Investment Q&A

Q: Good morning, i have taken the Canadian Securities Course, but what else would you recommend to get more educated and familiar with all of the financial ratios in a company, thanks? They seem to have different meaning from industry to industry.

Q: Hello,

After reading the article on 5i 'Investment Model Portfolios' - May 6, 2019 I had a question regarding this post in relation to my current equity portfolio.

My portfolio analytics indicates that I should be allocating 25% to Canadian equity, which seems high to me. This article mentions that the big providers/firms allocate about 31-32% to Canadian equities, which I found a bit surprising, given Canada is only about 3-4% of the global equity market. The article does note that for Canadians, having a home country bias can make sense (dividend tax credit and tax reasons), which makes sense.

My question is this. For the average Canadian investor, does 25% of one's equity exposure to Canada seem high (even given the added benefits noted above)? I am guessing there is no 'perfect' answer to this question however, I look at this as making a big bet on oil and financials. If Canada is 3-4% of the global equity market, could one not argue that even doubling Canadian exposure, say up to approximately 10% of equity portfolio, be a reasonable allocation?

Thanks for your insights on this.

Q: Good morning:
What type of stocks should be put in a tfsa compared to a cash account. Should it be all growth stocks with no dividend or all dividend paying stocks or a combo of both in a tfsa.
Thanks
Mark

Q: Hi Everyone at 5i! My daughter has a 120K inheritance which we want to use in the next 3 to 5 years to put toward buying a house. I thought she could do the following: put 10K in cash...55 K in GICs and 55 K divided among SPY, IWO, CDZ. XIC and XWD. Does this sound reasonable to you considering their investment time period. Cheers

Q: Hi there, I've been invested in TSX listed stocks for the last few years. I recently transferred over a small amount (~2%) of my portfolio into USD thinking of buying Slack. This would be my only US holding. My question is, what would be your favourite listed US stock at the current moment if I were not to buy Slack? I am an investor who mainly follows your BE Portfolio with a tilt towards growth (ie: swapped a handful of names and replaced them with GSY, SHOP, LSPD etc).

Also, the market looks like it's been running up lately. Do you think we're possibly going to dip in double digits later this year (similar to last year's dip)? I've been hearing that earnings haven't been that great so far.

Thanks!

Q: In assessing my portfolio weightings, I am wondering if most companies in a given sector should largely be expected to act similarly to events or will the across the board reaction differ from sector to sector? I would expect, for example, to see most REITs drop if interest rates were to rise or most oil companies not do well if the price of oil drops.

But I wonder how "homogeneous" the tech sector is. I currently hold full positions of KXS, SHOP, GIB and CSU. To me, these are all rather different kinds of companies. For example, GIB has a lot of recurring sticky government business, SHOP is growing in the retail sector and KXS is a smaller company selling to worldwide industrial companies. In your experience, would all these stocks be likely to drop (at least to varying degrees) in a tech sell off or are investors a bit more discerning than that? The reason for my question is to help me decide if being a bit overweight in tech is as risky as being overweight in utilities might be as I would expect every company to decline by similar amounts if rates rose.

I would like to add Lightspeed to my holdings but not at the risk of increasing my risk in my overall portfolio.

Appreciate your insight.

Paul F.

Q: I have received an inheritance and looking for your top picks in all 11 sectors of the TSX with your % of each sector.
Mostly looking for dividends and a little growth, can handle some risk holding long term and will be sublimating my retirement with the dividends. Just want to be diversified with my equity holdings.

Thanks Greg

Q: Could you please tell me what is the best site to look up regarding when a Canadian listed company will be reporting its next quarterly results. Thanks for all you do, Ian

Q: It is possible that next year we may have a minority's govt. in Ottawa between the liberals and ndp. As there is too much govt debt and the ndp will want to increase social spending and perhaps block any pipeline expansion they will need to increase tax revenue.one way would be to increase the capital tax from 50%.We are in our early 80s and were long term investors ,have large capital gains. Does it make sense for us to sell our equities with a view to repurchase them back using the net after tax proceeds? After all eventually we or our estate will have to pay the tax.

Q: This is a follow up question to my request for your opinion on the management of many companies. Sorry for the prior long list.

It is good to know that you need to like the management of all companies included in your model portfolios. That helps a great deal. When you remove a company from your portfolios, does that mean that you have lost confidence in the management team, among other things?

I have removed those in your portfolios from my list, as well as those with reports where I have found comments on management. The remainder are as follows:

CTC.A LNR PZA
L SAP
CVE IMO TRP VET
BTO ELD FNV LUN NGT OR PSK WPM
EIF WJA
FM TECK.B WFT
SJR.B T
AQN CU EMA FTS

US: CVS GILD UNH CAT NVDA INTC

Could you please comment on their management teams, as to whether they are excellent, good, acceptable, or questionable?

Thank you,

Fed

Q: https://www.investingforme.com/data-room/rate-reset-preferred-shares

In response to Joseph's question on where investors can find some info on preferreds, here's a site I use for the prospectus of some pref securities.One of the banks also publish a monthly report which includes prices and features of each.

Q: Does Burton Malkiel’s blindfolded-monkeys-throwing-darts idea say that the portfolios of a group of perversely motivated investors trying to pick the worst stocks would be indistinguishable from the portfolios of investors trying to pick the best stocks?

I would appreciate your views.

Q: This is a follow-up questions about determining whether a company is considered growth vs income. Can I interpret what you said as being:

If the sales and EPS do not increase much, or stays the same, over many years, and the company offers a reasonable dividend then it is considered income.

On the other hand, if the sales and EPS increase steadily over several years, then it is considered growth, whether or not it offers any dividend.

And if the sales and EPS fluctuate year to year, it may be cyclical, which is a separate category.

If it does not fit into any of the above, then it is a company of that should not be considered investing in.

Q: just a comment to add to genes misery over rbc investing, i am a seasoned investor using rbc investing, been doing this for 25 years and rbc is by far the worst.
what they did with their watchlist is beyond stupidity, it is idiotic, i would love to switch to someone else but i have 15 accounts with them and switching would be even more misery. dave

Q: How will you back test an ETF like VBAL or VGRO which have not been there for long and compare it/them with an ETF that has been there for a long time? For example XIC or VDY....I ask this having your model ETF portfolios in mind. (Both in CMS and ETF Fund update newsletter.)

Q: Hi Peter/team what is blockchain and how can someone invest there.Thanks

Q: Hi 5i team, thanks for the valuable information about quarter earning beating estimates for companies in your balance and growth portfolios. Will appreciate again if you can list similarly for the following companies: TIH, WCN, CJT, PBL, QBR.B, GIB.A, DSG, SMU.UN, RY, WEED, KL, OGI, FSV.

Q: Hi All at 5i! I was reading an article in the post which made reference to Canadian debt. Not just the debt held by individuals, but also , the debt held by corporations. In a down turn, it has been predicted that this could be a large problem for the corporations and the lenders. Are there corporations that we should stay clear of as investors, which are heavily debt laden, to the point of being a major concern? Cheers, Tamara

Q: Hello,

With regard to PNN, you mentioned that a retail investor could build its own. Can you please elaborate on how to do it (example if possible). Would a 5 year maturity long enough ? Thank you

Q: Hi Peter/Ryan
Do you see any Blue chip stocks on sale irrespective of sector for cash account?
Thanks