Investment Q&A

Q: The VectorVest Smart Investor is a company which claims to have beat the S&P handily for the last 30 years. I am skeptical.

Can you comment?

Q: Hi Team:
I enjoy reviewing the portfolio analysis. Of course there are always concerns with data interpretation. I am slightly over weighted in DS (5.5%) and FFN ( only 1.8%), 2 companies that I now understand pay some of their dividends with 'Return of Capital'. Returns to date are; DS in RIF (-16%) + TFSA's (-13%, -19%) + RESP (-12%). FFN is in TFSA's (-29%, -30%) + RESP (-30%). Overall now big losers but still paying dividends (DS yield @ 10.15%; FFN yield @ 18.99%) except at the rock bottom time frame of December 2018. So, I want to sell. When do you suggest I take the hit? Do I sell all at the same time? Do I keep some portions? Of course some magical suggestions to make up the loss, especially in the RESP. Overall I am still at a positives in all accounts, so I have not made all bad choices but these are dragging me down and I am tired of seeing the red return. Thanks Ken ..... :-)

Q: My pots of money are: 10% resp,10% tfsa, 40% rsp, 40% unregistered
If I want a 30-30-30-10 split of CAD, USA, International and Emerging markets what should go where for best tax efficiency? My pots dont fit the recommended tax efficient locations for my investments perfectly ( growth in TFSA, USA div in RSP, cad div in unreg) so am considering:

TFSA is growth so I think any IWO or VEE would go here...I am a bit short to fit all my VEE and IWO in the TFSA so part needs to go somewhere else. ( likely RSP?)
My Unregistered accounts hold all my cad stocks ( mostly your balanced portfolio)
which leaves spy, vig, ve and xef in RSP. ( plus any excess of my iwo and vee growth)
what should go in the RESP( similar to TFSA or RSP?)?

Any suggested switches to where I plan to hold the above investments?

Q: Hi 5i team, is there any rules to buy and sell stocks that trade at daily volume of 500 shares such as BCI if one wants to set the amount at 50000.

Q: Hello,

With regard to PNN, you mentioned that a retail investor could build its own. Can you please elaborate on how to do it (example if possible). Would a 5 year maturity long enough ? Thank you

Q: Looking to add some ETF's in my accounts - can you explain the difference between funds that are Hedged and those that are not Hedged. What would be better to buy at this time and are they more suitable for a TFSA or a non registered account.
thanks

Q: Norbert Gambit - FYI:

5i has good thread here (https://www.5iresearch.ca/forums/viewthread/328), but this link has good concise broker-specific how-to info here (https://www.dividendearner.com/dlr-norbert-gambit/) titled
'Convert CAD and USD for less than $20 with DLR'.

Hope it is helpful to members; I just used it.

Q: I have some cash that I want to park for 6 months or so with the ability to withdraw
some when needed. Can you recommend something?
Thank You
Peter

Q: I have $ 50,000 to invest I would like to invest in some preferred shares I do not need the funds anytime soon Could you give me some investing criteria to assess whether the pref shares are good value I know alot depends on interest rates but i want to buy companies that are solid

Thank you
Paul

Q: I have an elderly parent who owns shares purchased a long time ago. The company it appears still exists, although may have reorganized. How would I find out who holds the shares so that they could be sold. Would the company have a record? I have the notice of annual meeting from computershare but nothing on there about the holder of the shares. Thanks.

Q: BUYING PROTECTION: WHEN to buy? WHAT TO BUY?
From time to time (especially today on CNBC) I am hearing Traders talk about buying protection with volatility in the US at ~16 .... vs much higher last week.
I assume this advice is also linked to the fact that US markets have just finished a “best ever” kind of bounce after last weeks debacle.

Does 5i agree with that strategy?
Would you be inclined to do this automatically when VOL drops to a specific level? If so, what level?
What ETF(s) would you suggest since playing options is not my game?
Would there be a rule of thumb as to how long to hold that “protection” in place?

Thanks for helping to educate me in this area.

Q: On June 10 you answered a question on portfolio weights,saying that you would generally consider a good portfolio as having 25 stocks, making 4 percent a full position. How would etf’s figure into this scenario? I know that you have often said that one should have at least a 5percent position in an etf. Is that suggestion for a portfolio of 25 stocks?
Thanks again for the excellent site

Q: When viewing bid & ask lots under quote details for a particular stock: how many shares equal a "lot"?

Q: How do companies decide on which exchange to list their company?

I see many questions on 5i specifically regarding Canadian companies listed only on the Canadian exchanges (eg. LSPD) sometimes both Canada and the US (like SHOP), or possibly only on the US market (LULU). And recently SDX going off to England, I believe.

Many of those questions relate to portfolio re-balancing thanks to PA.

So, all of this leads me to wonder what goes into deciding where to list a new company.

What would a “checklist” look like for making this decision? (Canada vs USA vs both).
As a general rule and given the size of the American market wouldn’t they be better off listing right from the get-go on the NASDAQ?

Thanks for the “lesson”.

Q: I often read mentions of "full position" or "half position" here. What is a "full position" in a stock? Pardon me for a naive question.

Thanks.

Q: Has insider selling increased since the runup in price for Shopify? If so, is this a concern?

Q: What is your view of structured products such as PaRs and PPNs? I had thought you had previously commented on these products but cannot locate. These products appear to be designed by the financial industry for selling rather than real investor needs.

Q: I have a philosophical question on bond allocations in a portfolio. Simply put, why would anyone put money in bonds or bond funds in the current interest rate environment. A high bond allocation made sense in the 70's and 80's but for the last many years the returns have been very small. I realize that the bonds won't fall in a recession, but is that worth the high lost opportunity cost compared to say, holding banks or utilities. What bothers me is the almost universal acceptance by advisors that a bond allocation is mandatory. As a nerdy engineer I get suspicious when ideas are presented as fact with minimal apparent logic. I can see why bonds are somewhat attractive to advisors as the low volatility keeps clients less "edgy" but is it really the best long term strategy under the current conditions. I am in the fortunate position that I do not need to make large withdrawals and I can usually plan ahead. Why would I need bonds?

Q: Hi guys

Most ETFs I kind of understand what they are using to mimic an index, and to create the holding. With this ETF trading off the VIX wondering how they do this? What do you think of this as a short term holding. It just seems the VIX should have much more noise, given Trump, uncertainy, and trade issues, yet you wouldnt know it. Your thoughts?

Thanks
Stuart

Q: I have a general question but I will use SIS to help me as an example. I am trying to learn how to find out what a company's Debt is. I want to be able to calculate the ratio of Debt to Cash Flow. I can find Cash Flow right from the TD Direct Investing website, but how can I find "Debt" to plug into the ratio? Many thanks. Marilyn