Investment Q&A

Q: On March 9th a special report was shared with 5i opinions on ten potential stocks to consider in the near future. That seems like eons ago considering all that has transpired. Would the advice on these stock picks remain the same today or would there be changes made with the selections? Thanks Dennis

Q: Assuming a youngish investor with a high risk tolerance and no cash flow/liquidity concerns, would it make sense to consider dipping into some "reserve" ammunition now and over the next few months in the form of LOC's/margin? Thinking being, from these levels, over the next 5 years imaging a 7% total return seems highly probable. With credit available below that rate, along with the ability to deduct the interest expenses, profitability seems likely. If this is a tactic you could even begin to condone, would you have any guidance such as a maximum amount of credit compared to invested capital to deploy? Also, assuming HELOC is not an option, any tips on finding the best rates and sources of credit?

Q: Hello,

I’ve been reading a lot on P/E ratios after your special report. From what I can gather once a company share is priced at 12 or lower P/E that typically this is a good buy for a long term hold. Is this typically accurate in your opinion?

Also, can you provide a site, which we would have access to, that provides the most accurate/up-to-date P/E ratios.

TIA

Q: Can you suggest any place where I can monitor for canadian companies suspending or reducing their dividends? Thanks very much.

Q: I am a 73 man relying largely on my RRSP for income and it is being eroded very quickly. I have no bonds or other fixed income investments preferring instead preferably dividend paying equity’s. know little about bonds and other fixed income products and would appreciate any advice you have on specific investments I should consider.

Thank you as always for your advice.

Don

Q: Hi 5i,

We own NVDA in our RRSP on the USD side and want to increase our stake by 2%. We would then have a 4% position. We are contemplating the benefits to sell this position on the US side of our RRSP and buy it in our TFSA (now that we have room) or purchase it in CDN funds to benefit if the CDN dollar drops.

Do you have any recommendations?

Debbie and Jerry

Q: Hi team - I was hoping to get your general thoughts on leveraging during this time of turmoil. Some of the Cdn banks are throwing off significant yields, CIBC for example 8.09% at the time of writing. I can't find any info on when they last cut their dividends even during the 2008 crisis. I'm considering using my HELOC at 3.45% (interest payment s only) and buying one of the banks and collecting the difference between the yield and interest charges. As well, writing off the interest payments next year as carrying charges in a non registered account and thinking the stock will grow in value over the next year or so. Is this a sound strategy or should I shake my head, your thoughts? Thanks.

Q: Good afternoon,
With the US$ significantly spiking up of late due to extreme market volatility, would it make sense at this time to journal US stocks such as AQN, BAM.A, etc back to the TSX Cdn exchange? This may well be a short term trade if and when the US$ drops back to more reasonable levels. As usual your thoughts and comment would be most appreciated. Thank you.
Francesco

Q: My queston is regarding the U. S. dollar. Why does everyone keep flocking towards it during times of crisis when they have such massive, massive debt, thanks?

Q: I am 88 and have followed the market for many years, and your valuable service since inception. I am leaning towards selling 50 of my 80 equities and following only your Balanced Equity Portfolio rather than my own intuition. Life would be easier!! I hold 15 of the recommended BEP stocks, but do not hold AEM ATD.B BAD CAE DSG GC GIL NFI WSP. I have like others, lost 50% of my 4 million $ portfolio, and am considering trying to utilize my losses. My options appear to be; 1.Selling all my stocks; 2.Selling only my losers and all those not in the BEP; 3.Buying back immediately those in the BEP that I don't presently hold, and the rest after 31 days.
4.Waiting for a turnaround before any buybacks. Your opinion will be much appreciated on which of these or no action or a better strategy suggested by you can achieve my goals of reducing my portfolio to the BEP total and utilizing my present losses at the same time, and does it make sense in timing in this meltdown environment ? Many thanks in advance for your consideration.

Q: Hi team,

Thank you for your response to my SWP question. I wasn't aware that they suspended the dividend, so that was definitely valuable information!

My question is regarding debt. Could you please describe what criteria you use when evaluating a companies debt load?
I realize that many factors go into this evaluation, but do you have a quick rule of thumb that you like to rely on?
Or perhaps a rule of thumb provide members for companies in todays economic environment?

Thanks again!

Q: It would helpful if you would explain to your clients the meaning of liquidity. For example if one were to try to sell ECN.PR.A the bid is 13.80 the offer is 16.50. More sellers than buyers. The market isn’t working as it does under normal conditions. People just want to sell irrespective of what they would do under normal circumstances. Don’t let fear overcome common sense. This too shall pass.

Q: DOO was downgraded to market perfom from outperfrom from BMO with
the target going from $72 to $26. Such a drastic change! I am guessing
it is virus related. If this is the case, wouldn't they slash pretty much
every stock this drastically? Thanks

Q: Considering the current emergency, what is the best way for a Canadian investor to buy American dollars?

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

Q: On Sunday, PBS Wealthtrack aired an interview with a well seasoned advisor, R. Kessler, who recommended to raise cash as the damage to the stock market will get worse before it gets better due to a severe recession etc. His case made a lot of sense, and I would be interested in your comments on this statement.

Thank you!

Q: I am trying to evaluate the appropriateness of selling covered call options in this market and thought with your experience and knowledge you might be able to analyse the situation. The premiums are high . But, I the risks are, too. You mention that a good way to get into this market is average into it. Well, if you buy Microsoft to sell a covered call on, you have to buy one hundred shares. That doesn't look like averaging in. You get a good premium But the market is so volatile that in a month, the stock could be much lower, and you have lost your opportunity of averaging in. Or, the virus could be more under control and the stock could be way over the strike price. And you may have lost the opportunity to have microsoft at a lower price. I know that this is always the case with selling covered calls, But, it seems that the current market exaggerates that situation. The only way that I can justify it is by saying that I dont think the turbulance will be over in a month and therefore go ahead. I suppose another safeguard would be to do limited covered call trading and average in with other money. I would be interested to know your perspective on this.
thanks

Q: I am an 88 year old, investing for over 70 years, and an appreciative member of 5i since inception. My present objectives include creating capital losses; reducing my formerly 80 stock non-registered portfolio to only those in your Balanced Portfolio; thereby making my life easier so that I do not concern myself each day with fluctuations, and let you make the decisions;etc., I believe I have the following options; 1) Sell all present losers; 2) Henceforth buy or sell only stocks in the Balanced Portfolio 3) Where the 30 day rule applies, buy comparative stocks for the 30 days).. What is your opinion? Do you have better proposals in view of the present crisis? Thank you in advance for your usual consideration and advice.

Q: Two questions: I'm currently transferring from Mutual funds into Questrade. Is it a time to hold off doing that given that the transaction takes place 10-20 business after the request. Also, is it more stable to buy in US funds during this crisis?

Q: Good Afternoon
Can you please provide a site where we can get the prices of Corporate Bonds?
Thanks