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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: For covered calls, can you see a reasonable risk adjusted return profile if you can only write 1 or 2 contracts? Or do you think the friction will be a setup for failure (based on typical CDN bank commission structure of 9.99 + 1.25/contract). I've been wanting to dip my toes (maybe with something like Loblaws) but the healthy chunk coming from my payout has me wary. Also, do you happen to know of a good beginner resource for understanding if the contract price is at least reasonable for the option writer (I know it is fairly speculative but don't want to get completely fleeced). Thanks for everything.http://www.5iresearch.ca/questions/category/miscellaneous-misc
Read Answer Asked by Andrew on January 30, 2017
Q: I am connected to a 41 year old who is about to start investing and putting some money away for retirement

He has very little investment knowledge
He has about $ 200,000 to invest We are going to start with his TSFA and make the maximum contribution and then we will set one up for his wife

Where is a good place to start Would you recommend a basket of ETF's or buying individual stocks His investment horizon is 20 to 25 years

Which are your preferred ETF'S or your 6 equities

Thank you very mucb

Paul
Read Answer Asked by Paul on January 30, 2017
Q: Hi 5i team, I have a general question on companies being removed or added to the different s&p tsx indexes. On Jan 23 a number of companies were added and many deleted (gte and exe among them), so my question is with these being very large indexes with many eft's and mutual funds holding them, is there actually a lot more buying or selling of these particular stocks by these funds or funds copying them. and if so do they have much lead time before the actual replacement date (jan 23) and would you see more adjustments continuing after the date possibly affecting normal trading of such companies.

thanks Tom
Read Answer Asked by Tom on January 30, 2017
Q: Hello 5i team. My question is in regards to taxation. I have an investment account at a CDN discount brokerage in US dollars. If I was to buy a cdn company say TD bank that trades on the US market and buy it in US dollars how would the dividends be treated? Would the dividends be paid in US dollars or paid in CDN dollars then converted back to US dollars? If they are paid in US dollars then are they subject to the 10-15% US withholding tax? I am trying to find investments that I can buy with US dollars but not be subject to the US withholding tax. Thanks
Read Answer Asked by pietro on January 27, 2017
Q: When doing my research, I have a defined method that includes 5I views but also Morningstar (for Quantitative view) Thomson Reuters for fundamental views and forward looking views and if buying USA stocks Bloomberg. Recently my brokerage made S&P research available and I am finding contradictions in how seemingly same facts are both viewed and presented. There are several quantitative S&P views on stocks that give "sell" ratings while the others give positive ratings. I was wondering if you use any of these sites for information an if you have a bias towards one being more accurate then another. Thanks Jim
Read Answer Asked by James on January 27, 2017
Q: I buy a number of my international stocks on the OTC Market, since my brokerage account does not let me directly transact on exchanges outside of North America. The American Depository Receipts (ADR) for a particular company ("xxxx") have the ticker format xxxxY, whereas the "fungible" shares (i.e. for which there is somewhere, at least in principle, an actual stock certificate issued by the company) have the ticker format xxxxF.

Assuming that there is at least some liquidity for the shares of a particular company, it is almost always the ADRs (xxxxY) that have the most trading volume. However, sometimes the fungible shares (xxxxF) are slightly more liquid than the ADRs.

In terms of risk (e.g. in the event of another major financial crisis) are the ADRs more risky, i.e. do they depend on the solvency of the custodial bank in New York (e.g. BNY)? On the other hand, who actually possesses the fungible shares (xxxxF)? Is it this same custodial bank? Is there a real stock certificate somewhere?

Thanks!
Read Answer Asked by Gregory on January 25, 2017
Q: As we get older we are thinking of making our portfolio less volatile. Therefore, we have been thinking of eliminating cyclical stocks, such as energy, companies like Agrium. Do you think this is the best route, or would you prefer, as I think you do, hold a smaller percentage of cyclical stocks? Also, would you consider a company like Finning, which is related to the energy sector in many ways, as a cyclical stock?
thanks again for a wonderful service
Read Answer Asked by joseph on January 24, 2017
Q: In response to a previous question you recommended GSY and TCL.A as good candidates as value stocks. I note that both are near their 52 week highs. I was under the impression that a value stock would have a share price that is not doing well. I would appreciate it if you would clarify for me your criteria to identify a value stock. Thank you.
Read Answer Asked by Dennis on January 24, 2017
Q: I would appreciate your insight on when to exit from growth and longer term portfolios. In winning positions one has luxury to take profit according to personal inclination. Some take at 15%, some 20% to 25%.

My special concern are loosing positions. I have heard of 13 week moving average, Chandelier stop (3ATR). They make sense in a trading situations. What will your advise be to get out from 5i type Growth and Long term portfolios when the stock has tanked. Could that a specific % loss say 8% to 10%. I am interested in your criteria.

Thanking you
Shah Husain
Read Answer Asked by Shah on January 24, 2017
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