Investment Q&A

Q: Re the massive purchase last week by Softbank of call options of tech stocks which your message says caused the sudden price ramp up in the market, and led investors to rapidly sell once they found out about the Softbank purchase (and it seem are still vigorously selling), can you suggest a way to avoid the big losses that rookie investors like me have been having as a result? I was thinking about how to communicate such qualitative information, since most investors are aware of the quantitative info sources. Could you consider adding a market barometer that becomes active when such significant events occur with maybe a couple bullet points to explain the rise or fall ? In any case, your good advice remains exceptional and many in my category are much further ahead because of it.

Q: In an earlier question, you answered that you’re not a fan of buying options. Was that specific to short-term options? What’s your opinion on long-term call options as a buy-and-hold strategy (i.e. rolling LEAPS forever)? Thanks.

Q: A huge thank you to 5i! I joined in January 2014 and transferred my RESP which was previously invested in a Cdn Dividend Mutual Fund to a self directed account. With the assistance of 5i's Q&A, I managed to grow the $110,000 in January 2014 substantially. I have put my two children through university, one at a cost of $91,000 and the other at a cost of $127,000 (different U's, different programs). The current balance in the RESP is $70,400. For the majority of the past 6 years, I held approx 25% in VSP, the balance were all stocks (20) that were recommended by 5i, not all were huge winners, I may have even had a loss or two, but I did purchase BYD, CSU, FSV, CIGI, ZQQ. I did not start my RESP until my daughters were 3 & 1 and it was a struggle to put $5,000 a year into the RESP for many years. When my daughters started U, my rule was to sell enough stocks in May for the next year expenses and keep the balance fully invested until the following May. Perhaps the market did extraordinary well over the past 6+ years, I don't know, but I do know that I could not have done it without 5i's assistance.

Q: I have a question about 2846 - Softbank - SFTBY

Dear 5i,

A recent article in the Financial Times states that the latest increase in many of the high technology stocks is related to Softbank purchasing a high volume of derivatives lately. Can you explain in lay mans terms how this can cause stock prices to go up and how this can cause stock prices to go down rapidly. I don't really understand option trading and would appreciate your comments.

thanks for the great service!

Q: As younger person starting off their professional career, I am now contributing to the federal public service pension plan and look forward to benefitting (defined benefits) from that in 25+ years. I am hoping you can provide some guidance and insight on how I best manage my own self directed portfolio in combination with contributing to the pension. How should I be looking at equity to fixed income ratios as well as sector allocations between my own directed holdings and that of the pension. Or is it better to treat them independently? As a subscriber to your portfolio analytics, I am just trying to figure out how to balance everything as I continue to develop my first portfolio during these turbulent times.

The pension website breaks its net assets per asset class (not broken down in an easy format to compare with portfolio analytics) as: 47.8% capital markets, 14.2% private equity, 14% real estate, 10.8% infrastructure, 7.8% credit investments, 4.5% natural resources, 0.6% complementary portfolio, and 0.4% other.

I also just wanted to say that subscribing to 5i has been the best investment decision I have ever made. You provide an amazing service. I just wanted to highlight the significant financial and investment education you provide through your answers, blogs, monthly updates, etc. These have been extremely valuable to me as a new investor.

Q: Hi, you mentioned in a previous question that companies with warrants and Convertable Debentures tend to have higher short interest, please explain, thanks?

Q: good Saturday on our Canuck Labour Day week-end....from time to time, I breeze through the investment stock summarizer of BNN Market Call tv shows, aka Stock Chase....and a new name appears - Billy Kawasaki....with his "Insights, Picks from 5iR"......what can you tell me about Billy???........curious Tom signing off

Q: hi 5i,
Would you please comment on this article;
David Rosenberg: No matter how you slice it, markets are in a bubble of historic proportions; And the higher they are, the harder they fall.
https://financialpost.com/investing/investing-pro/david-rosenberg-no-matter-how-you-slice-it-markets-are-in-a-bubble-of-historic-proportions/wcm/ccfab059-78b1-480e-8b01-b3ae4cefe8d0/

thanks

Q: I was reading your column last night in the Financial Post and you mentioned the VIX. I trade with TD and when I enter the call letters VIX, I get a whole list of different ones with different valuations. Which one do I use for what you were talking about.
Thanks for your great advice. Have a nice long weekend.
Shirley

Q: Short interest , does the level of short interest provide any insight on how the market feels about a company. Is it a metric that 5i uses ?
Thanks

Q: Greetings 5i,

Don Durrett was a guest on Mining Stock Daily podcast last Friday. good listen for sure. Don has some interesting opinions on the precious metals market today. Most bullish on mid tier low cost producers. Id give it a listen if interested in this sector.

Cheers!

Q: Hi, I am the sole owner of a rental property that amounts to 25% of my
total assets. My existing equity portfolio consists of another 25% of
my total assets. The other 50% consists of my principal residence and
cash. I am about to turn 65 (widowed), and am thinking of selling the rental property and using the balance to buy REITs for income. I'd
like to get your thoughts on:

1) The financial tradeoff between owning a physical rental property
and owning REIT shares. Over the past few months in Toronto, property
prices have gone up as much as 15% but REIT prices have decreased
drastically on the TSX. Does it make sense to keep physical real
estate when REITs are discounted (or maybe they're actually priced
appropriately for the future?) Being a landlord requires a fair bit of
work and I'd like to take it easy in retirement.

2) The optimal percentage of total assets in the stock market during
retirement. If I sell the rental property and invest those proceeds
for a total of 50% of total assets invested in the stock market, do
you think this makes sense, or is that too risky? I have very low/no
exposure to bonds.

Thanks in advance.
Esther

Q: Good morning 5i folks. Apparently, I've fallen behind on my financial acronym homework . I guess I need to bone up.
Can you enlighten me as to what constitutes a SPAC ?
Thanks, David

Q: thanks for the recent risk ratings answers for US stocks....I use the information to set my target weights.
and I want to mention this is one thing I struggle with, like how to set target weights for each stock in a portfolio.
yes, I know for a blue chip stock, the weight could be 4 or 5% and for smaller cap stocks, like 2%......but really in setting the target weights, I'm in the dark!!!
with this in mind, perhaps you could keyboard your thoughts on what the process is or key factors are.......anyhow, thanks!......Tom

Q: Good afternoon 5iR,
I am requesting help with understanding why Manulife would trade 22,000 boe/d for 12.5% of Whitecap’s and NAL’s combined 82,000 boe/d, which amounts to 10,250 boe/d. All numbers from Whitecap’s August 31, 2020 press release. Why is a barrel of Whitecap’s oil worth over 2 barrels of NAL’s oil. Are NAL’s reserves much lower than Whitecap’s. Otherwise Manulife is to be lauded for taking the long term view for value of a growing, progressive Whitecap and Whitecap is to be congratulated for making a great deal especially with respect to deleveraging the balance sheet.
I do not own shares in WCP or MFC either directly or indirectly.
Thank you for your highly valued assistance.
Cyril

Q: hi 5i. i bought a gov of canada rr bond dec1 2026 it was worth 24000 at issue it market value now is $ 50,010 does the value drop down to 24000 on dec1 2026 thanks as always brian

Q: Over the years Apple has been pursuing an aggressive buyback program and now with the split it has increased the share count. Does the split undue the benefits of the buy back and if so why do the split outside of getting more retail investor to buy into the name?

Thanks

Q: Retired dividend-income investor. I hold CDZ for the long term and currently have a 75% position, topping up regularly to achieve a full position by year end. When originally purchased the yield was in the range of 5.4%, now it is 3.7% due to some of the constituent dividends being suspended. I believe CDZ is reconstituted annually. When this happens, what will happen with the dividend? With the potential changes to the underlying securities, will the CDZ methodology cause the dividend to increase somewhat?

I am "ok" with the current dividend. I am just wondering if I will get a bit of a bonus when the ETF is reconstituted?

Thanks for your help...Steve

Q: The announcement they made yesterday regarding a reverse split, then a re-split is something I have never seen before. I don't hold the stock, but was curious as to what you think of this move.

Q: How can I obtain information on what price warrants can be exchanged at and for what period of time? Currently, I would like that information on AESEW, but I would like to find sites that provide that information on other warrants. Thanks for you help.