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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: You had previously given the following criteria to judge momentum stocks: "For momentum we like a rising stock price with increasing volume, positive earnings surprises, accelerating earnings, analysts' upgrades and target prices. "

Would I be correct in assuming that in the current markets, we need to think more like value investors, however, than momentum investors? If my observation is correct how does one then analyze value stocks?

Appreciate your insight.

Paul F.
Read Answer Asked by Paul on April 02, 2020
Q: I understand that a covered call ETF will produce lower highs and higher lows compared to a non-covered call ETF. However, what would cause the ETF's to have an inverse relation on a trading day? For example, if we take ZEB and ZWB, I noticed on some trading days in the past (even before the current volatility), one ETF would be up a few % points, while the other ETF would be down a few % points.
Read Answer Asked by Craig on April 01, 2020
Q: Good morning, stay safe and keep up the good work.
My question is on hedged vs unhedged funds.
My son is 27 and his time horizon for any investment is long term.
Now that our Canadian dollar trades at an all time low against the USD, (last time we hit similar lows was in 2016/2017) and the chances that our CAD trades lower are relatively slim, wouldn't it be preferable to invest in a hedged fund version of the Nasdaq-100 indexed ETF. The reason being is that the return of an investment in a USD equity (when converted back to CAD) decreases in a strengthening CAD environment. On the flip side, in a weakening CAD environment, the same USD investment's return, when converted back to CAD, would be increased.
To recap: My assumption (might not be a valid one) is that our CAD can only increase in value against the USD. In this strengthening environment, isn't it better to purchase a hedged ETF ?
Read Answer Asked by Elaine on April 01, 2020
Q: Hi Peter and Team,
Hope you're all staying safe!
I believe there is a secular push for clean energy around the globe and I also want to expand the global exposure relative to Canadian markets in the portfolio so I'm thinking of adding some ETFs like ICLN to help me in both these regards. How do you feel about this for new purchases for planned long term holding.
Read Answer Asked by Marc on April 01, 2020
Q: Hello 5i,
Interesting times. Thank you for the backup.

I am trying to help my sister rebalance her portfolio and to get it retirement ready. She does not want to watch the portfolio but is open to rebalancing a couple of times a year. She is in the 40:60 to 50:50 bond:equity range for comfort (although this market is a great test about that assertion). She will live 3 - 4 months in the us during retirement.

I’ve been playing with the above mentioned etfs, keeping in mind that USD are already held (25% of portfolio), to find the proper mix of etfs to get to a 40:60 mix of bond to equity, with an equity exposure 25:50:25 Canada, US, International.

Please feel free to suggest other etfs as necessary if the above are not appropriate. Can you suggest an appropriate etf composition/ collection to satisfy the above criteria?

Tia
Read Answer Asked by Kat on April 01, 2020
Q: Looking to simplify my life going with either XBAL or VBAL. They seem very comparable with slight differences regarding how much Canadian content.I also have the following ETF's .. QQQ,XQQ,SPY ,IWO ,XHC and ZAG. Could one still retain these or am I doubling down when really XBAL or VBAL will cover most of the stocks in these ETF's. Are there any that could be sold eg ZAG I don't mind having a bit extra in tech though.Thanks for your sound advice in these crazy times.
Read Answer Asked by Paul on April 01, 2020
Q: Greetings Team 5i,

I was thinking of buying for RRSP but concerned about losing out to withholding tax.
XDG is a Canadian wrapper with around 53% of USA holdings plus rest of the world.

Would you have an idea of the withholding tax status? Held in an RRSP, would the USA holding's dividends NOT incur withholding but the remainder would?

In this case, I am giving the issue of withholding tax too much thought and should just buy it for its merits?

Thank you in advance!
Read Answer Asked by Arzoo on March 31, 2020
Q: Good morning,
Given that CEW includes Banks and Lifecos' and assuming that low interest rates will be with us for some time, I would appreciate your thoughts about selling CEW for tax loss harvesting purposes and purchasing either an exclusively bank ETF such as ZEB or purchasing two banks with the proceeds of the CEW sale. Also, could you also recommend two banks that you would recommend purchasing at some point with the proceeds of the CEW sale. Thank you.
Francesco
Read Answer Asked by Francesco on March 31, 2020
Q: Just wondering your general opinion on these 4 stocks that were rated 5 stars by Morningstar. Do you think any of them are interesting and how would you rate them. Thank you
Read Answer Asked by Meghan on March 31, 2020
Q: We have an unregistered account with 74% cash and want to buy some index funds (my wife read Millionaire Teacher and is convinced index funds eliminate some human error with stock selection). We are considering XIU, ZSP and perhaps ZDB; we do have a significant bond holding with Phillips, Hager & North and not sure if bonds should be part of this unregister account? Long term investments 7+ years. Thanks you very much for your comments on index funds.
Read Answer Asked by Grant on March 31, 2020
Q: Most of my son's assets (all tfsa) are in the etfs zwb, vgg and vee. Would you suggest substituting any other etfs at this point with an eye to catching the rebound? Thank you.
Read Answer Asked by William on March 31, 2020
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