Investment Q&A

Q: Hi Peter and gang.
Nice seeing you all at the Money show. I'm looking to get exposure to the US market and I've yet to dip my toe into the ETF field. However the CLU seems to consistently be reported in Money saver in the top ten. Would you recommend this as a way to get diversification in the US and which of the three do you think would be most appropriate. All of my money is invested in Canadian stocks at this time.
GUY

Q: Do you have a preference at this time? (Unhedged vs. Hedged). Thank you

Q: I am looking to take advantage of the expected year end rally. I would appreciate your recommendation for any stock or ETF's with the best expected momentum and your view on this strategy.
Thank you as always for your wise advise.
Raouf

Q: Hi Peter
I want to get into the technology stocks. ZQQ and IGM (US) have similar holdings but a huge difference in cost to get in. Do you think these ETF's have similar potential? Many thanks for finding IGM.
Cam

Q: Hi Team
I have my full allocation of 30% bonds in the etf CBO, is this a good strategy, although I get dividends the share price is down 2.86%.
I was wondering if I should hold more than 1 bond etf.

Q: Hi, I am considering BXF (combined with CBO, VSC, XHY and VSB) for my fixed income exposure. They will be roughly equal percentages totalling 30% of my portfolio. Can I have your advice about this? Would the take over of First asset by CI affect the underlying etfs? Are there any fixed income vehicles for taxable accounts (I was considering CPD)?

Q: Hi Peter
I'm trying to find an ETF called "ishares trust Shs s&p GSTI technology index fund (IGM)" mentioned in the Globe today (Monday) as an upgrade. The only IGM I found was a financial company. I assume they are not the same company. Are you able to help me? If so, what do you think of this ETF.
many thanks.
Cam

Q: I have a large cash position and I am giving consideration to purchasing VCE Vanguard FTSE Canada Index and and VFV Vanguard S&P 500 Index rather than purchasing individual stocks based on the premise that generally indexes outperform managed funds and are less costly to manage. I would buy 60% VFV and 40% VCE. Would appreciate your opinions. With thanks, Bill

Q: I always had bonds equally spread over a 5- year period. However, it is getting very difficult to buy bonds. Since i want liquidity, i am considering an etf like xsb or xbb.
I read that if interest rates go up, there will be a loss of capital equal to the average duration for each 1percent increase. For ex. The average duration for xbb is 8 years, thus if interest rate go up by 1% the unit price will drop 8%. If over the years interest rates go up 3% the unit price will loose 24%. Thus, i fail to see how i could ever recuperate the capital loss even if the distribution is reinvested.

Since many people are using bond etf, i must be missing something. Could you please tell me if my description of the risks associated with bonds etf is correct.
Thank you

Q: What is your opinion on cpd?
is it a buy now and what is your future outlook?
Would cpd rise with a rise in interest rates and with interest rates at the bottom this would be a good entry here?

Q: I have a new baby (less than two months old) and have just set up an RESP. We plan to contribute $2500 each year to get the government grants and grow a portfolio. Because $2500 is fairly low, what would you recommend as a starting equity position for this? Would something like GUD or DHX.B be a good start, or wouldis there an ETF be recommended first?

Thanks!

Q: When comparing a bond ETF to a ladder of individual corporate bonds is the MER, in this case .46%, greater or less than the bid-ask spread of the individual bonds? or asked a different way - is it cheaper to own XCB or a ladder of individual corporates? Thank You

Q: Could I please have your opinion on what to expect from this ETF over next six months to two years?
Thanks again
Larry

Q: Good morning!! I am using a margin account offshore to borrow CDN dollars and paying in $US...currency upside..I am looking for dividend stock as part of the portfolio to pay the interest charges...I am ideally looking at yield over 5.5%...I currently have many of the favored (WSP,BEP.UN,CSH.un,SIA,REITS, AD, ENB,SLF, TD)..i was thinking of adding VNR,IGM,WIN...or would you suggest adding to existing portfolio of "higher" yielding stocks...no tax issues...

Q: Is there an equivalent with lower fees?

When I renew before Dec 1 will my subscription still go to April?

Q: For better diversification of my portfolio, it has been recommended that I invest in a couple of US ETF's. John DeGoey, who was speaking recently on BNN, thought that the Canadian/US dollar is probably at its lowest point. He suggested that Canadians should buy hedged ETF's to take advantage of the future increase in the Canadian dollar. Would you suggest that I buy Canadian dollar hedged ETF's for US consumer staples and utilities at this point, then switch to US dollar ETF's when the currency ratio is more favourable? And if you think this is a good idea, what hedged ETF's would you suggest? Thanks!

Q: I enjoyed your Small Cap essay. I had to get to pg4 to know which small cap indices you were using. Pg4 & beyond said MSCI, but which MSCI?

Why would you compare a Financial & resource heavy Tsx to ,say, IWO or any MSCI small cap.

You have been a long term IWO advocate. Is there a C$ ETF that would provide access to IWO stocks as VUS/VUN do For access VTI?
Also can you suggest ETFs in any currency that follow MSCI Indices?

I ask few questions, but follow with interest your daily stream. Thanks for what you do
Ernie

Q: Hi guys. I own XLV.us, IWO.us, CXR, SIS, SIA, and PLI all varied weights and losses or slight gains in different accounts for a total weight dropping to 7% and dropping more. My question is do you see any of these as a Sell for the time being (perhaps a year or so)..to be bought back when the sector starts to look better. and freeing up cash for better places to hide. Perhaps GUD??? Thanks for your tireless support! We cant do it without you.

Q: Could you tell me the difference between XEM and XEC emerging markets ETFs. Do you have a favorite ETF in this sector, perhaps ZEM or something else?

Q: My friend, age 59 and recently widowed, is interested in investing “a few dollars” to get some growth. Her modest portfolio would be just under $100K. Although she and her husband worked hard all their lives, her husband’s serious terminal illness took away much of the equity they had built.

On the plus side, she has no debts, owns her home outright, has a small pension of $750.00 per month, and works part-time, which covers all her needs. She plans on working as long as she can and plans to be able to contribute $300 per month on a continuing basis, to her TFSA, so she doesn’t foresee touching any of her capital for the next 10 years.

My very real concern is: should she be in the stock market at all? Granted, if needs arise, she could sell her home which would conservatively net her $500K. But, in the meantime, there is a very thin financial cushion between her and any serious financial needs. If she gets ill and is unable to work, that $100K could disappear very quickly. She has no disability insurance.

She says that at some point she will sell her home. As such, I thought it might be better for her to wait to get those funds in hand before jumping into the market. She prefers to start now. Her bank has advised her with a handful of mutual funds, but she would rather not.

Given the above scenario, what would Peter advise to someone who came into his office? Would it be wise, in any way, to get into the market, with some conservative companies and/or ETFs? If so, would you please suggest what percentage of her funds might be prudent for her to invest, and which companies/funds she could start with?

Thank you, sincerely, for addressing this “real life scenario”. My friend’s situation makes me think there are so many more people, just like her, who struggle with this same problem, as they near their retirement years.

If you feel this would be useful to the general membership, feel free to publish.