Investment Q&A

Q: Hi Peter & Team,
Happy new year!!
I want currency exchange currency from CAD to US to invist in the US market. I came across Knightsbridge FX an online currency exchange platform that provide better exchange rates. I wounder if you came across this company in the past, do you thing it will be safe to use them to exchange a large some of money?
Thanks,

Q: Hi
I often see on the SEDAR website the title Company A (formerly Company B) where company B is totally unrelated to company A. Would this be a form of cost savings for company A by taking over/changing a name or a red flag for me?
Thank you
J

Q: Morning good 5i people,

My question is on calculating capital gains. I have the same stock in both a non-registered (cash) account and an RRSP, bought at different times and at different prices. To calculate the adjusted cost base for when I sell the stock from the cash account, am I supposed to use the average of the 2 acquisition prices, or just the price from the cash side? In other words, do I use the purchase price of the RRSP stock in the calculation of the ACB?
Thanks,
Mike

Q: I purchased 300 shares of ENB.PR.V on TSX @$21.25 but Itrade charged me $29.24 USD, on inquiring with them, they told me this PR would only be purchased in USD. I understand dividend is paid in USD . How could I tell when I purchased them (for future) since quotation was in Canadian dollars? Lots of Canadian companies pay a dividend in USD
Thank you
Cec

Q: Hi team,

There is no urgency to this as it is just a question on portfolio weightings given Berkshire’s AAPL holdings. With the AAPL warning last week, Warren Buffett lost $3.8 billion (on paper), as AAPL is 21% of his holdings. Other major weightings are BAC and WFC at about 11% each and KO at 10%. Four stocks make up over 50% of his portfolio, a very concentrated bet. The downside as seen is that one wrong turn can drive big losses.

I don’t follow your portfolios all that closely as I have a U.S. focus, although I do hold several of your stocks. I believe your portfolios each hold 20-25 stocks, at 4 to 5% weighting each, which makes sense for diversification purposes and to avoid big losses on one stock.

Given these two different perspectives, and with Buffett viewed as the greatest investor of all-time, how has he done so well over the past 50 years with such a concentrated portfolio?

Your views are appreciated.
Dave

Q: Hello 5i,
Further to Ken's comment about transferring "In Kind" from an RRSP to TFSA: my wife and I have just completed this process for the second year in a row. We select holdings that we have had to buy in our RRSP's even though they should have gone into a TFSA in the first place - think SIS and VET for example.
The process involves the transfer of the shares first into a margin (non-registered trading) account and then into the TFSA. The Fair Market Value may or may not reflect the current stock quote.
There is definitely withholding tax which is on a sliding scale depending upon the size of the transfer. (We both had a wee bit of extra room, so our withdrawal - contribution was larger than the $6,000.) Also, the withholding tax will be required to be paid as cash, so it is important to have enough cash available in the RRSP account to cover it. If there is not enough cash in your Canadian RRSP side, you will have to either sell something or transfer cash from your U.S. side if you cash available there. It is something that needs to be accounted for in the decision to proceed.
We feel that taking the tax hit now (both retired and under 70) will benefit us in the long run (however long that might be....). We had a long time of benefiting from RRSP's and now it is time to further enhance the TFSA side and reduce the impending limitations that will come with age.
Hope this is of some help to Ken and perhaps others.
All the best for a New Year to all!!
Cheers,
Mike

Q: Are gic's inside brokerage accounts at banks protected from the "bail in " legislation or are they fair game just like regular deposits.

Q: Regarding your answer to Paul's question on Jan. 04 on stop loss orders.
Ref.: "From what I recall one of the reasons 5i Research does not like to put stop losses in place is to avoid being stopped out in "flash crash" events...." You stated: "Stop limits are better" Did you mean trailing stops? Please clarify, and why you prefer these. Thank you.

Q: From what I recall one of the reasons 5i Research does not like to put stop losses in place is to avoid being stopped out in "flash crash" events.

How frequent are "flash crash" events? There is the May 2010 flash crash, but that was 8 years ago. Can you tell me when all the market flash crashes occurred in each of the last 5 years?

If "flash crash" events are rare then is it really worth the risk of not having stop losses in place?

Many stocks in the balanced and growth portfolios are down substantially from their peaks (e.g. NFI, TCL.A, KXS, MX, PBH, TSGI, SIS, MG...), so if trailing stops of 20% were in place they could have been sold by now. I know, "don't sell a stock just because it's down", but with some of these former winners now down 30% to 50%, it seems that stop losses could have helped limit the losses or preserved some of the gains.

Q: Hi peter and team!
Please give me advice from which websites you most like to read the news about Canadian and American companies and stocks?
Which are the most reliable and quickest to inform? What sites brokers are looking in the morning as soon as they get to work?
Thank you!

Q: I am a new member to 5I Research.
Can you please review the beneficial tax implications of receiving dividends from Canadian companies vs companies outside of Canada?

With this in mind, what would be 10 top dividend paying Canadian companies you would recommend for a tax efficient retirement income?

Thanks and I look forward to your reply.

Q: BMO has new issues ie. Bank of Montreal U.S. Equity (CAD Hedged) Callable Income Principal At Risk Notes, Series 789 (CAD). Is there a simple description of these auto callable shares. Are they risk protected? How? It seems that these may be “ timely” given the market meltdown and not necessarily very investable. I found these while researching fixed income.

Q: I am in the process of trying to compare my historical investment performance to that of the indexes (total return statistics, including dividends). I am finding it difficult to obtain statistical data (not charts) of the total return performance for various indexes. Can you suggest a reliable source please.

Thank you again for all of your excellent advice over 2018! Best wishes for a very Happy New Year!

Q: Regarding Bob's question on moving stocks in kind from an RRSP to a TFSA , there would be a tax implication when the stocks come out of the RRSP would there not?

Q: Peter,

I am confused. The major banks have a year end of October 31st. I can go to Morningstar and the financial statements are already posted. Are these tentative numbers? It would take a lot longer than two months to have final numbers Taxes are not even due until 180 days after year end. As a general rule, how many months after corporate year end do companies release their final financial statements?

Happy New Year and many thanks for all the work this year !

Paul

Q: In addition to your response to James about parking money for a short term with absolutely no risk, I would suggest EQBank and Achieva Financial. The latter is particularly good as the daily savings rate is 2.4% and all money (no limit) is insured by the province of Manitoba. EQ's rate is currently 2.3% but insurance is CDIC and capped at $100,000.

Q: I am curious about stocks such as Shop which are listed on Canadian and US exchanges.
I have noticed that the actual dollar value per share is almost identical( when I do a currency rate check) even though the trading exchanges are different. Is this happenstance or is there a mechanism that does this.
This is probably a freshman question but I thank you for your work.
Peter

Q: Hi 5i team,
With the maximum pessimism prevailing in the market, it is the ideal time to invest now at the beaten down price. My question is how an average Joe with limited resources can take advantage of this stock sale. Unless one had sold all holdings to raise cash prior to the big drop, now is too late to cash in and bet the stock market to drop further. So what will you do without going into debt to raise cash to buy? What steps would be advisable?
Let’s take the Growth and Balance portfolios, and let’s ignore the tax consequences and tax loss selling. If I hold most of these two portfolios, should I sell those names that drop the least and buy those that drop the most? Should I sell those that drop the most? Should I sell those that are unlikely to advance in the next half year, and buy the stocks that will most likely have a big rebound? Which are the candidates from the two portfolios that will fit the last approach for sell and for buy? Thanks and merry Xmas to your team.

Q: I have $300,000.00 saved to go toward a house purchase. Where is a safe place to park it?

Q: You may be aware of this already, but recently the Globeinvestorgold website was folded into the main Globe Investor website, and a lot of functionality has been lost (as far as I can tell). For instance, I used to be able to search headlines based on text such as "normal course issuer bid" to see what companies are doing buybacks, or I was able to do very specific searches of companies based on industry, size, and financial metrics (ie: all oil & gas services companies trading on TSXv with market caps under $100 Million). Both of these functions, and I suspect more, are now gone. Do you know of any websites or platforms that provide similar functionality ? Since I was (and unfortunately, still am) paying for the Globe & Mail services, I am open to a monthly subscription type services. Thanks.