Investment Q&A

Q: In general over the last little while when asked about favorite stocks in your portfolio you include SIS, TOY, PBH, CSU and GUD. I fortunately own all of them and have profited handsomely. Thank you very much! If you had to currently add a stock from each TSX sector which stocks would you pick? One caveat, please do not pick any of the 5 listed above! Thank you

Q: Hello;
I am trying to understand/develop bench marks for stock screeners. I need input regarding 3 popular criteria; Price/Book; Price/Free(?)Cash flow and Price/Sales.
1. Please confirm suggest hurdle rates; Price/Book < 3.0; Price to Free Cash Flow < 10; Price/Sales ??
2. Which Cdn sectors can use these bench marks. I understand cyclical commodities have great seasonality/cycles and the above are not suitable. Please confirm and suggest sectors.
3. Should it be Price/Cash Flow or Price/Free Cash flow?

Thanks

Q: Gentlemen,
Following on questions about cash parking. My recommandation will be look at EQ Bank , Alterna Bank & Implicity, all virtual banks.
BR

Q: I opened a self-directed RESP for my new born. Do you suggest starting with ETF's or specific stocks? If ETF's or stock, what do you suggest is a good starting investment and dollar amount for ETF or stock given that we have at least 18 years before needing the funds. If ETF's first at what point do we start investing in specific companies? I guess I'm also trying to get an idea of how to build my sons RESP portfolio.

Thanks.

Q: Hi,
I am new to your website and service but find it great so far. I have not seen any discussion of stop loss orders. I use them on occasion to protect profits and cut losses, but sometimes with misgivings. Sometimes they save me money from a deteriorating position that I might otherwise be ambivalent about selling. Sometimes I just get stopped out and have to buy back higher. I am always trimming and adding and hence may be viewed more of a trader than a long-term investor, but that is my style. C'est la vie! Anyway, do you use stop losses in your portfolio management or do they not fit your approach to the market?
thanks
dave

Q: Hello 5I.
I was interested in your reply to Adam re his question about Loblaws as a "forever" hold.
You reply stated that a "forever p/f" should have exposure to at least one hi-quality Co. in each sector.
Could you give us your thoughts on one (or two) potential "forever" Cdn companies in each sector.
Much appreciated, thanks.

Q: I am about to start converting the cash in my sons (he is 21) TFSA and RRSP. He has $1,050 in each account right now and is in his budget to add another $4,000 to $5,000 in 2018. Should I start him with companies like PBH, SIS, ZCL? or should he start with an ETF or two for immediate diversification? Whatever he buys will be long-term holds (unless they are in the model portfolios in which case I will either hold/sell/buy as directed by 5i when you adjust the portfolios) but I would like to see his accounts growing steadily as well and help him get excited about investing. Any suggestions would be helpful.
Thank you as always for the great service and information.

Paul

Q: David Driscoll was on BNN Market Call early last week, and while killing surplus time at the end of the show he underscored the importance of eliminating correlation risk in a portfolio (also mentioned in his point #6 here: http://www.bnn.ca/david-driscoll-s-top-picks-august-21-2017-1.835439 ). If I understood him correctly, this would mean not holding significant positions in multiple stocks within similar industries or with overlapping product/service offerings, presumably so that if one industry got hit, it wouldn't pummel two or more stocks at once and do damage to the portfolio as a whole.

Is this the thinking behind you not holding CSU and OTEX simultaneously in any of your model portfolios? Are there any [other] noteworthy correlations of this sort between any of the other stocks you cover and routinely recommend?

Q: I currently have a little over $250,000 in cash which I want to park in a "no risk" account.
One of the big banks has a deposit rate of 1.15 for $250K and 1.05 for less than $250K. My first question: Is this my best option or can you recommend something else? My second question: should I be concern with the CDIC Deposit Insurance limit of $100K and spread the deposit over 3 banks?

Q: In considering Vanguard and BMO ETFs for possible investment, my question is about the choices between CDN-hedged and, I guess, "non-hedged" variants of US and foreign ETFs. My impression is that the latter typically offer better returns. But does the risk of random currency exchange fluctation trump that advantage? Many thanks.

Q: The question of what to do when one is worried about the possibility of a sharp market correction often arises. In the past you have proposed increasing the portfolio allocation to cash. As a complement to that strategy, what about tilting the portfolio more toward low beta (less than 0.5, say) stocks? I’m thinking of stocks like L, ECI, CSH.UN, KBL, SJ, SLF. How much protection - qualitatively speaking -do you think that would provide against the possibility of a sharp correction of, say, 10-15%?

Q: Hi, Are there any companies out there that provide advisory services on stocks to short? It can be US based or Canada based advisor but i am interested in shorting US stocks. Can be a newsletter provider as well. I am mostly interested in shorting for hedging purposes either shorting stocks or shorting with options. Thanks

Q: Is there no summary for September 2017 - thank you- Hanna

Q: Hello Team,

I have a regular CDN TFSA, with $43,000 invested, and i have a portion of cash allotted to a USD TFSA with $15000 invested. Between the two i need to generate safely with minimal risk $300 dollars per month? Can you suggest some income producing strategies that could help me obtain my goal? please include some equities.

Are the US and the CDN TFSA'S treated the same for tax purposes, when withdrawing investment income? charge me as a two part question!

Thanks,
Stephen

Q: Hello. Good news this morning from Grande West receiving $40 million dollar order from a US company. Any idea why this company has not moved from the Venture Exchange to the TSX yet?

Q: This is further to the question asked by Maurice on Oct. 10
My brokerage (BMO) converts dividends from US $ to Can. $ for Canadian stocks that pay in US $. I have asked that the dividends not be converted thinking that the brokerage must be making money on the automatic conversion. Can I demand that they not convert the currency? If there any benefit in having them convert it?

Q: I am new to this website but really enjoy the Q&A. A lot of people seem to target 5% as a full position, or 20 stocks. Your portfolios target 20-25. Over the years, my target has been 12 -15 stocks, or 7-8% being a full position. No particular reason, other than willing to take a bit more risk and easier to manage a smaller portfolio. In any event, how big would you let a winning position grow before you started trimming back to your original full position? SHOP being the current example of a stock that really took off but is now falling back.
Thanks for your great insight.

Q: How do you recommend investors handle cash balances while they are waiting for a compelling investment opportunity? Presently, I use a combination of bank "high interest" e-savings accounts (.75% at RBC; 1% at Tangerine) and the "Cash optimizer" within Scotia i-trade accounts (.25%). How can I do better?

Q: I think I noticed earlier in one of your answers to a question you stated you did not think a Canadian could buy a us based mutual fund.I am looking at buying "IAT" which is a etf based in the US.What is the difference between buying mutual funds in the US and etf's based in the US?

Q: If I own in a U.S. dollar account,Canadian cross-listed companies which pay a U.S. dollar dividend,do I receive the dividend in U.S. dollars free of any exchange fee and the dividend tax credit?If the answer is yes,where can I find a list of these companies?I have a U.S. dollar trading account with T D.Thanks for your help.