Investment Q&A

Q: How useful have you found valuation methods like Earnings Power Value, Graham Number and Discounted Cash Flow analysis in stock selection?

Q: I see a couple of concepts repeated in your answers: 1) if you have a short term need for cash (buying a house within 1-2 years eg) you should hold cash or cash-like investments (i.e., not equities), and (2) in general, some equity investments may be ok, but only for a 3-5 year hold.

Can you walk through the mechanics of how to deal with the situation of investing when you know you'll need cash after, say, 4 years? Do you buy good diversified equities (eg BE portfolio) and hold for 4 years, committing to yourself to sell only on the day before the 4-year period is up? Or do you buy such equities, but then slowly rotate into cash (when?)? Or commit to rotating into cash at the 2-year mark or some other arbitrary date? Or do you assess the situation at the 2-year mark (e.g.) and hang on, or not, depending on whether the portfolio is high or low?

Wondering what your thoughts are on buy/sell strategy in such a scenario. Thanks.

Q: Are there any reasons to buy bond ETF now ? They almost certainly will go down in the next few months. For the fixed income part of the portfolio is it not better, at this time, to simply stay with GIC ?

Q: How do you suggest playing the upcoming increase in interest rates >

Q: Hello 5i.

I'm currently putting together my RRSP income portfolio.
My plans are to invest approx 50% stock or Stock-ETF and 50% secured.
At the moment 50% secured is in GICs.
I have 30% stock exposure now. ENB-BNS-EMA-BCE-SRU-ECI about 5% in each position.
I'm looking for ideas to diversify my last 20%.
It has taken me 6 months to put this together.

I look forward to your suggestions..

Q: Hi,
I have approx $90k balance in US dollars in my US$ account. Additionally I have a number of unhedged Mawer Funds which have a significant exposure to US$. With the rising CAD$ I find that my account size is shrinking just due to US$ currency exposure.
I was thinking of buying several inter-listed Cdn Banks on the US side and then getting them transferred to my Cdn Acct to lessen my overall US$ exposure. Do you think this would be a prudent move or have you any other suggestions.
Thank you.

Q: Currently in the ETF Model Portfolio (Money Saver) you have the following US ETF's" XLY VGT IWO VIG SPY. Can you give me a Hedged substitute that I can buy on the TSX. As an example I would use XSP for SPY. XSU for IWO. Make sense? If this is OK in your opinion what would I do with XLY VGT VIG.

Thanks for the discount on the Monthly Fund and ETF report. I spent Canada Day reading it and found it very information. I know you are thinking I must have a very boring life!!!

Regards

Q: Is writing covered calls on a US Market Index ETF (e.g. SPY, QQQ) safe?

Q: My RRSP portfolio is comprised mostly of individual stocks and I am considering moving to an ETF portfolio. I would like some US exposure and I am looking at the BMO suite of ETF options for this. Are there selections that should be avoided for withholding tax reasons? I understand that a withholding tax may apply even inside an RRSP for US holdings that pay dividends.

Q: Hello- we will be purchasing a house in the next 3-6 months. We have $25,000 that we would like to invest to make a little interest between now and then. Do you have any suggestions about where we could put this money?

Thanks

Q: Re Company information
In comparing an annual information form and a management information circular for an annual meeting, is the latter comprehensive? If not, what type of information is only found in the AIF?

Q: What do you think of United Utilities Group. Should it be a long term hold in a portfolio.

Q: Michaels question on June 30 regarding portfolio watching.I think most subscribers watch these/their portfolios on a daily basis (I know I do) but if a person feels they are becoming obsessed with stock watching I think looking at the Portfolio Performance (monthly) reports that you send out. These results (1,2,3 years) speak volumes for themselves. A 10 or 16 % return on a portfolio is beyond expectations and hopefully leads to confidence in 5i's direction ...if we listen.

Q: Hi there, not really a stock specific question but more a psychological/behavioural question. Based on your experience, how often should one look at their portfolio? I, probably like many others, look at my portfolio far too frequently. I suspect this can be stress inducing and can lead to more possible losses than gain? How often do you recommend one to look at their portfolios? Thanks!

Q: Morning folks,

Could you please comment in regards to establishing positions in good quality companies that are so called expensive. I hear money managers refer to companies as to rich and need to wait for a pullback before getting in. With some companies a pullback might not even happen. As a long term investor does it really matter when an investor buys in. Could you elaborate.

Thank you.

Q: Hello Peter,
I'd appreciate your insight.

What do you think about the suggestions that money is moving out of technology and some of it will find its way in the biotech sector? I do not hold any US tech but do hold the biggish position in IWO and IWM combined. With no fresh money, what do you think of reducing the positions in either or both IWM/IWO combine and invest in IBB?
The second aspect where I would like your thoughts is on the Financials both side of the border. With BOC likely to raise rates atleast once, the TSX may drift down, maybe even a sharp reaction. What do you think of reducing TSX exposure, buying US dollars and investing in US financials for the second half of the year?
As always, appreciate your views.
Regards
Rajiv

Q: I want to invest about $400000 new money, over what time period should I invest ? Is this a good time to get into the market or should I wait for possible pull back. or should I get into the market now by buying all the companies in the 5i income portfolio? or should I invest half now and half if the market pulls back.
Or should I just park the money in HFR until oct or nov?
Thank you

Q: Wow! I asked my first question and it was answered with an hour or two. Spectacular service folks (not just the quick answer, but everything else too). I have really enjoyed this service over the last couple of years. Oh yeah, and that goes for the ETF and Mutual Fund Update as well as Canadian Money Saver Magazine. Much appreciated.

Q: Re Jim's question 26th June about his daughter's RSP & TFSA.
Don't think she can get the dividend tax credit if shares are held in these accounts. Did I miss something?

Q: I am wondering about the benefits of using market and/or limit orders. My normal purchase is between $5,000 - $10,000 and I am a long hold investor type. I have used the limit option maybe twice and frankly, found it kind of stressful - always having to check if the order got placed or looking to see if the share price is increasing and therefore I miss out altogether. My initial reaction is that in 3 years I won't really care about the few dollars I might save today. Or am I being too blase about this and throwing money away needlessly?

As always, appreciate your insight.

Paul F.