Investment Q&A

Q: Peter, please:
I have a portfolio of dividend paying stocks (50% cdn, 25% us, 25% Int'l, built steadily over nearly 30yrs of middle and now upper middle class paychecks, using synthetic drips for the last half of that time up to now. I had always planned to keep dripping until my company pension kicks in. I will be eligible for an excellent full company pension in 5-6yrs. I could theoretically quit my extremely stressful job now but have been determined all along to hang in, currently for the last 5-6yrs now left. I have a situation now where I am finding my tax burden extremely onerous to say the least. I'm digging deep into my line of credit each april to pay revcan. In my situation would you remove the drip program that I have established. I'm extremely reluctant to do so since dripping has contributed in a big way to my success over the years, because it has forced me to utilize my regular paycheck to pay revcan and buy stocks while additional shares accumulate thru drips. However, gradually, and most notably this year the tax bite has become very nearly unmanageable even with my line of credit to access to pay revcan. Your valued thoughts please. Would you remove the drips and use dividend cash along with paycheques to help pay taxes from here on out. I have an accountant and I've been told there is nothing further to be done to lessen the tax bite due to my salary and dividends. //Also, at what point would you endorse walking away from a pension and taking a one time payout instead, and living off dividends . The point of my starting investing years ago was to become financially independent. Fast forward a few decades later, my portfolio looks incredible on paper but I'm stressed each tax season over finding funds to pay tax and also unsure if quitting my job would lessen my tax bite (I realize earned income is treated differently than investment income) along with my stress level. If I had to do things over I would have invested in cdn div stocks to the point where one pays no tax, and walked away from work years ago.

Q: png has been halted for several days for not filing financial documents as required... assuming they file sometime soon, do you consider this action as detrimental to future trading??
edward in montreal

Q: Good morning, my question is about the rating system.
I was screening for companies that had an "A" rating.
When is scrolled down I noticed that most "A" rated companies had reports that were 2-3 years old, Is an "A" rating still relevant today if the report was written a few years ago? Thanks , Rick

Q: In regards to share buy backs, do you companies employ someone to watch the daily price and take advantage of dips, maybe even help support the stock price in a slide, or is it more systematic?

Q: Where would be a good place to park cash for the short and medium term?

Q: I was watching James Hodgins on Market Call last week and he mentioned that he is "restricted on the name and cant talk about it too much". What can be possible reasons for this? Thank you.

Q: ENW has been doing well, but ENW.WT has been doing much better. Two questions: what rights does a warrant give the owner? And why is the warrant doing so much better than the common stock? Thank you.

Walter

Q: My husband and I are basically retired (I still am working a couple of days a week as I enjoy it) so our income is now from CPP, his OAS, and investments.

I have been reading about pensionizing income after retirement, especially if a person doesn't have a corporate pension. The literature talks about annuities. With low interest rates they are more expensive then if interest rates are higher but regardless they would provide guaranteed income, although not indexed. This provides some income security. What is your opinion on annuities? My husband is 68 and I am 63.

Q: I have a question about the tax treatment of Canadian stocks that are listed on the American exchange. I own a number of Canadian stocks listed in the TSX that pay Canadian dividends and allow me to apply dividend tax credit in my non-registered account. Ex. AQN, BNS, BIP.un
I'm considering exchanging some of these stocks to the American exchange so that I can collect dividends in US dollars.
Will the dividend tax credit remain in tact in the non-registered account?Would there be any tax with held impact if I made to same switch in my TFSA?

Q: Have some cash account money to invest right now, could you recommend some suitable options ? Need to be able to liquidate in event of house purchase/investment.

Q: Hey 5i,
I am a new investor and member of 5i. Upon review of your Reports and Portfolios I have decided that my portfolio will be a mix of Income and Growth. My question is as to the number of stocks to purchase to balance my Portfolio. If stock A is valued at $100 and Stock B is $25, should I purchase 4 of A ($400) and B ($100) , or 1 of A ($100) and 4 of B($100)?

Q: This is a strategy question that has to do with using margin debt. I am wondering what you think of buying on margin. Last year for the first time, I bought on margin, roughly from fifty to one hundred thousand at various times throughout the year. This is a small percentage of my portfolio and thus not too dangerous. In doing my taxes I see that I paid $2480 in interest. The government gave me back $1187 of that as carrying charges. That means there was $1280 left. I bought all high dividend paying stocks and so expect that I recuperated or surpassed that amount in dividends. Then I get the capital gains for nothing. ( Or, the capital loss, also.).

So, I suppose I am asking you whether it is worth the trouble? Especially when I have 20 or 30 percent fixed income. Perhaps I should use that if i want to try to leverage things a bit? I am thinking that it may be a good stragegy when one feels that stocks are really low. But, the rest of the time it is hard to make any money. But, i am more interested in your thoughts on the strategy.
thanks

Q: Your PA has recommended reducing my Tech holdings and increasing my US and International allocation. I would like to reduce Tech by about 1/3 and use those proceeds for purchasing VUN and XEF. VUN appears to have about a 20% tech component, so I would need to reduce more than the 1/3 of my current holdings to offset that VUN tech portion. Your recommendations on which equities I should trim/eliminate would be very helpful in trying to sort this out !! Many thanks, as always.

Current Tech % holdings in RSP/TFSA/ UnReg accounts are approx:
ENGH 2.5%
KXS 3.5 %
OTEX 3..5 %
SHOP 3.5%
SYZ 3.8%
PHO 1.3%
and in RIFs - for yield:
AB 3%
ET 1.8%

Q: I thought that other members would find this article about ride sharing in other jurisdictions interesting considering all the recent ridesharing IPOs.

https://www.nytimes.com/2019/05/05/technology/ride-sharing-future-electric-motorbikes.html

Q: What does yesterdays news release mean and how will it impact the share price from now until May 20th?
VALENS ANNOUNCES ACCELERATION OF WARRANT EXPIRY DATE

Q: This is not a question about this particular company but simply an example. The notice today on earnings for Carbonite stated:
Non-GAAP EPS were $.44 above estimates for $.36
Net EPS was $.06 missing forecasts by a nickle
It goes on to talk about actual and estimated sales both on an Non-GAAP and GAAP basis.
Can you explain what the difference is between the GAAP and Non-GAAP numbers? and how Non-GAAP earnings of .$44 turn into $ .06 when shown on a NET basis and for your DIY investors, which should we pay attention to?

Q: How would you screen for momentum stocks? What would be the criteria for getting in and out? I'm looking for info on how to make these trades for short and medium term. I'm ok with medium to high risk and will be working with 5% of my portfolio.
Please deduct as many credits as needed. Thanks.

Q: Hello,
what risks, if any, should an investor take into account when purchasing all their ETF's from the same provider? I am talking about the big guys here such as Vanguard or Blackrock. Since the ETF's are broad based there is no issue that I see with a fund manager making investment decision (are hot or cold) and these companies are large and profitable so I don't really see any risks other than general market performance. Am I missing something?

Thanks,

Dan

Q: Portfolio Analytics is recommending that I have 70% of my equities in US and international stocks. 5i has also often recommended that one should not hedge the currencies. Are you recommending that one should not hedge the currency because some ETFs charge extra for hedging, or do you anticipate that the Canadian dollar will continue to trend downwards for the forseeable future?

I am concerned that 70% foreign currency exposure is too much risk, especially given that the Canadian dollar is relatively low at the moment on a historical basis. Many ETFs, such as those offered by BMO, offer hedged and unhedged versions for the same MER. Would you recommend that I buy the hedged versions to decrease foreign currency exposure?

What is the maximum percentage of a portfolio which you would recommend involve foreign currency exposure? I am close to retirement, but will have a good pension and do not anticipate needing access to my investment funds in the forseeable future.

Thank you for this great service!
Dale

Q: Is this a good hedge to a long only portfolio?