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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I am wondering about the benefits of using market and/or limit orders. My normal purchase is between $5,000 - $10,000 and I am a long hold investor type. I have used the limit option maybe twice and frankly, found it kind of stressful - always having to check if the order got placed or looking to see if the share price is increasing and therefore I miss out altogether. My initial reaction is that in 3 years I won't really care about the few dollars I might save today. Or am I being too blase about this and throwing money away needlessly?

As always, appreciate your insight.

Paul F.
Read Answer Asked by Paul on June 28, 2017
Q: What discount broker would 5i recommend for a DIY investor who has a good knowledge level of the investment world? Things to be considered would be portfolio management, alerts, news reels, trading fees, real time quotes, charting capabilities, US & CDN Market coverage, consolidated reporting (across various accounts - e.g. RRSP, TFSA, LIRA, ORDER). Thank you.
Read Answer Asked by Bob on June 27, 2017
Q: As I grow older I find myself more risk adverse. You receive many questions regarding going to more cash when one fears a market correction and you claim, and I agree, that market timing is very difficult to pull off. None the less I am fearful of large loses similar to those encountered 10 years ago.
Now to my question. If one is investing for income, as I understand it, if the dividend is safe then a capital loss while not good can be tolerated with the hope of recovery because of the steady income flow. I am setting up a RRIF and am concerned about equity draw downs from a recession as well as increasing interest rates. In conclusion an income investor should be able to sleep at night knowing there is a steady income stream. I am trying to generate a 5% annual dividend stream. Thank you.
Read Answer Asked by Richard on June 26, 2017
Q: Doc as many questions as required....

I am looking at moving out of a managed portfolio for which I pay about 1.5% management fee plus the fees for the products in the fund ( averages about 0.29% for a net of about 1.79%). The managed fund has not beat its benchmark net of fees in last 5 years so I am giving my manager and the product the boot.

Main reasons are:
1. I am paying for an "actively" managed fund that really is performing like a index fund ( I can buy the fund benchmark as ETFs for %0.23 mer)
2. I dont really need it to be balanced due to my other investments. It was useful when I had less money, less time and less knowledge.
3. I have the time, temperament and knowledge to move it all to be self managed

My plan is:

1. Not have any fixed income holdings as my wife's federal government pension counts for all required fixed income/bond. It is also the anchor that allow me to be more aggressive with our other investments

2. All Canadian exposure will be via stocks loosely following your balanced equity portfolio.

3. For the US-global exposure I am considering adopting the US/global portion of the CME ETF portfolio with the following weighting: 10% VEE, 10% VE, 20% SPY, 25% VIG, 25% IWO, 10% ZWU. ( ie cut out most CAD and bond stuff and kept the same weighting as CMS portfolio for the rest)
4. Simplify the number of products I have across multiple account. In other words balance globally vs balancing within each individual account.

So my questions are:
1. At a high level what if any changes would you suggest to this approach
2. My portfolio is a mess with multiple products across TFSA, RSP, RESP, and unregistered accounts for both me and my wife. Very generally can you remind me which products should be in which account for tax efficiency.
3. Any suggestions on how best to transition...general plan is all new money goes to ETFs, move 1/3 each year out of managed fund to ETF portfolio.

Tom
Read Answer Asked by Tom on June 26, 2017
Q: for my sons RESP can I get your opinion of the 3.25% 5 year GIC being offered by Home Capital? The amount is far below the $100,000 threshold.

Is a safe 3.25% a reasonable rate of return for an RESP that I need in 5 years time? Alternatively, would I be better to off with the investment strategy your team outlined which would have a higher potential yield but principle risk.

Your thoughts are appreciated,

Don
Read Answer Asked by Don on June 23, 2017