Investing

Portfolio Re-balance help

  • Last Updated:
  • Feb 20th, 2018 4:21 pm
Tags:
[OP]
Newbie
Oct 9, 2008
74 posts
26 upvotes
Terrace

Portfolio Re-balance help

Hello RFD, looking for some re-balancing advise on my portfolio that is heavy on Canadian investments. I will add that i'm in my mid 30's and more of a buy an hold investor.
I'm looking to move about 20% of my CP investment to either AAPL/GOOGL/AMZN or something solid. Current prices are high, but what isnt? I'm also considering more emerging markets VAH or something similar
I also just invested the in GOOGl/AAPL since Jan 2018, so my current holding are fairly new.

CANADA
CP 47%
TD CDN Index 11%
BTE 1%
CNR 5%
MFC 2%
66%

USA
TD US Index 8%
GOOGL 6%
AAPl 5%
BAC 3%
GE 1%
VDE(ENERGY) 3%
25%

INTL
TD Intl Index 9%
9%


Appreciate all the help.
5 replies
Deal Expert
Jan 27, 2006
17213 posts
9968 upvotes
Vancouver, BC
I would argue that you may want to move more than 20% of CP to something else as you also have CN and while they are different railroads and serve a slightly different market, they are still both railroads.

How about move more of that money into MFC? OR a Canadian bank? Of if you are looking for US exposure, how about GS? or European banks?

As for AAPL/GOOGL/AMZN, all three of them has had a nice run in the past few months and while arguments can be made that they are 'cheap' so is any stock at the top of their cycle - ie commodity stocks are typically cheapest (ie lowest P/E) at the top of a commodity cycle just because a major correction in that sector. I'm not saying that there's going to a tech correction of the high flyers but it certainly would not be out of the question given how cycles work in other sectors.
[OP]
Newbie
Oct 9, 2008
74 posts
26 upvotes
Terrace
i'm currently a fan of tech stocks as that is the way the world is heading, so don't mind being heavy. You are right that there could be a correction in this sector, but that would be likely involve an overall market correction.
GS - don't really understand the dips, stock was under performing most of middle of last year, and regained momentum towards September.
European banks - not familiar with them at all

AMZN/ BABA - maybe add 5- 10%, leaning more towards baba as they are priced "better"
AAPL - considering 5% more, but already regained most of its 2018 losses, my entry costs would be very high
MSFT - another potential tech stock to consider


craftsman wrote: How about move more of that money into MFC? OR a Canadian bank? Of if you are looking for US exposure, how about GS? or European banks?

As for AAPL/GOOGL/AMZN, all three of them has had a nice run in the past few months and while arguments can be made that they are 'cheap' so is any stock at the top of their cycle - ie commodity stocks are typically cheapest (ie lowest P/E) at the top of a commodity cycle just because a major correction in that sector. I'm not saying that there's going to a tech correction of the high flyers but it certainly would not be out of the question given how cycles work in other sectors.
Deal Addict
Feb 26, 2017
2025 posts
2384 upvotes
I'd keep the tech. I'm late to the game but bought Amzn last year and FB and AAPL in Jan. I think they have great growth prospects for the future.

I second the idea of a CDN bank. My experience has been 8-12 % yearly returns some I started buying them 8 years ago. TD is the one I like the most but BNS looks like the best value currently.

Utilities and Reits offer some great value right now as well in this raising rate environment (fts, ema, cu and aqn have all gone down almost 10% this year).
Deal Expert
Jan 27, 2006
17213 posts
9968 upvotes
Vancouver, BC
kevin123456 wrote: i'm currently a fan of tech stocks as that is the way the world is heading, so don't mind being heavy. You are right that there could be a correction in this sector, but that would be likely involve an overall market correction.
GS - don't really understand the dips, stock was under performing most of middle of last year, and regained momentum towards September.
European banks - not familiar with them at all

AMZN/ BABA - maybe add 5- 10%, leaning more towards baba as they are priced "better"
AAPL - considering 5% more, but already regained most of its 2018 losses, my entry costs would be very high
MSFT - another potential tech stock to consider
GS is an investment bank to the core... and as such, they make money on trades and general market volatility! Since 2017 was a quiet year for the most part, GS's numbers weren't great in the trading area (the other areas blew the lights out according to their most recent quarter with just trading causing issues due to the lack of volatility). 2018 is volatility. GS should be able to make some good money in these markets and that's what people are betting on.

How about moving one step lower on the tech stock front? Companies like CSCO or AMAT which aren't as expensive and don't have the law of large numbers working against them.

Banks are basically banks but operate in different areas of the world. When it comes to Europe, they are coming off a negative interest rate environment so any move in rates over there will be just like what happened in the US with profitability increases for doing nothing special due to increases in the spread between savings and loans. Most European banks have had their balance sheet cleaned up over the past few years but I wouldn't put any money in Italian or Greek banks but German, Spanish, and Swiss banks all look relatively good. Spanish ones might be a good one to keep your eye on as Spain tries to move through the issue with Catalonia which may create a better entry point.

Another area you might want to look at in the long term is India. Fairfax has a hedge fund that an easy way to play the market there.
[OP]
Newbie
Oct 9, 2008
74 posts
26 upvotes
Terrace
appreciate the GS recommendation, but i have BAC and that is enough american bank exposure for now for me.
I also like sticking to few stocks, so don't want to have too many in the same sector. For US technology i'll stick to AAPL/GOOGL and either add to them, or add AMZN
BABA seems to be what i'll likely add to increase my international exposure. If I add BABA then i'm less inclined to add AMZN, then will likely increase my position in GOOGL and potentially FB.

once i move funds out of CP i'll be about 50% Canadian exposure, 35% US exposure, and 15% International exposure.
I still think i'm too heavy in Canadian exposure, but may further reduce my holdings in a few months.




craftsman wrote: GS is an investment bank to the core... and as such, they make money on trades and general market volatility! Since 2017 was a quiet year for the most part, GS's numbers weren't great in the trading area (the other areas blew the lights out according to their most recent quarter with just trading causing issues due to the lack of volatility). 2018 is volatility. GS should be able to make some good money in these markets and that's what people are betting on.

How about moving one step lower on the tech stock front? Companies like CSCO or AMAT which aren't as expensive and don't have the law of large numbers working against them.

Banks are basically banks but operate in different areas of the world. When it comes to Europe, they are coming off a negative interest rate environment so any move in rates over there will be just like what happened in the US with profitability increases for doing nothing special due to increases in the spread between savings and loans. Most European banks have had their balance sheet cleaned up over the past few years but I wouldn't put any money in Italian or Greek banks but German, Spanish, and Swiss banks all look relatively good. Spanish ones might be a good one to keep your eye on as Spain tries to move through the issue with Catalonia which may create a better entry point.

Another area you might want to look at in the long term is India. Fairfax has a hedge fund that an easy way to play the market there.

Top