Investment Q&A

Q: I have a long time to wait on investments and don’t have much interest in trading, as I prefer value investing.
1)I’m still up 30% on Nvidia, with a long term in mind. Do you think it’s better to sell out now and buy back later, or do you see enough growth and value coming to make it better to just sit on and wait?

2)I’m trying to build the core of my portfolio around long term holdings in strong dividend payers (with a bias towards aristocrats) and use all drips available, and even proxy drips through my broker when I need to. Could you give me your top 1-3 dividend payers for each Sector (with a bias towards dividend growth and safety/ aristocrats).
Also, I’ve read lots of articles that state that dividend investing on average out performs the market by a few% per year, just without most of the wild swings. Do you agree?
Hopefully my rambling makes sense...
Thanks

Q: Hi Peter/Ryan

Looks like lots of stocks are at adjusted valuation now. I will appreciate if you can list couple dividend and bit growth sleep well stocks for RRSP account irrespective of industry.

Thanks

Q: Ryan; I’m going to implement the “ conservative “ portfolio as it suits both mine and my wife’s situation. My question is - in this volatile market would you just invest it all at once or step in over a few quarters? Thanks.
Rod

Q: As you have suggested for GC one should not buy more than $100000.00 in view of insurance coverage. I have 2 question
1-Is there a 5 year ladder type GC available-as package ?
2 -if one buys 5 of 100000.00 ladder type GC from 1 financial institution ( bank or trust- 1 year ,2 year and etc. ) how the insurance coverage would work ?.Is it each one is covered separately or only 1 insurance is covered for all, max. coverage is 100000.00 for all ?.Thank you

Q: Dear Gentlemen,
Witch sectors does 5IR will suggest now ?
From these sectors can you please suggest 2 stocks Can or US.
Income is not a priority, do not need the capital for the next minimum 5 years. My PF is mainly a mix of BE PF (55%), Growth PF (10%) and 35% (US stocks & ETF)
Thanks.
Best regards

Q: How are corporations classified into different sectors? For example: why is Savaria Corp considered to be in the "Industrials" sector rather than "Health Care"?

Q: It seems Cdn/US markets have reached a very high valuation for many stocks/sectors and investors are trying to find a reason (minor earnings miss etc) to get out of the market and build some cash positions. Interest rates will still go up and it will add more pressure along with all other uncertain factors which would lead to more panic selling and high volatility in the markets. Worst case scenario the markets will collapse considering the 10 year bull market run and tightening liquidity, lower stock buyback etc. Keeping this theory in mind is it a good idea for small investors like some of us 5i subscribers to build at least 30% cash and stay invested in defensive sector stocks like Utilities, REIT, FInancials and Staples instead of buying on dips in Tech, cons disc, Industrials sectors. Last few days many solid companies in 5i portfolios in Industrials, CYcylical sectors have sold off due to minor earnings miss. We can re-deploy the cash once the interest rates stop increasing and the market buy signals are positive in 2019. Would like to get your opinion and recommendation on this thought assuming smart money has started getting defensive and getting ready for next fall/recession.

Thanks
NInad

Q: Dear 5i
If you had 6 months before you were planning on retiring and considering the volatility in the markets, what percentage of fixed income vs equity would you have in place in your portfolio ?
Thanks
Bill C

Q: It seems like a lot of companies are getting decimated on slower growth and future lower guidance - and in some cases even good results are also getting decimated. This does not seem to be happening in isolation and feels like a broad sentiment. Is this the sign of a weakening market? Does this typically indicate something occurring in the near future?

Q: G &M no longer provides complete lists of New Highs for free.
5i provides a maximum of 10 names.
Would you know of a replacement site? I get my ideas from such lists.

Q: Hi Peter & Ryan,

The company I work for recently brought in a speaker, Salim Ismail from Singularity University, to talk about 'exponential organizations'. The basic premise was to discuss the speed of innovation and disruption that's occurring today. The improvements in various technology is doubling every year. I can't help but wonder if I need to rethink some of the companies I've invested in (from your portfolios).

For example, he gives the example of the drive train in a combustion car having about 2000 moving parts, while a Tesla has 17. There's a small company in the US called Local Motors that has a car with only has 50 parts total and takes 1 man hour to assemble, compared to the average combustion car that has 25,000 parts and takes 1000 man hours to assemble. What does this mean for a company like Magna? Also, with so few parts, there won't be a need for car maintenance. The use of autonomous cars, which should result in less accidents - how does this affect Boyd? EV's in China are also doubling every year, now at 5%. It doesn't take long before it becomes a very significant portion of the market.

Another example is the energy sector. The price performance of solar energy has also been doubling every 2 years for the past 40 years. At this pace, the world supply of energy could be met in just 13 years. The costs of solar (unsubsidized) has been dropping and is now cheaper than all other forms in the US. Obvious question is where does that leave the energy and pipeline companies? Maybe we should be more focused on solar panel makers and solar energy storage. Again, the shift from combustion to electrical vehicles comes into play here as well.

If a company isn't going to be a disruptor (like Tesla, Google, Uber, Amazon), they at least need to be flexible and adaptable. is this a key metric when you grade a company?

I'm interested in your thoughts.
Thanks

Q: In answer to Stuart, who was looking for somewhere which would give him information on his stocks, I have found that Yahoo Finance does a good job of this. Once you put in your list of stocks you'll get a grabbag of the latest stories at the end of the list every day. Or you can click on any given stock, page down past the usual financial information like the stock chart for today and find the latest story on it, including earnings releases. Works for both US and Canadian stocks.

Q: In attempting to assess the performance of my (mainly 5i) portfolios, how dividend %ages determined? In other words, do I divide dividend $ by the "book cost" of a portfolio or by the "market value" ?

As always... as learning experience.

Thanks again.

Q: Hi,

What is your recommendation in terms of no of stocks should be held between US and CDN markets among all the sectors. For Canadian stocks I am focusing on about 22 stocks from the BE, INC and GRO Portfolios with heavy focus on FInancials, Energy, Utilities, Materials and also other sectors. For US stocks I am targeting for 20 - 25 stocks in Industrials, Healthcare,Tech,Con cyclical and Staples primarily large blue chips in growth and dividend income.

Appreciate your guidance as always.

Thanks
Ninad

Q: To the 5i Team - With the tax loss season approaching could you name a few companies that still have good fundamentals but for one reason or another will probably (if not already) be subject to tax loss selling. Sector and dividends are not a factor in this question. Thanks.

Q: Hi, in the past I have always invested near 100% in equities. But now I am a little fearful of the market, have sold some equities and wish to move money to a good interest paying parking spot. Time horizon - 1-6 months. My investments are self directed with TD Waterhouse. Can you suggest a fund?

Q: You've recently mentioned the potential effect of activities of money managers on this market, specifically buying and selling to make targets to ensure their best bonus and keeping up with their competitors.

When does this sort of "bonus securing" activity occur-now near the end of the year? Every quarter?

I suppose I'm hoping to know when large institutional buying and selling are at their highest and lowest, over the course of a year.

Cam

Q: This is a market question. Yesterday, markets were up nicely until news of more US tariffs on China came out, then they plunged. But they plunged deeper in Canada than in the US. Would you have a try at explaining why that would be given our valuations are cheaper and US tariffs on China would have no impact on us? It seems every time US markets drop due to China tariff concerns ours go down more. Are we in a bear market in Canada? Morgan Stanley has said the US is now in a bear market and all rallies should be sold because it's going to get worse. Would you advise that here?

Q: Hi guys:

Could you provide me a couple names that have been beaten up so much that it’s time to back up the truck for a 3 to 5 year hold.?

Thanks for your expertise
Mark.

Q: Hi,

Does your answer to a previous question on the sector weightings applies to US stocks also and will 5i Portfolios also need to be adjusted ?

Thanks
Ninad