Investment Q&A

Q: I have a relatively large cash position in my RRSP which I would like to invest for 3 to 6 months in an ultra safe place due to the political uncertainty at the moment. Do you have any suggestions?

Q: Please discuss dividend distribution schedules, monthly vs quarterly, in the context of DRIPS ("synthetic" DRIPS, by the brokers or trading platforms, which typically deal only in whole shares). A DRIP investor would want a dividend payment & schedule that yields sufficient dividend to buy new shares with the dividend.

SIS, which I recently added to my TFSA, has just changed to monthly dividends -- with not enough dividend to DRIP monthly unless I add more SIS, putting my SIS holdings at an uncomfortably-high allocation. My KBL has been in the same situation, for quite some time now.

What influences management to go to monthly from quarterly distribution?

Q: If you sell a stock before the dividend is paid do you still get a portion of the dividend for the time you owned it?

Q: I am a retired, conservative, dividend-income investor with a well diversified portfolio, including a company pension, CPP, annuities, Fisgard Capital, and equities via RBC Cdn Equity Income, Sentry Cdn Income, Sentry Global REIT, ZLB, XIT, AS, ALA, AQN, BCE, BNS, CSH, CGX, ECI, FTS, PBH, PEY, ABT, RY, WCP, WSP and a small position in Sprott Energy. Looking under the hood, this portfolio has 33% of its value in non-Canadian assets, which is at my comfort level.

Question 1 = I know portfolio make-up is very personal, but when is there too much foreign content in a conservative retirement income portfolio? Adding ZWE pushes my foreign content over 35%.

Q2 = most of the distribution for ZWE is capital gains, ROC and about 30% interest income. I plan to put ZWE in my cash account...make sense?

Q3 = I already have roughly 22 securities, which is plenty enough for diversification. I am hesitant to add more, but I think ZWE makes a good fit. A second alternative would be to continue to "trim and add" as the allocation #'s make sense. A third alternative would be to simply add NFI to top up my industrial allocation.

Thoughts please...thanks. Steve

Q: I have equity positions across my wife's and my accounts ... tfsa, rrsp, and taxable. A good portion of my equity is in etf's mostly covering us and international positions. When I calculate a full position with my Canadian individual stocks(5%) do I use my full equity amount or just the amount invested in the candian stocks (I.e. The 5% of my Canadian portfolio would be closer to 2% of my total equity portfolio).

Q: I have been an investor in small and midcap stocks for over 20 years with a willingness to accept additional risk in my portfolio.I am now transitioning my portfolio to a more Income focus, as i will need dividends to supplement my retirement.
Questions i have are about construction of income portfolio?
Do you feel it is still important to diversify in other countries and regions outside of Canada?You would lose some of the favourable tax benefits!

In trying to classify many dividend stocks in sectors i find that they cross the line into numerous sectors,(example many pipeline stocks are said to be oil and gas stocks, many are said to be utility type of investments)
What sector do you put an ETf in?Seems like a lot of investors drive themselves crazy in the allocation to sectors

I have looked at your income portfolio and your fixed income portion that is addressed by a few Etf.I have taken positions in individual preferred shares,debentures, a couple of instruments with bond like qualities.What is the percentage you would advocate for fixed income or there proxies?

Many Blue chip income stocks pay quarterly dividends,when i prefer monthly dividends.This again can skew my portfolio so that diversifying by sector and country becomes difficult

I find that the construction of my Income portfolio has given me many grey hairs(which i dont need help with"thank you very much")

Q: I thought this might be of interest to all. From a mining blogger I follow.

So I get this message from a short seller firm...
Posted: 25 Sep 2017 02:46 PM PDT
...this morning, quite a well-known one in fact, that said (quote) "When you have a minute to chat I want to run something by you". I think fine and replied "Tell me". Just a couple of minutes later the phone rings and the representative of the short selling firm offers me a gig. What happens is that they would do the legwork on A.N. Other stock then send over the information, I would publish the info on the blog, presumably they are already short when they give me the juice, the stock goes down and as a result they would profit. The short selling firm would then pay me 20% of their proceeds for my time and effort. He also said that the firm in question already has this type of arrangement with other outlets, so I can only presume their business model works just fine. I told the person in question that I'd think about the offer. He can consider this post as my definitive reply and if he wants to push his luck, next time names will be named.

Q: Do you think it wise to sell all securities until this US Korea problem gets fixed one way or the other. If hostilities do break out I imagine the world stock exchanges are going to break down.

Thank You
Craig

Q: I am becoming more interested in debentures as part of the fixed income portion of a portfolio.

1) Doing the math on CSU.db it would not pay to buy them if they are called in 2020. What things do you look at to forecast whether or not a company would ever call them. Is calling them a rare or regular occurrence? I realize each company has different needs.
2) Are debentures normally fully explained on the company's web sites re terms and conditions?
3) Are there any other websites, publications etc you would recommend so I can learn more.

Thanks

Paul

Q: Hi 5i team, Sean asked a question about NYX earlier, and you suggested he "tender the offer". I too own NYX, and I'm new at having a holding bought out. Could you explain what "tender the offer" means, and if there is anything I would have to do on my end? I'm with RBC Direct Investing. Thanks!

Q: Does previous day activity in foreign markets offer any clues as to the activity one can expect on North American exchanges or vice versa? For example, every morning I read about how the major foreign exchanges have performed and I wonder if they are reacting to North American news or do North American markets react to Europe/Asian news or neither? Although I don't trade frequently and usually don't worry about a couple of percent change in a share price before buying, does a really poor day on the DAX, for example, suggest that I should wait to buy on the TSX because our prices would likely drop as well (realizing that sometimes the drops are sector specific and sometimes they are overall drops).

Appreciate your insight.

Paul F.

Q: In your response to Brian about ETF and market panic, you say that in a market panic an ETF might have to sell a stock to meet rememptions (kind of guess you meant redemptions !?). Could you explain further? I thought if individuals panicked and sold their ETF, some other individuals would be the buyers, rather than the ETF having to do anything re holdings, and that the total shares outstanding would not change. Isn't this part of what separates an ETF from a mutual fund?
Thank you

Q: I am retired with no pension. I invest primarily in Canadian Dividend stocks and have in effect created my own "pension income" that is taxed at a "low rate" thanks to the Dividend Tax Credit. With our current Federal Government's massive deficit spending and their recent plan to implement "tax fairness" measures directed at private corporations I am very worried that there next tax grab will include elimination or reduction of the DTC despite the fact that the DTC compensates for taxes paid by the corporation and that dividends are paid out of retained after tax profits. If this were to happen, I think there would be a significant negative market reaction since I think the DTC creates considerable demand for Canadian dividend payers. Do you agree and if so which sectors or type of companies do you think would be most impacted? Thanks

Q: To clarify your answer to my Sell side question:
1.When you say dropping a company(stock),do you mean dropping from the different portfolios you have or not?
2.When you say dropping coverage, do you mean when the company (stock) goes below C plus or what is your indicator for you in dropping coverage?
Thank you, Herbert

Q: For a portfolio in excess of $1 million, can you articulate any general principles for when you would opt for diversification within a sector rather than a single, concentrated holding? I tend to gravitate towards diversification in most instances, but as a result I have considerably more holdings than any of your model portfolios, and would like to reduce my positions and be more strategic in my approach to diversification.

Q: hi peter my question is a general about buying a inter listed company say buy td in Canadian exchange in Canadian dollars and sell in new York exchange in usa dollars and that way you you can convert you Canadian dollar into usa dollars without paying bank exchange commission
is that alloyed or is that is possible

Q: This is the YOUTUBE that seems to explain it... https://www.youtube.com/watch?v=kqD8T4aXBIk

Q: As a Canadian listed company with a US business, how are the dividends treated if held in a taxable account. (I was unable to find this on their website) thank you..gary

Q: How much do you rely on technical analysis for making buy recommendations...do you you consider buying a strong stock on weakness...a pullback to a moving average....pullback to major support levels?

Q: Could you suggest advisory like 5IResearch with focus on US stocks. Thank you