Investment Q&A

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

Q: It seems obvious to me that AI will be a growing and disruptive field for investment. What companies would be best for investments in this field. Are too many of them private or too small to be investable? I prefer Canada but will go to the US if necessary.

Q: Hi Gang
Our parents are in there 80 /90s good health They need 5500pm Have 300-400 m to invest for income. Their income is 3600 now 200 m in other investment. Property worth 400m. Own everything free and clear. Also do credits carry to next year

Thanks Mike B.

Q: Hi Gang

What is your over all take on Reits given BOC rate increase. Do u think it is priced in.

Thanks Mike B.

Q: You mention sectors, and list them on your portfolios. Is there a financial website that uses those same sectors? I'd like to go through my stocks, and note the sector of each. Thanks.

Q: Hi great team of yours, how important is the downgrade of a stock by analyst coming out suddenly . Usually follow by a drop of price. Should a long term investor worry about it ?

Q: Where one should look to find the asset location of a stock (e.g,financial,technology,oilland gas and etc).Both for Canadian and US stocks) ?Thanks

Q: Thanks for the link to portfolio updates from January 1, 2015.
https://www.5iresearch.ca/questions/60377
However, this is for companies removed from portfolios due to under performance.

Can you provide the same portfolio updates for companies added to your portfolios from January 1, 2015 along with reasons.

Q: Im wondering what fundamentals are you guys looking for when trying to judge if a stock is a good buy. I'm pretty new to investing and trying to learn, but there seems to be so much information on quarterly reports that i cant discern whats important or not and whats good or bad. Hoping you can shed some context to some of the numbers.

Thank you

Q: Good morning
Peter: 1. When selling options, what is your preference ? Call or Put options
2. What is your favorite time frame for selling options? ( 2 weeks, 4 weeks etc. )
3. What is your approach for choosing a strike price?
Thank you for educating all of us.
M.F.

Q: Hi Peter, Ryan, and Team,

I am overweight in Consumer Staples and underweight by an almost equal dollar value in Information Technology.

Present holdings in Consumer Staples include ADW.A, ATD.B, ECI, PBH and SAP. (SAP is the only one that's down in value).

Present holdings in Info Tech include CSU, ENGH, KXS, OTEX, and PHO (PHO is the only one that's down in value).

Which stocks in the Consumer Staples sector would you trim/sell, and which stocks presently held in the Info Tech sector would you add to at this time? (If there are compelling reasons to add more Info Tech stocks, your suggestions are welcome.)

Also, is the thesis still the same for SAP? It's been a fairly disappointing stock, but of course your great recommendations have really enhanced our overall portfolio. Thank you!

As always, I appreciate your valued advice.

Please deduct as many question credits as you deem necessary.

Q: Good morning
A fundamental question regarding rising interest rates. Does a period of increasing rates typically encourage an inflow of foreign investment into domestic equities or an outflow? Based on your past experience, how has the TSX performed under increasing rates?

Thank You
Clarence

Q: Hi 5i Team, when someone looks at the financials of a company for the sustainability of the dividends, should we concentrate on the earnings or the cash flow numbers? I have often read on this site that the cash flow is more important than the earnings. Would that be true for most companies or only the ones in some industries? Thank you. Mario.

Q: Do you have any thoughts on the Mackenzie Canadian Growth A Fund and Dynamic European Value Fund?

Q: Hi 5i team,

I am trying to save to retire early or if the doesnt happen then just have much more saved when I do. I know I should max both TFSA for my wife and I, but how much %-wise should I put in a registered vs a non-registered? I'm stilll 14 years away from my ideal retirement date and about 24 from my latest. Right now I have about 30% of my total saving in a non-registered account, and have yet to max out my wifes RRSP but should I just put it all in a registered account then use just the TFSA for liquidity? I'm sorry if the question is not quite within the purpose of 5i, but I do value you guy' opinion highly.

Thank you

Q: Hi Gang

Our parents are in there 80/90s , in fairly good health, and are just now moving to a retirement home, which will cost approx $5000 pm. Their assets are largely sitting in cash. Can you recommend investments to create more income for them? They have 300-400M to invest.

Thanks Mike B

Q: On June 28 you answered a question for me about using market/limit orders and suggested that I should use them for illiquid stocks. I was wondering if you could provide a concrete example of what you would do as I am having trouble understanding how best to buy/sell in these situations. If, for example, a stock had a bid of $34.61 and an ask of $34.90, at what prices might you submit for either a sell or a buy of that stock?

Thanks for your help.

Paul F.

Q: Good day Peter and 5i Team,

This question is basically about asset allocation. My goal is to gain more exposure to global markets as opposed to the Canadian market. (United State, Europe, and Asian markets). I would like to gain this exposure by investing in, what you consider to be the highest quality ETF'S currently available with exposure to these markets. I understand there are countless possiblites available; therein lies my problem, but I would appreciate keeping the number of ETF'S to a minimum. So, what is your best investment for in each of the sectors for capital gains, some dividend support, and lower fees for overall investment appreciation?
-Europe?
-Asia?
-United States?
Keeping in mind the current condition of the world economy, what percentage of my funds would you designate to each ETF?
Thanks-you for your continued support.

Q: The fact sheet for Vanguard etf VIG and VCR mentioned the fund total net assets and the share class total net assets. What is the meaning of those terms?

For Vig the total net assets amount to $30.2B and the share class total net assets amount to $24.4B and for VCR those respective numbers are$2.5b and $2.3B.
What is the reason for the difference between the two number and why is it that the difference is larger for certain ETF?

Q: Hello. My 31 year-old son has been diligently saving for his future retirement, and has a combined portfolio of $80,000 (TFSA & RRSP). The money is mostly divided between Canada (45%) and USA (44%), with a small bit in the International market (11%). Under your advice last year, he sold his Canadian ETFs and bought some individual stocks. The result is amazingly better than the index, so THANK YOU!

Now, I'm wondering about his US portfolio. In the US part of the portfolio, he has several ETFs: VFV, VGG, ZLU, XSP - 42%, ZQQ- 18%, Health - XLV - 12%, and a remaining $10084 CAD cash (28%) that can be dedicated to US equities. What should he do with the money?

Alternatives: 1) increase his US ETFs. 2) buy individual stocks. 3) wait until the dip...
What should be the strategy for this portfolio? I'm interested in buying GOOG for him for a long term hold, but the price is too high for such a small portfolio. Any thoughts or suggestions? Thank you!