Investment Q&A

Q: Hi 5i team,

Over the past several years, I moved a lot of funds to the U.S. for the growth opportunities. The CDN dollar has been range-bound in the 74-76 cent level but is now breaching 76 cents. I am inclined to think it won’t push much higher, as the FED is on hold and the recent U.S. job report was a lot stronger than in Canada. But you never know, so I am considering some hedging activity. I don’t really want to move money back to Canada. Is there a large cap S&P type ETF product that would hedge the CDN $ in my U.S. accounts?

As an alternative, as I am not really an ETF guy, is there an option to buy/add to some Canadian domiciled, inter-listed companies in my U.S. accounts, such as OTEX, MEOH, FTS, TD, others, assuming they fit my portfolio? If the stocks do well, and the CDN $ rises, then my U.S. priced stock will have to rise proportionately to keep pace with the CDN $ value. Does that option make sense or is it all a wash in the end?
Any other ideas for hedging a large U.S. exposure?

Thanks again for your insight, and for a great year in U.S. stocks, even though it is not your focus area.
Dave

Q: I would ask for some clarification re your response to my question re a custodial issue . Brokers note that "These securities are held in segregation and cannot be used in the conduct of our business " . Given that the securities are registered in the broker's name , how does " held in segregation " protect the investor ( the beneficial owner ) from a loss , as a direct result of insolvency of the broker , it's parent or affiliate ? Again , I refer only to a loss which exceeds the limited CIPF coverage . My question relates to a loss , not the probability of a loss . Also would you shed some light on the basics involved in registering shareholdings ? Thanks .

Q: When will the buying of stocks begin for 2020. Most of the stocks that I hold have traded below their averages for more than two weeks.
Appreciate your service.
Clayton

Q: The ALARIS stock is classified as Industrial in Portfolio Tracking. Shouldn't it be classified as financial since providing alternative financing to various companies is its sole business.

Q: Hi 5i team,

I sold some stocks in US market and wondering which currency should be holding. Could you please provide your outlook on the USD and CAD for next year or two?

Thank you,

Q: Unless our shareholdings are registered , the brokerage company is usually the registered legal owner of the shares . We are the unregistered beneficial owner . The CIPF coverage is limited essentially to $1m per registered account and $1m per non registered account . That and CDIC is the only protection in the event of a loss as a direct result of a brokerage insolvency issue . This is about such a loss , not the probability of such a loss . This is not about the quality of the risk management systems in place . High net worth investors are not protected against such a loss . Dividing the portfolio among several brokerages is one awkward alternative . Registering the shares via the transfer agent and registrar for each holding would address the issue . Is that practicable for an investor ( not a trader ) with ( 25) holdings ? The industry is not transparent regarding this security custodial potentially huge issue for high net worth investors in Canadian capital markets . Confidence may be misplaced .

Q: After Hours Trading Question: Perhaps you could educate me with respect to After Hours Trading. I have seen many examples where there have been trades after the close that have radically altered the 4pm closing price in one direction or another. However, in many cases where this occurs in the absence of news, it is being done with as little as one share changing hands. What would be someone's motivation in leaving investors with the impression that their shares have exploded or imploded after hours, when this is clearly not the case?

Q: I saw in a recent question there is a way to "Ledger over" CAD to USD to save on FOREX. Can you explain the steps to do this? I'm with TD.

Thank you

Q: Morning gents. Can you please explain or provide detail on why one would purchase a US listed stock (eg: NTR, BAM, WCN) vs. the same Canadian listed stock. I assume that payment of US currency dividends is one reason but are there others? Where best to hold US listed stocks from a tax perspective (registered or cash account)? Truly a great service. Thx. Steve

Q: Greetings,

I am getting close to retirement so starting to shift my portfolio to get a better balance of income and growth. Is now the time to start looking at preferred shares of companies that appear to be fully priced. For example, BAM. A appears expensive but the preferreds esp the perpetuals, BAM.PR.N appear cheap on a relative basis. I already own BAM.A but wanting to keep for the growth but want to add the Preferred to get more income. Does this seem reasonable given where the preferreds are currently trading.

thanks as always for your advise.
k

Q: Not a question but in your response to Helen on 9 December, you incorrectly indicated that she would pay a total of 10% commission. While you multiplied the commissions by 10, you forgot to multiply the stock purchases by 10 hence the error. Her total would be $100 commission on $10K purchases or 1%. Happy Holidays.

"If your trading costs are $10/trade, we would first consider these, for $1,000 in 10 stocks would be 10% in commission in total. "

Q: I seem to recall that you have recommended good books for newish investors to look at but could not locate your recommendations. Perhaps you could list a few that would be good for young investors just getting started.

Thanks, Bob.

Q: What is the typical year-end behaviour of investors, such as tax loss selling? Do investors take profit of high P/E or high flying stocks to cover losing stocks? Any other typical trend/behaviour? Thanks.

Q: Tagged this question to SYZ but it could apply to any listed situation. I'm looking for some trader perspective.

SYZ is relatively illiquid, TSX Venture listed and spreads between bid & ask sometimes wide. Not certain but think the market maker is Haywood brokerage house #62. Normal Course Issuer Bid is in place and I believe BMO brokerage is conducting that.

Recently I looked at live quotes showing visible market depth. Bid was small volume at 9.59 and small (but larger) offered volume at 9.68

I entered a buy order with volume size that would have taken out all of the visible offered at 9.68 and a little more up to 9.69.

My unsolicited limit buy order completely filled. Price received was better than the limit order price entered and midway between visible bid/offer prices on market depth.

Live quotes for trade history did not print the sales at either the TSX site or on Canada Stockwatch live trade prints. I do not know who buying brokerage was.

Live quotes after the done trade still showed same bid/offer prices and sizes on the depth of market.

Detailed long-winded description. The question -- Can you provide some background color on how some trade prints show up immediately while others (ie. above description) seem to be invisible. Just curious and trying to understand the behind-the-scenes mechanics of trade stuff better.

Q: Just a comment.
You suggested that the payment for the sale of drg.un will be imminent.
Bank have a habit to keep money as long as they can, institutions will probably be served first, your member (and me for that matter) will be lucky to receive the full amount towards year's end.
To speed up the process I have a sale order in the market (my cost: $6.95 to ''liberate'' over $25000) it has not being covered yet....
We are the suckers, retail is always last
CDJ

Q: I recently submitted a question asking what "sector" Costco and Disney were in "according to your sectors". You advised that Disney was Consumer Discretionary and Costco was Consumer Staples.
You do not have these sectors in your listings. You have Consumer Cyclicals and Consumer Non-Cyclicals. I am assuming it is one of these - could you please advise. I am aware that sectors have more than 1 description name but I am trying to keep to the sector names you have on your Summary List.
Thank you so much,
Margaret

Q: dear 5i
can you explain how you access preferblog.com ?
thank you
jacques

Q: Good morning
I own CPD which has trended downwards in price over the last year and is now yielding 6.9%. I am considering selling CPD for tax losses and if so, what would be a more sensible strategy. Buy back into CPD after the appropriate delay or Buy something else like a blue chip equity. I know the legal difference between preferred and common but it seems that over an extended buy and hold, commons will prevail albeit with dips along the way. In reality how often are preferred rights called into play to the detriment of common with Canadian blue chips? To me, preferreds offer the worst of both worlds. At this point, my CPD shares are part of my fixed income side and a switch to equities will rebalance things, I know.

Q: My bank is the Royal and, when I buy a GIC through Direct Investing, they list several institutions offering such fixed income at the rate those institutions currently offer. However, if I go directly into the website of these other institutions, I find the rates they offer are slightly higher than what is available through Direct Investing at the Royal. My question is this..... Is the Royal taking a "finders fee" or "management fee" when I purchase a GIC from another institution through their Direct Investing? I hope I have described this situation in a clear manner for your consideration. When I get my annual year-end tax reports from the Royal, they do list an obscure "management fee" against my GIC portfolio. Thanks!

Q: I will probably be purchasing ZIN shortly. Regarding the quarterly dividend, does it matter when I buy ZIN? I know the Ex div date is Dec 27, so I need to buy it before that, so it settles prior to or on Dec 26. And theoretically in an efficient market, the price of ZIN will drop the amount of the dividend ($0.13) on that date. What's your experience...does the ETF share price drop actually resemble the dividend amount?

Thanks...Steve