So you want to delve into the world of DIY investing but you don’t really know where to start. You want expert advice, so you watch BNN, and you listen to advisors top picks. You watch Jim Cramer and click “BUY” after he tells you to “BUY” but your investment turns sour fast. You want to be able to research an investment and get the fundamentals quickly without looking to all these places to find the information that you’re looking for. There are limited investment research tools out there in Canada. 5i Research is one of them. Here’s my 5i Research review.
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Table of Contents
What is 5i Research?
5i Research was founded by Peter Hodson and is based in Waterloo/ Kitchener, Ontario.
It is a website that allows you to research stocks (in-depth), access 5i Research model portfolios, participate in like-minded Canadian investor forums, and use Portfolio Tracking tools.
Their slogan for 5i is “DIY Investing doesn’t mean Do It Alone”
5i Research has a team of Chartered Financial Analysts (CFA) that includes:
- Peter Hodson (Founder and Head of Research)
- Ryan Modesto
- Barkha Rani
- Chris White
- Michael Huyngh (CFA candidate)
You may have seen Peter Hodson is on BNN Market Call, here’s one of his 5i Research Top Picks as of writing in January 2023. He worked for over 25 years on Bay Street and was the Chairman of Sprott Asset Management, Canada’s largest and most successful hedge fund company.
They have also answered over 100,000 5i Member questions on the member forums and in the individual stock ticker investment page.
5i Research endeavours to provide independent investment research for Canadian retail investors.
5i Research Membership
This 5i Research review will go over the cost of membership.
5i Research is not free, it has an annual membership free (that is renewed automatically unless you check off that you don’t want it renewed automatically).
The Basic 5i Research Membership includes:
- Access to the Question & Answer section where investors can have their stock and financial markets questions answered by 5i Research staff
- Access to 60+ easy to understand research reports on Canadian companies written by the aforementioned CFAs. These are updated annually. These reports are written on companies after a screening process to find interesting stocks that 5i Research thinks will perform well.
- Access to 5i Research model portfolios: Balanced Equity, Income, and Growth portfolios (so you can invest like 5i Research and see the annual returns of these portfolios since inception)
- A bi-weekly market newsletter sent to your email
- Stock watchlist
For an addition cost, you can also add the 5i Research Portfolio Analytics which is a pretty neat tool to look at your portfolio objectively and see where you need to improve.
The 5i Research with Portfolio Analytics includes:
- After manually inputting your portfolio ticker number, ACB, and number of shares (those with 100+ individual investments better proceed with caution, haha, that would be a lot of data entry) you can screen your portfolio for opportunities to improve
- Portfolio allocation suggestions and an ability to set your own allocations
- Ability to view your portfolio by asset class, geography, and sector (no other Canadian fintech investment tool that I have come across seems to do this to my knowledge)
- Portfolio management alerts to keep you organized
5i Research Questions
Probably the most “bang for your buck” for most Canadian investors using a financial tool like this is access to the 5i Research questions forums.
Being able “pick the brain” of 5i CFAs and ask Canadian investment related questions and get an easy-to-understand answer almost right away is priceless!
No question is a dumb question. It’s like an AMA “Ask Me Anything”.
For example, you could ask about what CDRs mean just like this member did:
Q: Some large companies such Amazon trade in Canada as depository receipts. Can you elaborate on this product advantages or disadvantages and would you recommend its use.
Best Regards, H.
5I RESEARCH ANSWER:
Many large US companies trade on the NEO Exchange as CDRs (Canadian Depositary Receipts). The NEO is simply an alternative stock exchange. CDRs are similar to American Depository Receipts and that are listed on American exchanges. CDRs allow Canadians access to some of the largest US companies listed on NYSE and NASDAQ through the NEO Canadian exchange in Canadian dollars. There is a currency-hedge built into the shares. Another benefit of these is that the price per share is much lower, giving a wider array of investors access to these global companies (a lower price point as they represent fractions of shares). There are no management fees associated with CDRs. We are very comfortable with them for investors who want lower-priced exposure to US securities with a Canadian hedge. Withholding taxes still apply. We think they can go in any account, but growth investments are usually better in a TFSA. They are not really ‘different’ than regular shares other than in price, and currency hedging, and of course where they trade. The underlying shares are held by CIBC which creates the CDRs.
Here’s another question that was answered by 5i:
5i Research Top Picks
Although there isn’t a 5i Research Top Picks, they have 5i Research model portfolios that began since 2013.
- Balanced Equity Portfolio
- Income Portfolio
- Growth portfolio
You’ll have access to the portfolio holdings and the actual rate of return of their model portfolio, for example, the target Growth model portfolio is a 12% annualized return.
So if you want to follow along and leave the ideas up to the CFA experts, you can!
Peter Hodson often does Peter Hodson’s top picks on BNN so you could follow his recommendations there too.
5i Research Cost
Some people might balk at the annual membership fee.
But if you think about it, we do tons of research before buying a $799 TV… but for some people, they think nothing of putting in $10,000 towards a company they didn’t do much research in.
That was me 15+ years ago but I have painfully learned my mistakes (and lost multiples of $10,000 *poof* into risky investments like flow through shares, penny stocks, or buying whatever Jim Cramer recommended).
Therefore, the few hundred dollars is not really that much if you think about it in the grand scheme of things (like losing $10,000 to whatever Jim Cramer recommended).
How much does 5i Research Membership cost?
Here are the 5i Research Membership Options:
|Membership Options||Annual Membership Fee|
|5i Research Basic||$209.95|
|5i Research with Portfolio Analytics||$390.00|
There are promotional discount codes and links you can use to reduce that such as the partnership with Genymoney.ca readers (more on this later).
5i Research Review
Here are some pros and cons I have identified in my 5i Research review.
5i Research Pros
If you want ideas, 5i will give you ideas. Personally I am not much of a stock picker and I like to stick with my core investments and ETFs. If you are looking for ideas on companies to add to your portfolio, 5i is a good resource.
Objective recommendations and easy to understand. Unlike an investment advisor or buys and sells equities like crazy and drives up your commissions cost through the roof, 5i won’t do that. They are objective recommendations and you are in control of your own portfolio. The reports are easy to understand.
Layout is very clean, easy on the eyes. When you look at a company’s information on 5i Research, it’s very easy to read. You could find a lot of the information on something like Yahoo Finance but it’s nicely laid out on the 5i platform.
Here’s an example of what it looks like when you look up BMO:
5i Research Cons
It doesn’t have a lot of detail if you are an advanced investor. The reports are easy to download via PDF, they are detailed, they give a summary of the company, expectations, and they are a few pages long.
If you are an advanced investor and are looking for something more in-depth like you want 30 year history of financials on a company, you would be better paying for a Premium membership to something like Guru Focus (which is $499 USD annually by the way).
Here’s an example of a 5i Research report from Leon’s furniture:
Portfolio Analytics are suggestions. What was cool was that it broke down my entire portfolio into different sectors. I would take the recommendations with a grain of salt, more of a starting point, but the tool does allow you to set your own custom allocations to whatever you see fit. However, it did say that my concentration on financials was too high (I am pretty confident it will say that for most other Canadian investors who love Canadian banks and collect them all) and that I should decrease my exposure to Canadian financials.
Some people can do very well in a concentrated “unbalanced” portfolio (for example, Warren Buffett and his concentration on $APPL in Berkshire Hathaway) and if you’re looking for balance with multiple equities to try and match complicated sector asset allocation, in my humble opinion you should just stick to an ETF.
To be honest I don’t think the Portfolio Analytics is worth the extra $150+ annually but more as a one time analysis (unless you drift from your core holdings by a lot).
Something like Wealthica can aggregate your portfolio automatically without having to input each assets ACB and number of shares, and it’s free to use. However, Wealthica doesn’t break it down by sector and doesn’t give you recommendations.
Stockchase is another similar investment tool that summarizes the BNN market call information on investments.
In summary, my 5i Research review is positive if you are planning on doing research. 5i Research is worth the money if you’re planning on stock picking a big growth investment to put in your TFSA and doing research on companies or if you’re an intermediate investor.
If you’re someone who will plunk down $5000 on one investment from an idea on Wall Street Bets or you take ideas from your work Christmas party or at the office water cooler, the small annual investment to get objective recommendations (and more importantly, be able to ask financial and investment related questions to the 5i Research team) is worth the money.
If you plan on investing in a one-ticket ETF you won’t need this membership at all obviously.
The Portfolio Analysis gives you some insight on how your portfolio is doing (it gave me a great reminder that I am too concentrated in Canadian equities, lol) but is probably best for a certain subset of investor opposed to a broad audience.
Passiv does something similar but tells you how many shares to rebalance, 5i Research just tells you how many percentage points of your allocation you should decrease or increase by.
5i Research Free Trial
5i Research is so confident that you will like what you see, that they offer a 14 day Free Trial of their membership.
Click here for your 14 day free trial of 5i Research.
This free membership includes one FREE question you can ask to the experts!
They also give you a discounted subscription to the Canadian Money Saver.
You can follow 5i Rsearch on Twitter here.
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What is your 5i Research review?
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.