Investment Q&A

Q: I continue to try and learn by reading reports, analyst ratings etc. Tudor Pickering has recently released ratings for MX as a hold and price target of $59, currently at $79 and change, and TRP as a buy with a Price target of $62 currently $60.79. This does not make any sense to me. Why hold a stock they estimate will loose $20, and buy a stock that will gain only $1.21.
Please explain if possible, am i missing something?

Q: Any reason for the lack of performance in the Growth port? Canadian small caps have not done well in the last 5-6 years, the Venture exchange has been dropping for 10 years now and is near historical lows. I know there are always a few gems but not enough to cover the all the looses. Is this going to be the new norm or is it just a part of a bigger cycle? I personally feel like to much money is getting poured into the marijuana sector and good quality value stocks are getting no attention. Any thoughts?

Q: I am considering purchase of one of the following 3, CTC, BNS, LB.

If one were to analyze the decision to purchase one of the 3 according to dividends only.

The question is spending 100 000 dollars to purchase any given one of the 3 today, along with the following assumptions, hold x 10 years, no dividend cuts and ongoing ANNUAL dividend growth at present rate (based on present dividend and last years' dividend growth)
CTC present dividend 1.038 dividend growth last year 13 %
BNS present dividend 0.87 and dividend growth last year 5.9%
LB present dividend 0.65 and dividend growth last year 4.2%

At the end of 10 years, WHAT WOULD MY DIVIDEND FOR EACH be in dollars ?

(I can't seem to get the math right and can't find a website calculator to help me.)

Your opinion about the PROS AND CONS of my approach to dividend investing would also be welcome.

Q: Please explain negative interest rates. Why would a bank or country pay someone to hold their money? How does this relate to countries purchasing their own debt? If the economy/markets are in good shape why would negative rates exist and why are they needed?

Q: Does the new digital subscription tax credit apply to our 5i newsletter fees?

Q: Hi 5i. To further transfer from Balanced to Income portfolio, please pick from my top gainers and % gain from which to reduce or sell outright in order from 1st to last or leave alone.
XHC75%, VUN60%, ATD.B35%, ZUH30%, XEF25%, VXC25%, IYT25%.
The proceeds will then be used to top up your income port. and global div. players on pullbacks or as required. Does this make sense? What % cash should I keep in reserve? Thanks

Q: Dear 5i..I am still struggling with the fixed income portion of my portfolio and I am ok with a low but stable, steady income stream (age 68) but I don't wish to see erosion of my capital..my question is-over a period of 15 to 20 years(or longer) as I begin the deaccumulation process do you see any significant difference between bonds and laddered GIC's knowing in fact that both options are yielding peanuts. I would appreciate your comments and alternate strategy...regards. gary

Q: Hi,
I have shares of Equinox Gold in my TFSA and a few months ago they separated their copper assets into a company called Solaris Copper Inc. There was no value assigned to the shares, I'm not sure if they are even a public company yet.
Regardless I assumed the shares will just sit there until a value is assigned and they could be traded publicly. Recently I received a letter from iTRADE informing me that the shares of Solaris are a non qualified security and all income earned and all capital gains derived from the non-qualified investment will be reported to Canada Revenue Agency on a T3RET trust return . Any tax payable on this amount will be levied directly against the TSFA account.
Can you explain this to me? The shares have no value so I can't see that I am on the hook for any penalty. 50% of $0 is $0. Secondly I am angry at Equinox for putting me in this position.
Thanks,
Charlie

Q: I have read your recent ETF and Mutual Fund Update with great interest. The forecast growth numbers for the ETF industry are truly impressive. On the surface, ETFs would appear to be a magic bullet for individual investors who wish diversification at low cost.

Over my lifetime, I have seen a number of financial trends/theses, which start with very strong growth. However, after a period of time, these trends invariably collapse and end badly for the "buy and hold" investors. Do you see any possibility of this occurring for ETF investors? What risks do you see for (conservative, retired) investors who have a portfolio of ETFs as opposed to a basket of diversified, dividend aristocrats? Have you seen any analyses which look at the long-term impact of this trend (i.e. what will happen in the markets if most people buy ETFs and not individual stocks? What risks does this trend pose to individual investors?). Thank-you for your insightful advice.

Q: Lots of press this morning on calls for a much weaker CAD going forward - some forecasting into the low 60's. In the case of prolonged weakness would it be safe to assume that Canadian companies that generate most of their income from foreign operations are "hedged" (companies like MG and BIP.UN for example). In other words - as CAD weakens their CAD translated income and cashflow increases which should lead to higher share prices on the TSX.
Thanks

Q: For the question on what to buy a child that will get them interested in stocks.

I was introduced to stocks at an early age (mom worked in the bond market). Some of the best stocks i was introduced were:

Macdonald's, Coke, Nike, Apple.

If you can link to something they see everyday it has more meaning (at least it did from my perspective).

Cheers

Q: A member asked who was trading PHO at the end of trading on Friday. In your reply, you observed that TD and Anonymous were, respectively, a major buyer and seller. This same sort of topic pops up on stock discussion boards. My question is: what do traders/investors who seek this sort of information get out of it? What possible significance can there be to which brokers are on one or the other side of a trade?

Q: In view of significant price changes in the last half hour of trading should I as a small lot retail investor avoid trading during this period? Thank you

Q: Could you recommend three recession proof sectors and three stocks in each of those sectors in both the US and Canada. Thanks

Q: Big volumes on many stocks today.
Big volume trades on opening & close. (market makers?)
Is it funds fixing their holdings re changes to index last week?
Several blue chips had volumes over 10 million today.
It is a Friday and the 15th, does that have any significance?
Your expert opinion please.

Q: Hi 5i, I need some guidance, I need to sell some of my stocks.
In my cash account I have 25 stocks , 15 of them are doing OK (some are doing great), and around 10 are in the red (with 3 or 4 bad -at least temporarily ) , the question is, would you sell the top ones, would you shave off some from the top stocks, would you sell the ones that are not doing so well. I understand your respond would be a suggestion only. I'm inclined to shave from my top gainers and sell the bottom ones.
Thanks

Q: Hello, 5i's sector classification for NFI is Industrials. However, when I look at either the TSX classification or the Company profile (5i Research) or Yahoo Finance, etc., all of these put NFI as Consumer Cyclical. I understand it could be difficult to classify, in that case would you advise to defer to the TSX classification? Thanks, Gervais

Q: Acronyms and anything else that is not clear, a quick search of Google usually solves the wondering. I am amazed at how much I don't know about the business of the market and navigating it. A useful site for other newbies is
https://www.stocktrader.com/free-education/
Thanks 5I and other helpful people.
Peter

Q: Could I suggest questioners avoid (or explain) unusual acronyms if possible? When I read the recent question about CSU I thought it odd that the chief operating officer would suffer from Anti Social Personality Disorder!!
Thanks for your very valuable advice.
Chris
PS It took me a while to discover that ASPD really stands for Automatic Share Purchase and Disposition agreement.

Q: In regards to the member looking for USD stocks and preferred shares. CIBC publishes a report on Canadian prefs each quarter(I've linked one for example page 27). The only issuers are Altagas and Enbridge

https://www.cibcwg.com/c/document_library/get_file?uuid=56632e8f-3032-4033-9dbb-38354e4253a9&groupId=82580&version=1.0