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Constellation Software Inc. (CSU)
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Shopify Inc. Class A Subordinate Voting Shares (SHOP)
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Lumine Group Inc. (LMN)
Q: Hi, Large Cap Tech stocks in US started the new year with a sharp pull back.
In Canada, Shopify was the one which followed the trend with 6-7% drop. Constellation Software was largely unchanged and Lumine is consolidating from recent sharp gains. We hold all above stocks in our Non-Regd as well as TFSA accounts. There is about $80k TFSA Contribution room available, due to withdrawls made last year. We are considering In-Kind contributions to add to our TFSA holdings when MV of these stocks are lower, in order to limit crystallization of capital gains, as all of these names have large gains embedded, in our taxable account. Is it a reasonable approach ?
If technology sector witnesses some more decline (after very strong returns during 2023), what are the next Technical support levels for these three stocks ?
Thank You
In Canada, Shopify was the one which followed the trend with 6-7% drop. Constellation Software was largely unchanged and Lumine is consolidating from recent sharp gains. We hold all above stocks in our Non-Regd as well as TFSA accounts. There is about $80k TFSA Contribution room available, due to withdrawls made last year. We are considering In-Kind contributions to add to our TFSA holdings when MV of these stocks are lower, in order to limit crystallization of capital gains, as all of these names have large gains embedded, in our taxable account. Is it a reasonable approach ?
If technology sector witnesses some more decline (after very strong returns during 2023), what are the next Technical support levels for these three stocks ?
Thank You
5i Research Answer:
We think we are on the same page, but just to clarify, transferring a stock with a gain into a TFSA will trigger a taxable event.
If an investor has a long holding period, and wishes to trigger some gains early, in the hopes that with a long runway, the investment will grow tax free thereafter, we think this approach can make sense but really depends on tax situations. We would just ensure one plans on holding the securities still for some time to ensure there is plenty of time for the tax drag to be 'recouped'.
We are not big technicals people but here might be some support levels:
SHOP = $96
LMN is a bit tougher given the run, but it might be $25 (this wouldn't be our base case).
CSU = $3,154