Investment Q&A

Q: Today in a question from John he asked about spreadsheets, I too was looking but in fact Action Direct can provide the info he is looking for. Under the My Portfolio tab, click on Analyze and Rebalance, in there you can create a group of all your accounts. Once you have a Group, sector weightings and position size is one click of the mouse. I wouldnt waste my time or yours with this submission except for the fact this knowledge has been a bit of a game changer managing my portfolio - keeping sector weights and position size in line.

Q: Suggestion about dividend payment history. I use the charts of online brokers as far back as they go and in the events i put dividends. Put the cursor on the bubbles and I see the changes. The records go back 10 years +.

Q: Greetings:
In one of your recent answers you stated that a particular company had a p/e of 33 and expected growth of 25%. In order to stay even, if investors pay 33x don't you need growth of the same multiple. Please explain.

Thanks,
BEN.

Q: I am interested in zwe for the European exposure and the high dividend. However I don’t understand what a covered call etf is or how it works. Can you
explain the mechanics in layman’s terms.

Thanks

Q: During market drops/volatility like what has happened the last couple of days is it a good approach to buy some small cap to make quick gains when the markets recover? Your advice is much appreciated. Thanks. Shyam

Q: Hello Peter,

I just read your article entitled "Five Signs That This Market Party Might Be Winding Down" in the February 2, 2018 issue of the Financial Post.

In this article, you advise that, "Like any good party, there does come an appropriate time to leave." Specifically, you say that if the economic climate changes to a situation with increasing inflation and slower growth, "this would be a sure sign to get out of the market for a period of time."

I have only been a member of 5i Research for a few months, but I have extensively read through your answers to all questions, the blogs, etc., on the website. You consistently advise members that market timing usually doesn't work. This article seems to contradict one of your key tenets of successful long term investing. Has your philosophy changed, or am I misunderstanding something?

Thanks.

Brad

Q: I have been administering a 7 figure + portfolio for a good friend. At Christmas he asked me to liquidate $1M as he was feeling nervous. Given the events of last week it may have been a prescient call! In any case I am charged with finding a good short term home for the money and thus have been delving deeper into the fixed income world. There I have encountered "Bankers Acceptances." May I have your views?

Kim

Q: What is your feelings about using an inverse ETF such as the above to protect a portfolio against North American interest rate increase over the next year?

Q: Hi Team, I realize that dividends are an important part of any portfolio and I know that 5I regards "Drips" very highly and I agree. Since I have no recollection of the investment world with high interest rate, how is "Dripping" affected in a rising rate market in the long run? Especially the utilities and the Bond Proxies.In the past how have names like TRP, FTS, EME performed. The higher yielding names in my portfolio in the utilities space are T and AQN. Should I keep dripping them? I am not worried about the other sectors stocks with dividends just the utilities.Thank-you in advance! Sam

Q: Greetings Peter and Team:
As i understand it real return bonds have three parts ( ie ) an issue price
a stated interest rate and an inflation factor which applies to the last
two. If they are purchased or sold before maturity the loss in the
value of the principal could exceed the inflation gain if interest rises
very much. Hank Cunningham thinks they are dangerous instruments.
Is my understanding correct? They are also very thinly traded at present,
which may change as rates rise. I am interested in USA Tips. Could you
please advise if they are much the same or can be redeemed before
maturity at par because they are treasury bills, or are they essentially
bonds like real return bonds? Also are TIPS readily available or are spreads wide? Please outline the traps with both but mostly TIPS.
Thanks,
BEN

Q: If I buy TD Bank shares in the US (NYSE) and place them in the TD Waterhouse US account. Do I pay the .15% non-resident tax on dividends? Also, when I sell the shares are their currency exchanges between US and Canadian for Tax purposes?

Q: On a business new channel I heard a comment about Utilities NOT being as "safe" an investment as we are generally lead to believe. I didn't quite catch if "safe" was referring to the stock price or the under laying business. You would think the safety of the under laying business would be based on expansion and price they can charge for their product. In terms of the proverbial "Utilities are safe defensive plays" would the stock brokers be referring to share price or the business model?

Q: Using BCE as an example, can you explain how to use technical analysis, moving averages and bottoms to add/start a position?
I am retired and want to add to my BCE position, but would like to at least give myself an educated guess on when to buy.

Q: Dividend history web site: On Jan. 30, Peter asked: "I'm interested in reviewing the dividend history of Canadian pipelines, utilities, reits and other income stocks over the long run, namely through recessions and interest rate movements (the tagged companies are representative). I'm trying to determine if the dividends remain fairly stable or tend to fall under these circumstances....."
This site is quite reliable, current and accurate: www.dividendhistory.org

Q: I was wondering whether your service has anyone that uses technical analysis or whether you only go by fundamental analysis? It seems that technical analysis would have shown a definite red flag with ECN on the chart months back when the stock had a very big reversal candle in early November. Perhaps you could consider bringing on someone with TA expertise to help with stock selection and opinions.

Q: Dividendhistory.org provides a long term history. For example, the history for AW.un goes back to 2005.

Q: When an American equity mutual fund can be purchased in 2 versions namely in Canadian dollars or in US dollars ,is there any advantage to purchase it in US dollars? If so what are the advantages?

In a global equity fund it must involved different currency. Thus is it preferable to buy a fund which trade in Canadian currency or if the one trading in US currency.

Q: Do you like Real Return Bonds today...how will they react in a rising rate environment and do they offer good protection if stocks fall? Thanks as always.

Q: Hi,
A few days ago I read a question/comment from a member about trying to buy U.S. treasury bills at TD and was told No, he could not. I called TD today on another matter and also asked if I could buy U.S. treasury bills in any of my 3 U.S. accounts (Cash, RRSP, TFSA). I was similarly told No, TD does not offer them. She could not provide a reason and said they only offer Canadian treasury bills. Seems odd.
dave

Q: Hello 5i.
I would like to ask about Portfolio Management as an Individual Investor.
This year I was going to implement an action plan that would engage selling at the point of stock chart breakdown......to help avoid 40% losses like Cineplex handed me in 2017/2018.

The Portfolio has been set up to be well diversified with 5i holdings and a host of other Canadian investments through all sectors.
It feels quite silly to just sit and watch individual names break up trends, breach 50 day and 100 day moving averages and continue to decline in price........taking down the Portfolio value each day.

Some of the names have been spoken about as lifetime holds but seem to be getting hit quite hard as some group of investors have decided to exit their positions.

With the cost of only 9.95 to enable a small investor to get out of the way, what is it about investing that sees recommendations implying Hold these names for the longterm?
(BAM.A, BIP.UN, FTS, PPL, IPL, ENB, BCE, PSK)
Watching 2017 gains slip away hardly makes sense to me.

What is 5i perspective on dealing with markets that seem to be taking away gains thru declining stock prices? How and When does an investor decide getting out is the right action (before I get to the point of maximum pain and then sell)?

I have had a few stocks go to zero. Clearly I can not determine the difference between a short term blip and a developing permanent loss.

Thanks for you insights
Dave