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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: Can you tell me your top three picks in the beer/spirits sector? Your reasoning would be appreciated as well.
Thank-you.
Read Answer Asked by Alex on March 17, 2020
Q: What is your take on NWC selling some of it's Giant Tiger Stores back to GT. I know they had some operational issues with these stores. Appears to be a good deal and a clean exit for the exception of the 6 stores they are keeping which I presume are profitable. What impacts do you see from this deal.

Thanks
Read Answer Asked by roland on March 17, 2020
Q: Hi 5i,
I am not 100% clear on stock and ETF's allocations for investment plans. Take as many points as needed to answer the questions below. I apologize in advance for the length of the question.

As a Canadian investing through a Canadian site (RBC in this case), split into CDN and US sections (moved CDN funds to USD and paid the exchange), which stocks and ETF's should be allocated to RRSP (CDN or US sections), TFSA, & Non-Registered accounts?

As an example, an RBC RRSP account is split into CAD and USD segments. If I purchase VWO in USD on the US segment instead of VEE on the CDN segment do I retain the 15% withholding tax? If I purchase VWO in CDN funds on the CDN side of the RRSP, what happens to the 15% withholding tax?

Is there a tax difference when filing a CRA 1135 form. e.g if VWO or VEE are 100+k CDN value: VWO on the USD segment or VEE on the CDN segment or VWO on the CDN segment.

If a US stock has a dividend, should this ever be purchased on the CDN side of the RRSP or in a TFSA? .. e.g. CRM with a small dividend or AMGN with a larger dividend

Can you please assign the best allocations (RRSP, TFSA, Non-Registered) to examples a the bottom of the question.
e.g. Non-dividend Growth US stocks (Googl, AMZN): TFSA, RRSP
This tells me that AMZN is best in the TFSA for growth, and in an RRSP purchased in CDN or US funds is the same effect other than currency at the time of purchase.
If a stock or ETF should be in CDN or US sections can you note that as well? e.g. RRSP(CDN or US).
It is a lot to ask so limited examples below will hopefully reduce the effort.

5i recommendations
Non-dividend Growth US stocks (e.g. Googl, AMZN):
US small Dividend Growth (e.g. IWO):
US Foreign ETF (e.g. VWO):
CDN ETF with US stocks and other int'l stocks (e.g. VEE):
CDN High Dividend (e.g. CDN Utilities/Reits/ETF's):
US High Dividend (e.g. US Utilities/Reits/Medical/ETF's)
All World ETF (VT):
All World ETF (XAW):

I very much appreciate your service and time to answer questions.

Jerry
Read Answer Asked by Jerry on March 16, 2020
Q: For cash destined for a non-registered account can you suggest categories of stocks that, given their current valuations following the recent market meltdown over the past couple of weeks, you would expect to have the best total returns over the next three years or so, listed in order of expected total return?
1) 6-8 Canadian blue-chip dividend-growth stocks with at least 5 years of consecutive dividend growth (ideally 10 years) and a current dividend yield of ≥ 4.0%, good balance sheets, reasonable/minimal debt, etc. Looking for “best in class” amongst a few different sectors - ie only need one (“best”) bank, one telco, one pipeline, etc
2) 2-3 Canadian blue-chips who may not meet the above dividend yield and growth specifications but whose current valuations make them an appealing possibility
3) 2-3 more growth-oriented stocks, do not have to be traditional “blue-chip” - with or without dividends who would be expected to have the best total return possibilities over the next three years.
Would you be buying now or waiting until there are maybe a couple or three consecutive days of positive market returns and/or when the current market volatility seems to be settling down (however you would define or identify that) or buying in over a period of time? If so, over what period of time and buying at what interval/ frequency?
Thanks for your insight.
Bruce
Read Answer Asked by Bruce on March 16, 2020
Q: I'm interested in the Canadian banks due to the recent drop and the dividend yield which is very attractive. I have remained in cash for most of this crisis and am anxious to buy. However, I'm very concerned that we are in for further shocks to the economy given the fallout of this virus. How much exposure on the downside do you see to the Canadian banks' balance sheets? I know that if the market goes down, everything will move in tandem but what I'm worried about is that we are in for a high number of failed small and large businesses. Also, I've left my money in US dollars for the last number of years because I think it's a better place to have money and will be buying Canadian banks listed on the USA exchange if that makes any difference. Thank you as always for your comments.
Read Answer Asked by Jason on March 16, 2020
Q: Canadian pipelines have suffered along with most of the market during this correction. My understanding is that they are protected by take or pay contracts with the producers. In other words you either take the capacity you agreed to or pay for it. The obvious concern here is that the producers opt to do neither, not having the money and facing bankruptcy. My first question is whether this is even true to any extent. Secondly, what would the response of the pipelines likely be? Do they ultimately become owners of non-producing oilfields?

Secondly my understanding is that shipping by pipeline is cheaper than shipping by rail. Given this scenario the remaining product should shift over time from the rail lines to the pipelines, keeping the pipelines full. The loser becomes the rail lines. Do you consider this to be true?
Read Answer Asked by Larry on March 16, 2020
Q: For someone looking for income, what dividend stocks, in any sector, would you find most appealing?
Read Answer Asked by Michael on March 16, 2020
Q: Hi,
Can you list 5 stocks with 4% yield having a good balance sheets.
Thank you for your support
Read Answer Asked by Edward on March 16, 2020
Q: Hi 5I,

Looking back to 2008 the utilities sector held relative well to the meltdown of the TSX. This time around ZUT is following the TSX down. One would think people still need hydro to heat/cook.

Can you comment on why this is happening? Is there a fear these companies will become insolvent due to their balance sheets?

Thx,
Chris M.
Read Answer Asked by Christopher on March 16, 2020
Q: After the "blood in the streets" kind of day we have had today, March 12, was I "crazy" to add to my holdings of the aforementioned? Are their dividends as reliable as I perceive them to be? FYI, I am a year away from retirement at age 60 and value dividend income for a portion of my portfolio.
Read Answer Asked by David on March 16, 2020
Q: Hi, if we are in a lower for longer or forever energy pricing environment what might be the impact on the above companies? Also, do you think their dividends could conceivably be in jeopardy? Thanks.
Read Answer Asked by Gary on March 13, 2020
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