Investment Q&A

Q: Please provide a rundown of the pros and cons of holding a USD stock i.e. Costco (COST) or Apple (AAPL) in a TFSA.

Q: I have a friend who wants to start investing at a regular frequency (every weeks or months) to avoid bad trading decisions but he is a bit reluctant to start investing in the S&P 500 since it is almost at all time high.

What are your advices in this case?

Q: Everyone, I have owned LSPD since 2019 and bought and sold shares in 2023. Recently, Recently I sold the last of my shares. My philosophy is to but the best of the best and hold for a long time. For me buying is a long process of researching and waiting to make sure it conforms to my requirements. Why is it hard to sell stocks that you have believed in yet performed differently? Clayton

Q: 5i you don't have to post this publicly as I don't want to offend anyone or shame people from asking questions. For the first 8mos after LMN was spun out from CSU investors could have bought Lumine for under $21. Now that it's over $30; apparently, it's too late?

CSU went from $20 to $3500 in 15yrs but buying LMN.v at $30 is paying too much. I'm not saying LMN will follow the same trajectory but investors familiar with the CSU story would love to be able to go back in time to buy CSU at $30.

Q: Could you please remind me what size market cap refers to small, mid and large cap companies? Are the numbers different between Canada and U.S.?
Thank you

Q: Seems to me finding stocks to create personal wealth over the long term is not that hard if a bit of effort is put into it, could be said all you need is common sense perhaps. Also seems to me the most common mistake for small diy'ers would be portfolio management, the buying and selling mostly, tax planning perhaps to a much lesser degree. 5i has provided many many good ideas as a long term member over the years, a few loosers too - dont want your head to swell too much. 5i deserves much credit to my success, thank you very much. Your investing ideas have provided several opportunities, I feel it's the portfolio managment skills you've taught me that was more important to create wealth. All that being said, could you expand on this remark you posted today, "we tend to leave some (minor) room to add if opportunities present themselves in the future" ?

Q: Under Investment Q & A, as an example, Target price history - PYPL, current high target price $118.00, the deviation (line with dots) recent 13.9 -- can you explain what this indicates.

I am a long term member and I am noticing the below more than in the past:

A lot of questions have "take as many credits as needed". For instance, the longer the question the more credits are required or the more research done the more credits required, or the more companies asked about the more credits required? Please advise.

Thank you
Appreciate the years of good service.

Q: Peter; Re Lin’s question on his sons FHSA at TD- my granddaughter also has her FHSA at TD - I advised her to buy an ETF instead of the TD MF - but TD wont allow it- or individual stocks, Very restrictive - and ANTI TRADE ! Haha.
Rod

Q: Fellow 5i members: i'm interested in reading about your best allocation of capital (other than stock purchases) which has created value in your life beyond your investment account. After all, bettering our life quality is why we began investing in the first place. I've just created a thread under Forums..Non-investment topics. I titled it 'Best Spending ideas 2024'. I believe that our large community of prosperous and like-minded people has alot of good ideas to share. I've shared a few of my best allocations of capital in the thread. I invite you to spend a few minutes sharing and lets get the conversation started so we can learn from one another.

Q: Dear Peter

1) is there a CDIC insurance limit of US$ 100K for US denominated accounts, or is it CAD$ 100K for US denominated accounts?
2) we have US$ and CAD$ denominated TFSAs with account numbers having the same first 6 alphanumerics and the last alphanumeric being different. For CDIC cover, would these US$ and CAD$ TSFA's count as one account or two accounts?
3) We bank at one of the largest banks in Canada and we have two investment accounts which are 5 times bigger than CDIC insurance cover. We wonder what other investors do in such situations -- do they open more investment accounts at other institutions in order to get the CDIC cover? Do they just stay with their current broker to keep their investment tracking simpler?

We'd appreciate your comments on: a) options and, b) what most investors try to do, if anything.

Happy New Year. Many thanks for your usual sound advice.
Hi again Peter - re my earlier questions about CDIC insurance, i have found out that usd is a covered currency, in fact the CDIC website says foreign currency which captures a lot. I've asked TD whether our non-registered USD and CAD accounts are insured separately for $100k each or are insured as 1 account - still waiting. And re the ability to better CDIC insurance with more accounts for our fixed income, i'm still interested to know of any innovative approaches you may have seen. Many thanks.

Q: With all the continued unrest and conflict is there any compelling investment case for military or armament stocks?
Thank you

Q: if you had a considerable amount of cash to invest now, would you invest it all or would you take a staggered approach considering the run up we have just had? if staggered, over how many months would you invest it?
thanks and happy new year

Q: I previously asked you about the rule of 40 for SaaS companies here:
https://www.5iresearch.ca/questions/text/rule+of+40#answer163822. Could you explain further why this model doesn't seem to work for companies in other industries?

For example, ATD has a low single digit free cash flow margin and would not meet the rule of 40 threshold, but it has proven to be a consistently good investment over the years despite that fact. Why doesn't its poor profitability hold it back and what other criteria would you consider important in lieu of the rule of 40 that help you identify it as a good investment?

Q: Hi
I know that this question is almost impossible to answer and it is anyone's guess but what is the end game for this mounting debt in the US? 34 trillion? Perhaps 10 trillion of that is domestic? Still a stagering number. GDP is 26.24 Trillion with that volume it sounds manageable but they and other goverments dither about, eventually kicking the can down the road. At what point does this come to a head in your opinion? Perhaps a year or an event that you see as an epoch?
Thank you
J

Q: This is a general market question. I hold too many companies in my equity accounts and would like to reduce the number. On the other hand, my overall portfolio is up more than 11% over he past 3 months. I am overweight financials but I see them as benefitting from potential rate drop. Most of my holdings are growth oriented. I do hold approximately 15% fixed income, short and longer term bonds.

What would be your overall approach given potential rate drop and anticipated slow economic growth? 90% of my holdings are for long term. 10% are trades.

Take as many credits as required.

Thanks for all your help.

Mike

Q: Good Morning 5i Team,

1. Is the capital gains tax the same on CDN and US stocks in a cash account?
2. Does one pay more tax selling US stocks with no dividends in an RSP or cash account?
3. Are the dividends from preferred shares eligible for a tax credit? Or does it depend on the offer?

Delete question credits as required.

Thank you and keep up the great work.

Q: Hi Guys,

My question is revolving around an article or a webinar that you've done or planned to do on the 2024 outlook. Best categories, interest rate outlook etc etc.

If you've done such please send me the link. If you haven't do you plan to do something like this?

Sheldon

Q: Happy New Year everyone!

Can you please update us on your outlook for US Small Caps in 2024? Is it better to invest in US or Canada? A few selected stocks or ETF? If ETF what’s best for top return?

Sorry for all the questions please take as many credits as necessary.

Thanks happy investing!

Q: I am concerned about the US political situation. Should Trump manage to win the upcoming election and the US loses its democracy, I fear that this will not be good for the financial markets. Do you know what the results were in other countries that elected far right political parties? I have a sizable portfolio that is almost 50% weighted to the US. I would like to know how to prepare for this possibility short of selling all our US investments. Thank you

Q: I would appreciate a sampling of hedges for the NASDAQ 100 & S&P 500 please.