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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: Hi Peter & 5i,
Thank you for all your professional advice with your years of experience and calmness during this market turmoil.
My question is about bonds.
I have a portion of my fixed income in CBO.
Currently a retail investor can pick up some fixed income bond/debenture from the above mentioned banks with longer term maturities (say 2028 to 2030, they are callable between 2024 and 2026) with a 4% interest rate at current valuations (which are below $100). Even if they did get called then you would get the capital gain and the better interest rate for 4 to 6 years.
Do you think it would make sense to sell a bit of CBO and buy a few of these bank instruments in the current environment?
Your opinion is much appreciated. Thank you.
Read Answer Asked by Dennis on March 23, 2020
Q: XBB, HFR and FLOT have not held up well during this challenge. Can you suggest some liquid bond ETF's that will simply stay flat and pay a modest dividend?
Read Answer Asked by Gregory on March 23, 2020
Q: Considering buying US large caps ETF when things turn more positive.
To hedge or not to hedge with the Cdn$ having fallen so much largely but not only because of the Russia/Saudi war on the price of oil - which will get resoved. I understand under normal circumstances your preference for not hedging.
Thanks for your great service especially during these uncomfortable times.
Read Answer Asked by bill on March 23, 2020
Q: I'm looking for tax-loss harvesting guidance with some ETFs. Can you provide alternatives to hold for XEF, XEC, and VUN that would likely be accepted by the CRA as non-wash? Thank you!
Read Answer Asked by Andrew on March 23, 2020
Q: Your suggestion to not have covered calls make sense, however can you suggest ETF's to replace the 3 I have?
Also you say this is a good time to buy dividend stocks, can you please suggest some good ones.
Read Answer Asked by Bonnie on March 23, 2020
Q: Retired, dividend-income investor. I own ZWC and ZRE and am thinking of topping them up. Their share prices have obviously taken a hit and buying more at these lower prices with magnified dividend yields "appears" attractive.

What I am wondering is related to the continuation of the dividend. By my numbers, ZRE is yielding 7.4% and ZWC 10.5% (annual dividend divided by current stock price). Am I correct that the yields are supported by not only the underlying security, but the covered call option? What happens if the underlying security reduces their dividend? I guess my real question is...is there a risk of the ETF dividend being cut?

Thanks...Steve
Read Answer Asked by Stephen on March 23, 2020
Q: I understand that a covered call investment is not the holding to have during a market rebound.

Instead of ZWE, which ETF would be appropriate holding to capitalize on a rebound.
Read Answer Asked by Peter on March 23, 2020
Q: Just read your March 17 Stock Market Update article regarding "Where is the bottom???" and the bear Market histories. Very enlightening.

I have been almost entirely in cash for over a month now and noted your portfolio changes. You mentioned Adding a new 4% position of BMO Equal Weight REITs ETF (ZRE) in the Income Portfolio. ZRE has been very steady since inception in 2010 gaining almost 40% over that time period until the recent unprecedented and understandable 37% drop since Jan 31.

My question is where should we park our cash while we wait out this terrible situation? Should we just leave it as cash? Is the BMO ETF a suggestion for a short term hold? I did read your Trade Rationale and was a little confused by your comment "remove some of the 'tail risks' that might be seen if there are issues at any individual company." Am I right in thinking this is in reference to ZRE being an ETF? Apologies for my ignorance.

Thanks for all you do

gm
Read Answer Asked by Gord on March 23, 2020
Q: With a highly leveraged ETF like JNUG getting wiped out 90+%, what is the risk/reward of having a small position at current levels? If the sector sees a recovery and the fund returns to even close to where it had been there's potential for a small investment to be worth something if you took profits and sold the position. On the other hand, if there is an extended downturn, what is the risk of just holding the position aside from opportunity cost? Thanks.
Read Answer Asked by Dustin on March 23, 2020
Q: I have held the above stock, (TD) for several years and recently sold,, as it has easily been the most volatile stock in my portfolio. I am thinking of spreading the risk by investing in a good bank etf or reinvesting in one bank when the situation calms down. What are your thoughts, and if the etf route is best, which one or ones would you recommend.

Thanks, David
Read Answer Asked by david on March 23, 2020
Q: Hi,

Could I get your opinion on 2 investment paths contemplating at moment for equity portion of portfolio?

At moment my equity exposure is passively invested in IWO, VGG, VIU, VEE. I am trying to decide if I should sell off this passive postion, in part or entirety, and invest in individual beaten up securities, for example a number from your recent reports for North American exposure.

The objective would be to have a higher return 2-3 years out from this market. Not really concerned with volatility.

Thanks
Read Answer Asked by John on March 23, 2020
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