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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: I had held alaris for quite a while - great dividend payer, but very bumpy ride on the stock price. I recently sold it all to use the loss to cover another gain, and had planned on buying it back after 30 days. It has continued to drop, however, and now as I near the 30 days I am having second thoughts. Would you consider buying it back now that it is so low, wait for the next quarterly report before buying, or just move on? I would be holding it mainly for income.
Thank-you
Read Answer Asked by grant on October 17, 2016
Q: H&R real estate investment trust calls itself an "open-ended" trust compared to others that call themselves a "close-ended" trust.
Is the internal structure of H&R more like a mutual fund? Should it be a concern?
Which of these three do you prefer for a long-term hold, as the only REIT in a portfolio. Thanks for your help.
Read Answer Asked by Robert on October 17, 2016
Q: What do you make of recent news about Transcanada offering lower rates to to companies wanting to transport natural gas in its pipelines? Do you know if this is for existing customers or new customers only? What does this mean for other pipeline companies? Is this an indication of a loss of pricing power? And lastly, what could it mean for the prospects for future dividend increases?

Thanks, and keep up the good work,
Read Answer Asked by Hans on October 17, 2016
Q: Hello 5i
Would you please offer your opinion of a few individual holdings and other investment vehicles worthy of long-time hold and more importantly dividend reinvestment. I see your a selction of ETF you have been noting are VGG(for USA) and CDZ(for Cad). Is this the top idea or are there other ideas (individually or combination of holdings)?
The goal is to take advantage of the market ride and still feel comfortable with the investments and know more of a good investment is being purchased regularly.

Alternatively, would one just let cash build up and buy shares and units on a quarterly basis instead of utilizing a DRIP?

By example, just bought CAR.UN today. Working to determine whether it makes sense to join the drip; especially with the 5% discount of the Plan.

Thanks for your thoughts
Dave
Read Answer Asked by Dave on October 17, 2016
Q: In one answer you advised that their dividend payout ratio was 70%. S&P Capital report says IPL annual payout ratio was way above 100% throughout past years.. I think you said someplace that you were concerned as they maybe borrowing money to pay dividends higher than than their net earnings..
Could clarify pls
Art
Read Answer Asked by Arthur on October 17, 2016
Q: Our advisor has recommended that we sell some of our equities and purchase more fixed income funds. His recommendations are Manulife Strategic Income F (CAD); TD Retirement Balanced Portfolio F Series; Fiera Defensive Capital Global Equtiy Fund and Lysander-Canso Corporate Value Bond Fund. We are already invested in Pimco Monthly Income Fund (PMO 205), DFA Five-Year Global Equity and CBO. We are leaning in favour of investments we already own as well as XSB, XBB and CLF. We are looking for Canadian, US and International diversification. What would you recommend?
Read Answer Asked by Bradley on October 14, 2016
Q: Hello 5i team,

Which ETF is best suited for a long term hold (30 yrs) in a TFSA that will be DRIPPED and contributed to annually. I like the equal weight positions of ZRE but with a higher MER of .61% over the long term it seems the fee's could really start corroding my capital. VRE is the cheapest but also has the smallest yield and is market cap weighted. Is it possible BMO could lower these fee's in the future to stay competitive? I would eventually like to draw income from the holding.

Always appreciate the you insights
Read Answer Asked by Keith on October 13, 2016
Q: Hi 5i Team:
I’m sold on the need to maintain sector diversification and use your suggested weightings for an income portfolio as my guide. It is how to classify pipelines that always gives me difficulty. I hold Algonquin, Fortis and Innergex to the tune of 10% classified as Utilities. I hold Canadian Natural Resources and Parkland Fuels which make up 7.0% as Energy. Now the problem, I also own Pembina and TransCanada to a total of another 6%. If I go against the TSX and say they are Utilities then I am pretty much in line with where I want to be. If I say they are Energy, suddenly I am overweight Energy and underweight Utilities. My question is do you have any data that would suggest which sector the pipelines are actually more strongly correlated to historically? My feeling is that they have probably moved down with Energy when the oil and gas sector gets beaten up, but also move down with Utilities when interest rates go up so not sure it really matters that much unless one has a crystal ball? But I try not to invest by feelings, would love to know if there is any hard data to support a decision? Alternatively, if you just look at the above and say “too much energy exposure for proper diversification” that’s good enough for me. Appreciate your guidance as always, thanks!
Read Answer Asked by Stephen R. on October 12, 2016
Q: I have about 9% in utilities in an otherwise balanced portfolio. All these companies have dropped from 5 to 10% in value over the last while. Can you explain this. Should I lighten up on utilities, and if so, which one(s) should I sell? Thanks.
Read Answer Asked by David on October 11, 2016
Q: Hello 5i,

Please provide your opinion on the BMO "Blue Chip GIC"
It offers 100% capital protection + 1% rate of return (total over 5 years) and a 100% participation in the S&P TSX Low Volitility Index.
I have seen many equity linked GIC's before but never with a 100% participation.
Fine print indicates that the maximum allowed by law is an average of 60% per year. The negatives I can see with this;
Possible opportunity loss of only a total guarantee of 1% over 5 years.
Money is locked in for 5 years.
Returns will be considered as interest not capital gains, so it would only make sense in a RRSP and or TFSA.
Is there anything else I am missing here?
Thanks,

RD
Read Answer Asked by Randy on October 11, 2016
Q: Hello,

The following 5 companies are on my buy list to complete my portfolio:

PBH
TOY
NFI
BCE
CAR.UN

I have room for two in my TFSA, two in my non-registered and one in my RRSP. How should I divide the above 5 stocks into these accounts?

My plan is to buy on pullbacks. But I'm thinking about buying CAR.UN now because it has already pulled back on the mortgage news. Does this make sense?
Read Answer Asked by Carla on October 11, 2016
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