Investment Q&A

Q: In today's Globe there is a lot of doom and gloom news about Bonds, especially from Bill Gross, the bond Guru.
As (an almost) a senior, should I worry about my bond ETFs? I a well diversified in Bonds, Short/medium term, Corporate, US and International.
If I have to sell them now, where can I divert that money?!!
I have preferreds ETFs, dividend ETFs, REITs. Should I increase my % in these areas? Or take the risk and increase the equity portion of my portfolio?

Thanks in advance.

Q: Sorry, I should have clarified in my previous question, that I was looking for a Dow etf on the U.S. exchange as I want to purchase it in usd. Can you recommend one?

Since I currently only own IWO i thought the Dow would add a bit more stability and income than an s and p etf. Is this a good strategy?

Q: Re: the questions of max percentage small caps for a long-term investor that does not need the capital (answer: 30% max) - what do you consider a small cap? what do you consider mid caps? I am not sure but my understanding is that definitions range on that front. Would the 30% include mid caps too? Many thanks!

Q: Peter you have mentioned previously there is a large number of shorts on the S&P.(near record number since 2008).Is there a site that tracks the number of shorts on the S&P? I see this as a catalyst down the road if the market decides to break out,it would be interesting if there is a tracking system on this.Thanks Cal

Q: Hello 5i team,

I'm currently building a portfolio from scratch for my mother who is 61 and retired. We are thinging conservative value and income equities for 10+ years.

Which 5 stocks, either from your balanced or income portfolio would you use as building blocks? If possible, can you recommend stocks that are fairly priced at the moment?

Thank you for your excellent service,

Cam.

Q: A question related to portfolio weightings. I used to only have individual stock names and a fairly equal balance across various sectors. I just purchased an market ETF the other day (VUN) to get additional exposure and classified it as "other", but it didn't feel right when I noticed that the weighting of my other sectors went down.

As an example, if I had x% in a particular sector, but made a large contribution due to new cash into a market ETF, the original x% in that sector would now show up lower in my own calculations. How do you account for this? I don't want to be overleveraged in a particular sector by mistake.

Q: This question may be out of your area of expertise but I will assume, maybe.
I have come across a fascinating investment, income vehicle. BMO retail has a product called -BMO Cash Flow Plus Deposit - Here is a quick overview.
On a deposit of $100,000 they will pay you, tax free, $500 per month for 15 years. This is a "return of capital"
After that time a sum will be returned to you which is the original amount that BMO has invested rather aggressively. Needless to say that with the 15 year compounding timeline and investment posture this could be substantial. This would be taxed as a "capital gain" There are a few other features but this is the gist. On the surface this is interesting. Any hidden aspects or dangers?
Thank you.

Q: I noticed a comment a couple of days ago about the quality of your portfolio reviews. I had one completed a couple of years ago and I echo the sentiment. They are of very high quality and well worth the cost.
For all of us to continue learning, please indicate the top five mistakes you continuously see investors making from your portfolio reviews.

Thanks

Paul

Q: Are you aware of cases where guest portfolio managers on BNN got caught recommending stocks that the firm/themselves are shorting? It's hard to believe it's not happenning. My best example is Bruce Campbell of StoneCastle. His past picks are absolutely horrible (-43%, 93%, -57%, -88%, -90%, -70%, -51%). Are regulators actively looking out for manipulation through recommendations on BNN? I really hope so. I use this site to review past picks. Other members might enjoy reviewing past picks: http://www.stockchase.com/expert

Q: Peter and team:

If/when Ms. Yellen decides to increase US Rates what do you feel the impact will be on higher dividend payers such as utilities and riets.

What would be the recommended vehicle for parking funds for the next two years to safely preserve capital while earning some modest return.

Deduct two as you see fit.

Thank you as always

Phil

Q: Hi 5i, how would you be approaching the Brexit vote from a portfolio perspective? I have a few names that are very exposed to the GBP/USD exchange rate (i.e. CXR, IT and ESL). Should I be taking some off the table prior to this vote or is it too late and most of the fear is baked in to current prices? In your opinion what direction do you see the GBP going if there is indeed a Brexit? I've heard arguments both ways on long and short term. Thanks again.

Q: I'm sitting on some cash and will be purchasing a house in the next year. Which makes more sense - to put down a minimal deposit and invest the remaining cash or to put down a more substantial deposit?

Q: Greetings to the 5i team. The last question I noted on sector weightings was quite some time ago now. Your response to a member asking about weightings for an income oriented portfolio was I believe as follows: 10% Cons Disc, 15% Cons Staple, 5% Energy, 15% Fin, 10% Health, 10% Indust, 5% Real Est., 5% Tech., 10% Telco, 15% Utilities (no allocation to materials at that time, although I know you have advocated a 5% "insurance" in gold in the past). Would you please indicate any changes to those percentages if you were to answer the same question today? I'd also be interested in how they might change if the question was for a more income/growth balanced portfolio. On a side note, I think I consider my membership fee
mostly for research but partly for therapy, since I find your reasoned responses to various market fears a calming influence! Cheers,

Q: Hello:

I would appreciate if you can recommend some small cap Canadian Technology and Canadian Health Care stocks.

I would also appreciate if you can add the following Canadian Mining stocks to my watch list:

Canadian Zinc (CZN)
Polyment Mining (POM)
Excellon Resources (EXN)
Golden Predator (GPY)

Thanks a lot. Yasmin

Q: Well, the mining stocks are way up again today, and some analysts are talking about a bull market in commodities. I hold gold and oil only. Would you advise venturing into any of the other commodities? And if so which and what company?

Q: Matt's question about the U of T pension plan also sounded to good to be true to me so I looked on their website. The pension does not provide the value of the full salary, but rather what I've pasted below from the website:

1. Highest Average Salary/Wages is the annualized average of your highest thirty-six (36) completed months of
salary/wages, while a member of the Pension Plan, during your current span of employment with the University, prior to
your Early or Normal Retirement Date. “Salary/Wages” means your gross regular monthly salary before deductions,
annualized to 12 months for sessional employees and to the 100% salary/wages equivalent for part-time employees. “Gross
regular monthly salary” includes Academic Administrative Stipends, but excludes all other payments to a maximum salary
limit set out in the Pension Plan, currently set at $150,000.
2. Average Canada Pension Plan Earnings Ceiling is the average of the Ceiling established by the Federal Government for
Canada Pension Plan purposes during the last thirty-six(36) months of participation in the Plan prior to your retirement.
3. Pensionable Service means the total of all of the years you have been participating in the Plan, and any earlier University of
Toronto Pension Plans during your current span of employment (excluding participation in the historical part-time Pension
Plan prior to July 1, 1987). Effective July 1, 1987, part-time employees accrue pensionable service at a rate equivalent to
their percentage of full-time worked.
Your annual unreduced pension is calculated as:
• 1.6% of your Highest Average salary/wages up to the Average Canada Pension Plan Earnings Ceiling
• 2.0% of your Highest Average salary/wages which exceed the Average Canada Pension Plan Earnings Ceiling
• Multiplied by your years of Pensionable Services
The lower percentage app

Q: We plan to gradually tweak our (equity) holdings over 2016 to further optimize fees and diversification. Your thoughts on optimum geographic mix and how best to achieve that will be appreciated. (For context: Conservative, income-oriented portfolio, 1/3 equities, currently 90/10 Cdn/US currency and 80/20 Cdn/US stocks.) Thank you.

Q: I was recently told that if I sell my investment in AGF Fixed Income Plus fund, there was a penalty to be paid. I could not get much more info from the broker or the AGF web site.Is this a portion of their MER or can you enlighten me.
Thanks

Q: Hello, what do you think of MLPY and MLPN which I think are two ETNs traded on the NYSE? Both of them are high-yield investments correlatated to the price of oïl (if I am correct). Is it too risky? Thanks, Gervais

Q: I have 4 companies that make up a significant part of my portfolio (HCG, GIL, ATD.B, SJ). With the exception of HCG I have been trying to sell them at or near 52 week highs. I have been trying to sell them since the beginning of the year and so far I have been unsuccessful. What makes these trades difficult for me is that I would be buying all these companies if I did not own them already. My question is do you use the same approach when selling for portfolio allocation reasons versus fundamental reasons?