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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: Topic: interest rates and income stocks, particularly utilities in a "stagflation" scenario.

I understand your message regarding higher interest rates reducing the appeal of income stocks in a growing economy.

But what about stagflation? If interest rates spike, but the economy stagnates (some us remember the 70's) .... would stocks like the utilities still likely "stagnate" or drop as well?

Would anything do well in a stagflation scenario?

Thanks for any information or guidance you can provide.
Read Answer Asked by Donald on January 16, 2017
Q: Hi Fellow Investors!
For those that haven't read the recent 5i blog on averaging down yet I would like to recommend reading it. It is an important topic and well written.
I would just add that averaging down beyond a normal portfolio weighting can put a big dent in one's longterm returns if things go wrong. In my experience you need a very high degree of conviction to average down and by definition such opportunities will only present themselves very rarely. Most investors cpuld do well to avoid the practice entirely, IMHO.
Cheers
John
Read Answer Asked by john on January 16, 2017
Q: I recently purchased 50 shares at $650, with a multi-year horizon, following a thorough article about FFH being a top-ranked stock when it comes to long-term value AND growth. It has recently been on a steady decline, down by about 5%. Where could I find a relevant explanation for why this is happening and what is your outlook for FFH moving forward ?
Read Answer Asked by Paul on January 13, 2017
Q: I have been considering a purchase of AD, and am not sure if today's drop makes it more attractive or less so - are you aware of any news/actions that would result in the 4%+ price decrease? I am looking at AD more for income than growth, but obviously capital preservation is important. Would you buy AD today, why (or why not) and could you comment on the dividend sustainability.
Thank-you
Read Answer Asked by grant on January 13, 2017
Q: Hi, I am curious to understand market reaction to ALA's possible merger talks with WGL Gas utility. Some of your comments suggested that ALA shareholders will welcome the news and price could go up resulting in increase of our portfolio holdings in ALA. Market seems to think otherwise, as reflected in 5% drop in ALA price in the morning trading. WGL price , on the other hand shot up 6%, yesterday and even higher today. I understand that WGL is a gas utility, which could result in a lower price multiple for ALA, if there is a merger.Financing concerns, issue of new equity could be another concern, you think? How is it compensated with the highly accretive nature of the transaction ?

I would greatly appreciate your insight.
ALA and IPL are my midstream holdings and added ALA this morning on weakness, for stable income and some growth in future.
Read Answer Asked by rajeev on January 13, 2017
Q: It seems to me Open Text is one of your top technology stock pick now, and I like it very much too. The only problem for me is that the company seems like to be paying too much to stock price and playing trick with the stock price. It has a split last year, and now it is splitting again. This is in stark contrast with companies like Google, Priceline, Amazon, not to mention Birkshire, etc. Is this a warning sign? I mean two splits in less than a year.

Thanks

Shaun
Read Answer Asked by Dong Sheng on January 13, 2017
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