Investment Q&A

Q: Sharesight. This is exactly what you should implement into your services!!!!! It is such a perfect add on, that we will pay for, in my humble opinion. I am sure that the figures are not complete thru my discount broker or the port tracker that I use.
Anyhow, I would appreciate your opinion on it as I am contemplating it because accuracy is all we have to work from.
Also I am considering all ETF's thru Vanguard although I hold with I shares, Purpose and a couple of others. I appreciate your opinion .
IF 2 CREDITS fine.

Q: Do you have any comment on Bill C 27 regarding Defined Benefit Pension Plans being altered to Target Pension Plans which would introduce uncertainty in the size of the pension as the employer would shift risk to the employee. I am a retired member with a Defined Benefit Pension. The bill applies to Federal and Crown Corporation pensions but I can see the bill potentially affecting all defined benefit pensions. The bill is now in second reading and was quietly introduced. Actuarily sound pension plans would likely not be as vulnerable as those that are not.

Q: I asked a question about staying in unregistered equities or paying off my mortgage at 2.79% a few days back. I was a bit surprised for equity guys to tell me to pay off my debt at 2.79%. I get it and basically asked the question because that is what I am likely to do...however doesn't that seem like a pretty low bar even when risk is factored in? Even if you assume I would be taxed at highest rate of 33% you only need to get me 4.2% to come out ahead. So can I interpret your answer that you expect your balanced equity portfolio to return below 4.2% in 2018 and that you fear your current run of 8% annual returns might be coming to an end?

Q: I've made a ton of money on Warrants but don't know of any site that reports New Warrants as they are issued. FP releases a monthly report on the 1st. Business day each month....but that's too late as most are out of the money by that time.
Until a year ago the Star would everyday display high volumes and I caught the Warrants from there.....but they stopped reporting on that.
Do you know of any site that reports Warrants as they are issued?
Thanks for the great service. I've learned a lot and made a lot of money from it.
Cheers. Austin

Q: Here are two strategies. I sense that a lot of us are doing 2) but that you would favor 1) am I right? How strongly do you feel about the pros and cons of each.

1) Pick one (or more) of the 5i portfolios and invest your entire nest egg into it. Keep the asset levels in sync with changes you make. Keep doing that for many years no matter what your emotions may tell you.

2) Pick and choose only certain stocks you want to buy looking at the 5i portfolios, also BNN top picks, the "Buy" ratings on your online investment tool, similarly with stocks not in 5i portfolio but that are discussed here in the question section, etc. etc.

P.S. I ask in the context of a basic semi-savvy investor who is no way as knowledgable as any expert, does not have the time or ability to become one, is retired and whose worst-case investment needs are simply to beat inflation over time to preserve purchasing power and deliver an income stream that does not run out before death.

Q: 5I has been doing a great job and I respect your standing on stocks and your answers. You mentioned staff was hard to hire, obviously you have done a good job. Your service is great I have been with 5i and Canadian Moneysaver for a long time.Best Advice out there for the money

Q: from my week end "musings"The Reality of Long Periods of Underperformance
The following is from Meb Faber.  I felt it worth sharing with you.  Please feel free to share it with your clients.
One of the biggest challenges of investing is long periods of underperformance, or outright negative performance and losses.  Cliff Asness has a fun piece out on his blog where he talks about 5 year periods in stocks, bonds, and commodities and basically how anything can happen.
Unfortunately for investors there are only two states – all-time highs in your portfolio and drawdowns.  Drawdowns for those unfamiliar are simply the peak to trough loss you are experiencing in an investment.  So if you bought a stock at 100, and it declines to 75 you are in a 25% drawdown.  If it then rises to 110 your drawdown is then 0 (all time high).
One challenge for investors is how much time they spend in drawdowns.  It is emotionally challenging largely since they anchor to the high value in their portfolio.  If your account hit $100,000 last month up from $20k ten years ago, likely you think of your wealth in terms of the recent value and not the original $20k.  If it then declines to $80k, many think in terms of losing $20k rather than the long term gain.
I thought it would be interesting to look at a few asset classes and ask how long they spend in each outcome – either all-time highs or in a drawdown.  Below is a chart of a basic 60/40 portfolio’s drawdown since 1972, REAL RETURNS.  Notice how brutal the high inflation 1970s were to the portfolio:he investor only spends about 22% of the time at new highs, and the other 78% in some form of drawdown.  A few values for common asset classes below….
• US Stocks 17% new highs, 73% in some form of drawdown
• Foreign Stocks 12% new highs, 88% in some form of drawdown
• Bonds 16% new highs, 84% in some form of drawdown
• REITs 16% new highs, 84% in some form of drawdown
• Commodities 9% new highs, 91% in some form of drawdown
• Gold 4% new highs, 91% in some form of drawdown
• 60/40 22% new highs, 91% in some form of drawdown
Meb concludes, “So if you’re going to be an investor, get used to being a loser!”
print ONY if you think worthwhile info for members
CDJ

Q: Is there a website that can give me stock charts longer than 10 years. 50 years ......
Thank you

Q: At one time the was an "up tick" rule regarding shortselling. Could you review that plus the effect of its removal on shorting stocks.
Thank You
Clarence

Q: Hi 5I- We are a couple of RRIF collecting seniors with 63% equities, 20% in your income portfolio minus AGU, CPD ,CVD and XHY, and 17% cash. Please comment on our plan to take some profits from our equities to add to our cash and invest half of cash in the missing parts of your income portfolio and wait for a downturn in the market to deploy the rest of the cash to your income model. Would you suggest another option? or add to some of our downers instead, eg. loblaws, enbridge, kwh.un, disney? Appreciate your advice and service, thanks.

Q: Hi 5i team,
for an RRSP account, I am looking to deploy cash and purchase one or two stocks per sector. Presently, I am well diversified by both sectors and geography.

At this time, what would be your favorite stocks based on valuation and potential for dividend growth for each sector?

In my TFSA and RRSP, I already own the following stocks you like: ENB, CXI, GOOGL, GUD, OTEX, PHO, SIS, SLF, TD, WCP and ZCL.

Thanks,

Dan

Q: Is your subscription cost tax deductible as a carrying charge (management expense) provided investments are outside of TFSA's?

Q: Hi Team, Every day for the last week I have been following this stock on the OTC website. My friend bought some 30 days ago at .30 cents, today the stock is $2.29 and he is now up 660%. How can this penny stock be rocketing into outer space with an average daily trade volume of 20,000s? I mean look at the OTC site...the share offerings are in the 100s. It seems to me it's breaking all the trading rules ever thought of. Up, up, and away.....how high will the stock go....and there is no news and no Insider trading?? CRAZY!!!
Can you explain to me both what is going on how is it going on with this stock? PS I have not bought any stock yet. Thanks Team, can't wait for your reply on NRBT.

Q: Cannot find end of October update, has it been released?

Q: 5-I,

Love the new website, particularly the ability to mark questions as favourites ! Obviously a lot of thought and work has been put into this.

You advertise as being completely unbiased as you do not allow your staff to own stocks you follow or comment on. I would like to put forth my thoughts on this and invite other 5-I subscribers to as well. As an investor I want as knowledgeable and thorough a person as possible on the guiding end. I do not care what stocks he or she owns. I believe most of the 5-I subscriber base relies on stocks that are traded in sufficient volume to negate any possibility of a pump and dump routine of a staffer. I follow two popular investment writers from the Globe and Mail and if either ever writes about a stock they own, they simply acknowledge their personal ownership. Actually I feel better that they have the confidence to invest in it themselves.
I think this will come into play even more if you decide ( hopefully ) to someday cover American stocks. I really don't want someone advising me about stocks who doesn't invest in any equities at all. You would not attract the best candidate with this approach. 5-I and its client base deserve as good a quality advisor in the future as you currently have now.

Paul

Q: Hi, I am helping my in-laws manage their retirement savings, and I would like to have suggestions for investing the remaining balance in my father-in-law's RRIF (about $7000). The rate of withdrawal is fairly high as he is now 92. I was thinking the best way would be to invest in a balanced, dividend or bond mutual fund, to avoid commissions. This mutual fund, composed of various ETFs, is managed by Larry Berman. It seems to generate a decent and constant dividend, without much volatility. The series D has an MER of about 1.17%. What do you think of this fund? Would you have other suggestions? The overall portfolio is very diversified and of course fairly conservative. Thanks for your service.

Q: Not a question just another compliment, I was enjoying working through your new website and reading "the great new website comments" as I read questions and answers and then I clicked on the AQN profile while reading a question. Not a a great new website ..... A Fantastic New Website! What a wealth of information you have put in. I usually read the questions with another monitor showing one or two stock sites so I can see closing prices, dividends, graphs etc at the same time. You now have all that plus. Great job and many thanks, After an hour and a half on here, I have a feeling that there is still more to discover here. Am most happy that last week I extended my subscription to June 2020!
Thanks again for your insights and now your access to more info.

Q: Great new website.

My question is about interest rates. I saw an interview recently discussing interest rate cycles, stating that we have have had 30 years of interest rate decreases, that interest rates have now bottomed and we have begun a long term trend of rate increase. The guest also said that the last long term rate increase cycle was during the 1950s and 1960s. During that 20 year period, the interest payments on bonds were mostly offset by capital losses, resulting in a net return of less than a half of 1 percent annually over 20 years while stocks returned 19% annually over that period. In your opinion, what would be the catalyst for a repeat of this scenario? Does this mean that retirees should shun bonds in favour of stocks even though the risk might be higher?

Thanks and great work

Q: This is just a comment on Connie's question regarding RIF withdrawal.
If Connie doesn't need the cash, withdrawal can be in kind by transferring the security to her cash account. At TD they do it without any charges. Then she can sell the stock at a more opportune time or when the cash is needed.

Q: I have listened to the video twice and activated various functions using double browsers simultaneously . Very impressed with your upgrade. Kudos for a great job. Very powerful tool. Thank You.