is your opinion on OTM covered call writing and covered calls in general?

Q: Peter; If you were trimming your pipeline holdings because they have become too high a % of the total where would you invest the proceeds keeping in mind income is a prime requirement? Thanks.

Rod

Q: What is your outlook for Canadian technology stocks for 2013?

Q: Hi peter and team :
I am re balancing my portfolio by selling some of my loosers (Oil and gas stocks - painful) and considering to replace them with the below. I hope to go for safety and modest yearly total gain of 10% -12% The choices are from the list you provided :I own ATP,AW.UN,DH,NPI,CML, I am considering buying RPI.UN,HPL.UN,HR.UN,LIQ,EXE.
Your comments and suggestions would be appreciated. As always thanks for the great service
Yossi

Q: Hi Peter - I really like your website; enjoy reading the member questions and your answers - very informative.
After reading the blog about maintenance of portfolios, I have two questions.
With a portfolio of $100,000, would the ideal number of stocks still be 20? And with my ACQ (AutoCanada) and STN (Stantec) becoming a larger percentage - would you still trim these or let them run up a bit?
Thank you

Q: Hi Peter,

Looking to put some funds in a contrarian sector with a timeline of ten years. Any recommendations about a particular sector that fits this criteria? Could you list a few recommendations in that particular sector ?

Thanks,

Arturo

Q: hi, i have about $20,000.available for equity investments and iam in my late fiftys.which stocks would you recommend for a 10 to 12yr. time horizon inside an rsp, thanks?

Q: Hi Gang, I have $20,000 available for equity investments. My current portforio is split 60/40 equity to cash. Of the current 5i selections how would you sugguest I deploy the Funds?

Thanks

Q: I agree with the stategy you have proposed on multiple replies that a staggered buying approach provides a greater likelihood of covering mis-timed purchases. Working within an RRSP, can you a few safe positions to park cash as the staggering buys of A-B rated equities takes place?

Thank you, and as always, find this site very useful.

Eric

Q: I sell a stock when my loss is 8%. But I've never really known when to accept the 8% loss and sell. Do I sell the moment the 8% loss occurs by using a stop loss order? Or at the end of the day the 8% loss is realized? At the end of the week? At the end of the month or quarter? There's always a part of me saying, "I'll give it another day, another week." Can you help me tighten up my sell strategy? Thank you. And I realize 8% is somewhat arbitrary. Some people will let a stock drop 20%.

Q: What do you think of IBD (Investor's Business Daily) as a publication and William O'Neil's method of stock selection?

Q: Hi Peter & 5i: In your answer to john's bonds question you referred to investments "exposed to" fixed income securities. I'm interested in how an eventual move off the bottom for bond interest rates will impact valuations of different kinds of equities. Aside from the obvious link to income stocks, that to some extent trade off of their yields, what kinds of companies have material exposure to fixed income securities, in terms a foreseeable negative impact on a company's growth, profitability, cash flow, or other relevant valuation metrics? For example, Cdn banks. I've heard that banks generally benefit from rising interest rates. But given their involvement in the fixed income market, would parts of their businesses suffer in a significant rates-driven market shift from bonds to equities? Thanks!

Q: Happy New Years.Its TFSA time.Does the 5i team have a portfolio build strategy for a TFSA? how should a stock be purchased in relation to the whole portfolio.as the account size (hopefully) grows,will that affect what is held?
Thanks

Q: Congrats on the site, I am a new subscriber and find the information useful. I am sitting on about 200k in cash at the moment. With the pseudo positive news coming from the states and the recent increases in most of your B+ to A recommendations, would you hold off on this entry point and wait for weakness? Would you be able to mark sensible entry points for some of your top recommendations ( Stn, Pki, bdi, cgx, Aya, csu, Bad, esl, Atp)?

Thanks,

Eric

Q: A recent customer, I am very pleased with your service. Best wishes for a happy & prosperous new year.

You have previously recommended holding about 20 equal weighted stocks in order to provide optimal diversification (with benefits of diversification decreasing as the number of holdings increases beyond 20 – and returns trend towards index-like returns). I believe that your answer to Mary Jean was to consider all accounts as part of the 20 holdings. I have several diversified accounts that are managed (by the same portfolio manager) and an account that I manage myself. Would you then suggest that I have less than 20 in the portfolio that I self-manage? If so, how much would you concentrate (less than 20 seems risky to me) ?

Q: Which stocks would you recommend for someone with no pension plan?

Q: Hello 5i Team, recently all of the news regarding the Fiscal Cliff has centered around not getting it resolved. If they do come to an agreement do you see upside potential in the market over the short term?

Q: Investment question. I appreciate we are all pretty much "fiscal cliff"ed out at this point. (Remember y2k?). However, I would be much interested in your take on the effect on the Canadian market should a resolution not occur by year end. Many seem to think that the resultant uncertainty would throw the U.S. market,at least, into turmoil (markets don't like uncertainty that they can't price in). No resolution raises the spectre of U.S. recession. They are our biggest trading partner. I'm just wondering what your thoughts would be on "going to cash" until the dust settles?
Thanks for all the work you do for us.
P.S. Do you send renewal reminders?