Investment Q&A

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.

Q: Good morning,
My grand childrens' (8 years old) in trust accounts each have $60K in CASH and would appreciate your thoughts and comment on the merits of my following investment plan:
Q1. Investing $20K in each of these funds (HXS, HXT and HXQ) and not selling any of them until the children are 18 years old at which time they would each open a TFSA account and start transferring each year the maximum annual TFSA contribution allowable from their non registered account to their newly opened TFSA account; and
Q2. Assuming that you are ok with the above plan and given that there may well be still a further sell off in all three sectors, when would you recommend initiating a full or partial position in all three sectors? Thank you.
Francesco

Q: i was shocked to find numerous footnotes at the end of answers that state 5i staff own the stocks you are commenting on. I thought your major selling point was being unbiased by not owning any stocks, just getting paid for analysis. How can you be unbiased if you own the stocks? How does this make you different from the talking heads you often criticized?

Q: What is your opinion of the mortgage rates which are rising as the Bank of Canada cuts rates down to .25% and bonds are also losing ground ? We are due to renew our mortgage in 3 weeks and are very concerned that the current pressure from mortgage deferrals re covid19 is causing the banks to raise rates for those of us that are financially strong to offset the costs of covid19 costs. Will the government allow the banks to not only refuse to pass the reductions in interest to consumers but also raise them ? Please advise what your thoughts are.

Q: Someone came on BNN who used a technical indicator to call market tops and bottoms
but I never wrote it down. I believe it was a breadth indicator that seemed logical.
It was when a certain percentage of stocks(15%? 50%?) go over a moving average? like 20 day? 50 day? after a bottom. Going below the moving average after a market top would give a sell signal.Does any one know the name of that technical signal?

Q: Can you explain why VFV is outperforming VOO (by 7% on a 3-month chart comparison, and by almost 5% over 1 month)? Aren't they basically the same, other than the currency they trade in?

Q: What is the best strategy to follow when you want to sell a stock but it is coming up to its ex-dividend date? If you hold the stock until it is ex-dividend you get the dividend but doesn't the stock price falls to reflect this? If you sell before, you don't get the dividend of course. First, am I correct that stocks do normally fall after going ex-dividend? If so, do they fall by the amount of the dividend? Do they tend to return to the pre-ex-dividend price within a few days? Or is every situation so different that there are no rules and you just take your chances?
Appreciate your insight.

Paul F.

Q: Hello 5i Team

I found this site recently, it appears to have a substantial amount of information on Canadian preferred shares. It appears to be a recently created website in the last four months. Share with fellow members if appropriate.

canadianpreferredshares.ca/

Thanks

Q: Dear 5i,

In a recent post you cautioned against the use of Stop Loss orders and suggested alerts and limit orders. Can you please help explain your reasoning behind these recommendations. I have used all of these including Trailing Stop Loss with Limits and often struggle with which one to use when I wish to buy and sell.
Knowing pros and cons of each type of order type would be helpful to myself and your subscribers.

thanks

Q: hello 5i:
this is a currency question. My watchlist is made up of US stocks that we have partial positions in and which I want to add to. The Canadian dollar is, as we speak, in the .708 range. My expectation is lower, but not dramatically lower equity (lets us the S&P 500 as a proxy) prices. I need to convert Canadian dollars to US dollars if I want the currency diversification. What to do? Waiting will see (probably) a higher Canadian dollar at the price of higher US equities. Please help me make this decision: I'm stumped. Put another way, what would YOU do in this situation, realizing what works for one doesn't necessarily work for another.
Paul L

Q: THIS IS MORE A GENERAL QUESTION REGARDING PREFERRED SHARES.
ARE THE COMPANIES BOUND TO PAY THE DIVIDEND IN ANY ENVIRONMENT, ESPECIALLY THIS ONE?

Q: Where can i access the Top 10 stocks to consider currently,.as mentioned in your renewal promotion. thanks

Q: Hi Guys
a bit of a conundrum here, i came into the crash with 45% cash hoping to buy some U.S. stocks, but the low CDN dollar is making me question whether it's worth it. I'm usually a long term holder, buy U.S. stocks for their dividend growth over time. Whats the most you would be willing to pay for a U.S. dollar when buying U.S. companies, my thinking is around $1.40/ $1.41 is this to high?
thanks Gord

Q: Do large pension plans such as CPP and other provincial plans carry a portion of their holding in cash, with the thought of taking advantage of severe drops in the markets

Q: Hi hope your can help - when the btm fell out of the market I had $1.3 million in stocks presently sitting with $800 (90 % cash) - did not start selling until the market hit 20,000 on the Dow then it was a race to the btm needless to say I also missed last weeks rebound question is how to go from here to start to rebuild. I am retired so too much risk would not be desirable PS I have enough in another retirement account ($500,000 to last 5 yrs Any help you can offer would be appreciated

Q: RE: Bank of Canada announcement about the secondary market purchases of Government of Canada securities.

What's your opinion about this?

"The effective start date is 1 April 2020. Program details are as follows:

Purchases will begin with a minimum of $5 billion per week across the yield curve. The program will be adjusted as conditions warrant but will continue until the economic recovery is well underway.
Operations will be conducted daily.
The operations will be cash purchases conducted via reverse auctions.
Following the launch of this program, the Bank will discontinue the Government’s repurchase operations (both cash and switch buybacks) and cash management bond buyback operations done as fiscal agent. The Bank`s secondary market purchases will provide significant support to the liquidity and efficiency of the government bond market, reducing the need for these fiscal agent operations."

Q: Good Evening
On the CDIC website it is stated that an individual is covered for up to $100,000 on the cash account of a CDIC member as well for an additional $100,000 for a TFSA and another $100,000 in a RRSP/RRIF acct. for cash held.

Are the TFSA and RRIF accounts covered if they are registered with a discount broker associated with one of the major Canadian banks?
Thanks

Q: How do I access this video? Searched YouTube. Video is 'Private' and inaccessible.

Thanks

Q: Thank you for Portfolio Analytics. I have found it a quite helpful. Last year it was a very timely wake up call for me to make adjustments to the portfolio and allow for higher fixed income exposure and better geographical exposure. Thanks again in your guidelines

Q: Some of my holdings like BEP.UN has become more than 5% total weight. Would it best to trim and sell some in this environment , and add to those that have a very small weight due to the price coming down so much? They are stocks and ETF that 5i recommend.

Thanks