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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I am 75% in equity with less than 10% in Canada, and mostly US with tech emphasis, plus Global and EM. The rest of the 25% is invested with a well known active manager (0.6% MER) of corporate bonds who invested in short-term corp bonds of no more than 2 years duration plus floating rate bonds. No Government or long bonds. With rising interest rate albeit not rapidly over time, bonds are not really a place to be in. Corporate bonds can lose capital as well if there is a significant downturn. What is your view on holding cash in MMF in lieu of corp bonds as a fixed income allocation of a portfolio in the foreseeable future as capital preservation? USD MMF instead of CAD cash?
Read Answer Asked by Ford on July 10, 2018
Q: Due to health problems my Doctor advised that I cease to manage my investments through a bank self managed brokerage account. I will transfer my assets to a advisor associated with Hollis Wealth. Because HW is not a bank I had to sell my holdings and then transfer the cash. The investment will be made this week. Should I invest all the funds or spread it out over a period of time? It wii be a very long time investment.
Thanks for your advise over the past years.
Read Answer Asked by Warren on July 10, 2018
Q: Hello Peter et al.

With all of the latest rhetoric about trade wars between the US and a lot of countries I have lightened my stock portfolio from about 97% to about 75% with the remainder in cash. I have in the last few years worked hard to get the increase in my RRSPs value. I am looking to put the cash into something that provides the following:
1. Quick access if necessary to re-invest again when I feel the time is right.
2. No loss of the capital with what the cash is put into.
3. Maximum rate of return for the above two criteria being met. I know it will not be high.

Is there a Money Market ETF or something similar that meets my three criteria. Because the cash is in my RRSP accounts I can’t take it out without paying tax on it which I do not want to do.


Thanks,

Brendan
Read Answer Asked by Brendan on July 09, 2018
Q: I have followed 5i research since 2013 and used the model portfolios to tremendous advantage resulting in more that doubling the capital in my portfolio. I have been all Canadian from the beginning having fear of the US stocks. (and still do) However I am wondering if its time to dip into the US and International markets. Do you think it is appropriate at this time and how would you approach this. I could just transfer some stocks to a US account. I am a retired growth/income investor. By the way I followed many talking heads on BNN before 2013 and none impressed me more than Peter. That is why I took the plunge into the 5i Research philosophy. Many thanks Peter.
Read Answer Asked by Martin on July 06, 2018
Q: I've asked this before. Given the current situation, particularly concerning Canada's negotiations with the US on trade, what is your opinion regarding the Canadian dollar? I've invested fairly heavily over the past year in US equities and bond funds with the assumption that the Canadian dollar is headed down. I understand that calls on forex are difficult, particularly due to political considerations, but I am interested in your perspective.
Read Answer Asked by Larry on June 29, 2018
Q: Dear 5i
For two seniors retiring soon with an anticipated retirement income of $75-$80k , what would be the ideal sources/ types of income coming from her RRSP , his RRSP and her spousal RRSP ?
1- 100% from capital gains and or return on capital or
2-100% from dividend income or
3-Somewhere in between ,
with the view of minimizing tax consequences.
Obviously there will to some interest income which I'm aware is least desireable .
I`m figuring that the end result for sources of income is reflective of the balance of fixed income vs equity in the portfolio ie risk profile each person or couple is willing to accept or live with . In essence i think i`ve answered my own question but would welcome your input anyways .
Also any income or capital gains achieved from a TFSA would be the most favourable due to no tax consequences correct ?
Thanks once again .
Bill C.




Read Answer Asked by Bill on June 25, 2018
Q: Hi

I have noticed that most publicly traded companies do not publish a separate fourth quarter report . Why is that ?

I would like to know if by subtracting every line of the annual report from the first, second and third quarter statement of the income, balance sheet and cash flow, an investor can derive the fourth quarter statements?

Could you list the lines which are not suited to this exercise?
Read Answer Asked by Gilles on June 25, 2018
Q: More of a portfolio construction question, I would really appreciate your opinion on the following. Whether in The Post or The Globe, more and more, I’m reading in the ‘personal financial profiles’ that individual investors should be allocating, in some cases up to 30% of their portfolios, to alternative investments. These typically include private company debt, individual mortgages, and ever-increasingly now, factoring, the assuming of small business’ accounts receivables.

I’m a conservative investor, close to retirement, no pension, planning to live off the income of my portfolio. Without over-reaching for yield, I invest in mostly blue chip big-cap, reasonably diversified, with an allocation to some of your growthier names. But when I look at what is increasingly being suggested by planners, always under the auspices that alternatives are safer because they cannot be marked to the market in times of corrections, I cannot comprehend it. Companies that cannot qualify for the better rates that banks offer, people who don’t qualify for bank mortgages, and companies who have to sell their receivables because they cannot wait to collect them on their own, sound very high risk to me, worlds higher than investing in a mix of banks, lifecos, utilities, pipelines, industrials, tech, health, reits, preferreds, fixed income, and the like. While the market values of what I typically invest in can tank during correction periods, in my mind, they certainly don’t carry the very high risk of permanent capital loss that these so-called alternatives do. Particularly so since most of the ‘alternatives’ I assume are small companies.

Are these being offered because, a) you require a broker to get them for you, hence you must use one and pay fees, and your accounts likely become stickier because of it, and b) so a broker, when in a correction period, can point to these and say they’re safer because they’re not reacting to the negativity — but only because in truth, there is no market to mark them against. Not until you try to sell, that is.

Long question, but am I missing the bigger picture, and these ‘alternatives’ are something that should be considered?
Read Answer Asked by Warren on June 25, 2018
Q: In Joel Greenblatts book "You can be a stock market genius" he mentions that spin-offs historically have been great investments. Obviously not all of them but a high number of them. Specifically they were most successful when key executives from the original company would be moving to the spin off company and leading it, and most specifically when those key executives had large incentives (options, shares, etc) if the spin off company was successful. Also there was a large amount of insider buying from these execs, specifically the CEO, CFO, etc. One example was one of John Malone's spin offs which to this day is seen as one of the most profitable in history. Anyway, what are your thoughts on this theory. Does the theory rain true in some of the spin offs we have seen like (ECN/EFN), (Bombardier/DOO). Thanks!
Read Answer Asked by Adam on June 21, 2018
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