Investment Q&A

Q: I have a friend who has trusted his advisor completely . His basic investment account has 92 positions ... less than one third of the value in US and Canadian equities ( all in odd lots, like 14 shares of AAPL @ a profit of $56.00 ) , but most are in Mutual Funds ( everything under the sun ) . RBC have convinced him that because it is a million dollar portfolio, he gets a very “low fee”, You have trained me well ... stop this insanity right ? Buy great stocks and where you want broad exposure and indices buy ETFs ...right ?

EXCEPT
I don’t know how he can get out of 40 mutual funds and 50 stocks without incurring ridiculous trading fees . His RSP,RESP and TFSA are all structured in the exact same manner ... same exact funds
If , for example , he directed his broker to transfer all positions to RBCdirect investing , would he avoid the initial hit of over 350 trades at 9.95 each ? OR does one make a deal with the advisor to get him out of this stuff ? OR does one make a deal with a different broker altogether ? OR does one complain to the securities people ?
I don’t know what strategy to use , but as per your video , he will be giving his advisor hundreds of thousands in fees and commissions .

Q: Thanks for adding the MER calculation. I find that number very useful.
I was wondering what a reasonable MER percentage should be on a larger portfolio of approximately $1.0 million. Should the range between .05 and 1.0 percent or should it always be less than .05 percent? It seems like paying $10,000 per year on a $1 million dollar portfolio is a fairly significant number.
Thanks for your great service!

Q: EVERYONE IS IN ON THIS OBSERVATION.
DOES MAKE SOME SENSE.

https://ritholtz.com/2019/11/value-has-never-been-this-cheap-vs-momentum/

Q: Co. stock buybacks are not what the mkt. wisdom says.

https://www.youtube.com/watch?v=nJkF2FdHAiM&t=328s

Q: I'm 21 years old and am planning on making a TFSA portfolio of Canaidan companies (Mostly Blue-chip dividend paying stocks, IE, Banks, Telcos etc....) to buy and hold forever. I'm also planning on adding SHOPIFY in my TFSA and placing BABA in my RRSP. I was thinking XAW in RRSP as well top get american/international exposure, Just wondering your thoughts on this and any advice would be great. Also do you think it's a good idea to invest now or wait for a market correction or just avergae in over time in all of these companies.

Q: I'm doing a review of my equity holdings. I note that there are 4 CDN stocks that have each made slow, but consistent gains, since purchase. Also, each pay a dividend. However, as components of my overall portfolio, they now represent less 2% (average is 1.7). (During the same period, my other equities have grown to surpass 5%). My question is whether I should increase those small weightings (all held for 5+ years with no worrisome setbacks)-- or let them go and deploy that capital to other more growth-oriented prospects. Thanks.

Q: Brookfield Renewable Partners (BEP.UN) now forms just over 9% of our joint registered investments and although that is much higher percentage than any other holding (and may be inadvisable), I am somewhat reluctant to sell any, because it is one that has been a winner from the day I bought it. That is in stark contrast to quite a few other stocks that I apparently bought at their height which have since plummeted.

I need a trimming strategy and would like you to give a detailed description of how best to maintain the number of shares held as long as possible, but sell some if the price starts to drop. Perhaps there is a link that you would prefer to send to me.

I have read your opinions on Limit and Stop Limit sales at one stage or other and have also tried this, but it hasn't always worked as I thought it would.

What would you suggest is the best way to address this?

Q: Hello 5i Team
I currently own ALA with a purchase price of $20.80.
I desire to sell the stock at $20.80 or greater before the end of 2019 with a preference after November 25 so I receive the December 15 dividend.
Which is the better option:
1 - Do I enter a limit order ($20.80) with an expiry date of December 27 and wait for the order to fill?
2 - Do I sell a call option (December 20, 2019) with a strike price of $21 which provides about $0.15 per share (before commission) and if the shares are not called away, then sell the shares after December 20? The option premium will further reduce my cost basis.
If I sell a call option with a strike price of $21.00, if the share price rises to $21.00 on November 25 (as an example) are the shares called away immediately or are the shares called away only if the share price on December 20 is equal to or greater than $21.00?
Thanks

Q: hi,5I
The question regarding the .05 cents. It intigued me also, I have seen 1 cent differences in trades also.
I think it is coming from the ''obligation '' of brokers to cover the the trades in the the ''best interest'' of their clients. So the first lot is sold or bought at .o5 less that what is supposed the ask or bid and the rest at existing bid.
I have lost also bids that were not covered for the same reason or only 500 units for a 10000 units bid... The ''creativity'' of the brokers never stops.
Everybody need to have their share of the ''retail''cake.
I have seen 1000 trades sold or bought per lots of 100 shares more and more. Also there is the practice of brokers to actually show on level 2 just 50% of the orders which is so wrong...
I have learned to live with it after so many years and moved on
I do not know if i am right in my suggestions, so any corrections will be welcomed.
Print at will

Q: There have been a few questions lately about dividends paid in USD into USD denominated accounts. In my experience with RBC, the USD-denominated dividends of BEP.UN were first converted to Cdn dollars at the official exchange rate by the company that distributed the dividends and then converted back to US-dollars at RBC's exchange rate. As a result, one gets less of a dividend than expected and, in my mind, this defeats the purpose of collecting the dividend in the USD-denominated account. Buyer beware.

Q: Hello
I recently sold some SU and one lot filled at 42.745. I thought stocks of this value trade at even penny increments. Is this normal or did broker make mistake?

Q: Just curious. Who are those that can't buy limited partnerships like BEP.UN? Thanks.

Q: I am wondering your thoughts on if options on the energy sector stocks would be a reasonable gamble given the current state of valuation?
Do you see cpg as a good stock or which others do you recommend with options
Also open to the service industries for this industry

Q: Good afternoon!
I am helping a friend move away from mutual funds, and I note on Bloomberg that the "Current Mgmt Fee" for this fund is 2.1%, and the Expense Ratio is 2.61%. Am I correct in thinking this means that 4.71% comes off the top here before valuation?
Also, over 77% of this fund owns other BMO funds, which I assume have their own deductions not included in the above. Is this also a fair assumption? Of interest, it says it is 2% to redeem!
Thanks! … Paul K

Q: Im 27 and Im looking to become financially independent VIA my investments by 35. I currently have $120,000 invested (90,000 in my TFSA, 20,000 in my RRSP, and $10,000 in cash) I also have $130,000 worth of equity in my rental property, which I intend to liquidate within the next few years to invest. I’ve got a mixture of investments including dividend stocks that’s are set up to DRIP, index funds, stocks that I researched, and some speculative plays. What do you recommend I focus on going forward? I’m looking at adding $2000/ month to my investment program. Thanks!

Q: I'm beginning to take socially responsible investing more seriously. If possible, would you please suggest 5 Canadian and 5 American companies that you consider to be socially responsible, AND at the same time, economically investable.

Q: CIBC Investor's Edge will allow you easily to journal Cdn stocks to your US side and collect the dividend in US dollars - no fees! 6.95/trade fyi

Q: Hi,
How concerned should we be over the increase in US corporate debt? There seems to be an increase in ratings downgrades and I am wondering about the overall effect of this in time should it continue.
As always, I appreciate your input and enjoy the Q&A regularly.
Dawn

Q: Responding to Richard comments of this morning at TDWaterhouse the security has to be in the US account for the dividend to be credited in US. At BMO investorline and Questrade margin accounts dividends are credited in US for US dividends.

Q: In response to Richards inquiry about US dividends. I deal with TD. I have an unregistered account. I opened a US unregistered account and journaled the shares over. I get paid Div’s in US funds for stocks like MG, CSU, MX, BAM and GIl. No fees at all. If I want to sell any sticks I journal the back and sell. Again no fees. I can do it myself or TD will do it for me.