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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: Educate me please:

I’m new to investing on my own. Previously used an investor who chose mutual funds for me – mistake!!! I know now that no-one is going to care about my money as much as me – so I’ve taken all my investments out of the hands of my investor and am slowly transferring my mutual funds into stocks. I’ve only been at this two months and already my stocks are doing better than the mutual funds ever did! But, I need some discipline, a plan and guidance.
My questions:
1. How many companies do you recommend someone should own in a portfolio. With a portfolio of say $100,000.
2. Should each company holding be of equal value and if yes, should I have equal number of shares in each company or equal amount of money in each company? Example: Wi-Lan at $6.00 a share and Boyd Group Income Fund at $12.00 a share. And I have $20,000 to invest in these 2 stocks. Should I put equal amount of money ($10,000) in each stock (about 1500 shares of Wi-Lan and 800 shares of Boyd Group Income Fund)? Or equal amount of shares (1000 shares) of each company?
3. I’ve read elsewhere that when investing I should only put in ½ of what I intend to invest in that company, then the other ½ if the stock decreases by 5% or increases by 5%. What do you think about that strategy? I’ve had this happen to me, I invest one day and the stock goes down the next day 5%, and I’ve had it go the other way increases by 5% the next day. If you agree with this strategy, how far should I let the stock go down or go up before re-investing the other ½? And how long should I wait, say if it goes down 5% the next day should I re-invest the other 1/2 next day, or wait a week or a month?

Thank-you for all your help, I’m learning so much from everyone’s questions and your answers. I wish I could attend your seminar next week, maybe sometime in the future you could have a Webinar where we could enroll in your seminar and be able to listen to it live and ask questions over the web instead of attending in person.
Read Answer Asked by Deborah on April 29, 2012
Q: Hi Peter,
I bought Canaco Resourses last year when you had it part of your Sprott Fund. I've kept it during the decline thinking its oversold for no specific reason have I made a mistake in holding or chances are it will bouce back in the long term.

Thanks.
Read Answer Asked by Costa on April 28, 2012
Q: Hello,
I am holding two etf bond funds, CBO and CHB in my TFSA. One is corporate bonds and one is high yeild corporate bonds. I am worried about a market crash because of Europe and am wondering how these funds are likely to make out if this happens. Will they collapse as much as stocks do in a market crash?
Read Answer Asked by Brian on April 28, 2012
Q: Hi, I had recently purchased ECA, TLM, and ERF but put stop losses 10% below and all were sold recently. So a couple of questions, do you see good potential in any of them going forward, and can you give some advise on using stop losses at all, and if you use them a good strategy of how? Thanks!
Read Answer Asked by Kel on April 27, 2012
Q: Do you have any thoughts on SNC or AGF.B? Both are down significantly, and I wonder if this might be a good entry point?
Read Answer Asked by Ron on April 27, 2012
Q: Zcl Composites (zcl on the tsx) took a beating during the financial crisis. Despite this, the company made an acquistion during that time to complete their suite of containment systems (chemical corrosives, Dualam) that was on the expensive side; but regrouped (with a new CEO and CFO) but has just reinstated their dividend.

What is your outlook for this company. Does their business model (long-life fiberglass containment systems) have an economic moat (sustainable competitive advantage?).

Thanks
Read Answer Asked by Jim on April 27, 2012
Q: Over the previous and current quarterly reporting periods I have noticed a curious trend. US companies seem to always surprise on the upside versus the consensus estimate which of course gives an instant boost to the share price. The trend is so obvious that it has me asking myself how could so many analysts all be so wrong about so many companies? It appears to be the opposite for Canadian companies that are reporting, in that as of late they always seem to fall short of expectations. It almost seems like there is an organized conspiracy among US stock analysts to under forecast making it easy to beat expectations thus moving the stock (and overall market) higher. Have you noticed this and do you have an opinion or comment in this regard? I really like your service and the new question forum and if anybody can be honest if this goes on within the industry I figure it would be you guys.
Thanks,
Steven
Read Answer Asked by Steven on April 27, 2012
Q: I am looking at investing in Parallel Energy Trust (PLT.UN). The current yield is 13%. How sustainable is the dividend at that level.
Read Answer Asked by Chuck on April 27, 2012
Q: Glentel - the stock has been a bit wonky this year. Are there any signs that revenue growth is plateauing? What do you think is going on? Is it still buyable? Thanks Peter - great service!
Read Answer Asked by Derek on April 27, 2012
Q: Hi Guys, any thoughts positive or negative on TLM - Talisman and Trinidad Energy (TDG).

Thank-you for any information you can provide.
Read Answer Asked by Steve on April 26, 2012
Q: Hi, No response necessary..

Your 'question' feature is VERY educational;
gives a reason to come to your site more frequently
than otherwise; and as a value-added proposition,
virtually guarantees your success...

Keep up the good work, Peter et al!

Jim
Read Answer Asked by Jim on April 26, 2012
Q: Is Enervest Diversified Income Fund (eit.un) a reasonable low-to-moderate risk income alternative for a tax-sheltered account?

It has a high-yield (about 9% right now); however, the income is produced variously by the use of leverage; a share price that generally trades at a large discount (8-10%) to NAV; capital gains selling and the non-cash monthly drip program.

Thanks.
Read Answer Asked by Jim on April 26, 2012