Investment Q&A

Q: The prospect of rising interest rates has come up a several times recently in both questions and/or some of your answers; and I would appreciate your help in connecting the dots (as in cause and effect). With O&G prices having fallen so much; and comments being made that the entire economy might actually slow down because of the size of the industry in Canada, why would rising interest rates appear to be likely? .... unless there is a serious and legitimate concern about "Stagflation" raising its ugly head again, which scares the daylights out of me.

Thanks for your insights and guidance.

Q: What would be the best investing book for a young adult just starting to learn about investing? I know someone asked this question but couldn't find answer under MISC
Thanks
Dolores

Q: I have come to the conclusion that after all my years of investing, I really don't understand the dynamics of the market. I cannot figure out the huge daily gyrations up $2.00 down $2.00 etc on the same day. Years ago without all the technology we now have things did not move that fast. I guess it is a sign of the times which is difficult to decipher what something is actually worth. On another note could the world survive without a stock market?

Q: Peter, I know that if you sell a stock at a loss you must wait 30 days to buy it back to avoid the artificial loss rules. But if you sell a stock with a gain to offset losses, can you buy that stock back right away without any tax consequences?

Q: Hello Peter and Team
In an earlier question about tax loss selling you have indicated that XEG and ZEO (BMO's oil and gas ETF) could be deemed identical by CRA and the tax loss could be disallowed. I am wondering whether all oil stocks are considered identical for tax loss selling. E.g I sold WCP yesterday at a loss and I am planning to buy VET tomorrow. Can I claim the capital loss on the sale of WCP??
Thanks again for your excellent service.

Q: Hi guys, my percentage weighting of my stocks fluctuates every day based on the previous days close of the stocks price. So if the stock is down one day it will have a 5% weighting and if is up the next day it might have a 6% or even a 7%weighting. Is that common, or is there a better way to figure out the accurate weighting of each stock. Thanks, Nick

Q: Is there a point or set of circumstances where high insider ownership becomes a negative? I'm looking at EXO U (v.exo) that has some 45-50% ownership by the founders plus a CEO who is currently buying more aggressively on the open market.

Q: Could you please explain the "tax loss selling rule". The way I understand it if you have a non-registered account and you want to declare a tax loss for the year you have to make sure after you sell that you don't buy back the stock within 30 days of the sell. So my questions are:
1) What happens if you accidentally bought back within the 30 days?
2) Can you buy it back within 30 days if you have a profit & not a loss?
3) Can you always buy a stock back within 30days if you are in a registered account?

As always great service and thanks for the advice.
Cheers.

Q: I sold some CPG on Nov 17 and it settled on Nov 20. Just to confirm, so I don't trigger the 30 day superficial tax loss rule, the earliest I can repurchase CPG would be Dec 17. Am I correct?

Thanks,
Steve

Q: Peter and Team,

Of my invested assets, I currently have 2.5% cash, 5% bonds (CBO ishares ETF), and 92.5% in stocks. The stock portfolio is diversified as I have tried to model after 5i methodology. I do have other cash outside of my current invested assets that amounts to the equivalent of approximately 25% of my invested assets.

I have been trying to increase my allocation to bonds a little bit because I like yield and feel like my allocation to bonds should be higher than it is for risk-management purposes.

My question is two fold:
1. I am 32 and wondering what allocation I should have to bonds?
2. Is there a bond or other yield vehicle that is similar to CBO that is exposed to international companies or companies that get earnings from international sources like Brazil, India, China, etc. I like CBO because it is short (less than 5 years) duration corporates.

My expectation is to trim some huge winners in the stock portfolio soon that will give me approximately 5% more of the portfolio to put into my fixed income allocation.

PS. I'd also consider floating rate stuff or things that reset with LIBOR or things of that nature as well.

Thanks!

Marc

Q: This maybe a silly question, but what's meant by full or half position... specific no. of shares or lots?

Q: Another crystal ball question-You talk about wading in slowly to a position. What is your best guess-once a week/two weeks/month etc until what you have to invest is used up?

Q: hi peter;on dec 5 re xhy you said out of 137 energy co. there is only 8 that are ccc+ could you tell us the names of them or where would I get this info. thanks brian

Q: Hello Peter, Ryan et al, I am with Paul K all the way. At over 70, retired, I have no where else to go for income with reasonable safety but banks, utilities, pipelines, REITs etc (throw in BEP.UN and BIP.UN). Fixed income? Bah! (I still have a few GIC's going to maturity). For sure, I have stuck my neck out and have a few stocks like ACQ, HLF, EH AFN etc. As for our golden years,we've been led to a place that is not what we expected to be (not your fault). I have a different take. As an INCOME INVESTER (there are very few of us left), I worry about, look at, first and foremost 'INCOME'. That means that if income keeps up with inflation (pray that it be low), I don't worry so much about what happens to the capital. There have been periods in the past when the value of stocks had gone down but the income kept up with inflation. So, the question is: would a portfolio of cashflow generaters that pay out most of it and growing the cashflow going forward be OK for someone like me? Yours with fingers crossed, Henry

Q: I am trying to establish an asset allocation program. I am 74 yrs old have some money in RRIF act's professionally managed and some money I manage myself. My desired return for my self managed portfolio is 5-7% with medium risk tolerance. Please suggest an appropriate allocation.

Q: Hi 5i team,

Could you please provide me with two must read investing books that should be on every investors wish list for Christmas?

Much appreciated,

Jon

Q: This is a comment to an answer to trading in a TFSA. It has always been CRA tax policy to tax stock traders differently than investors. If the CRA declares you a trader due to more than a normal number of trades, they have always been able to tax that individual on the proceeds from the trade. The newspaper article was poorly written and the writer does not understand tax rules. Just another example of newspapers more interested in selling papers rather than educating people.

Q: I have just read that CRA is investigating TFSA trading accounts.Apparently if you do a lot of trades and get quite good at it,individuals or their institutions could be taxed and you cannot withdraw money while being investigated.Could you some light on this subject.As usual tks 5I

Q: 12:06 PM 12/6/2014
Hello Peter

It is said repeatedly that stocks in interest sensitive sectors like banks, pipelines, power producers, utilities, and real estate, will suffer if interest rates rise in the years ahead.

It would seem to me that with today's remarkably low rates that any responsible company officials and boards of directors would be securing all necessary very long term low interest rate financing for a decade or more in advance. Surely they would be irresponsible and negligent not to.

Fixed Income is the only real income investing option other than stocks. Bond yields would have to rise to the 5+% range to be any real competition for Dividends in the 4-5% range, and that seems unlikely in the next 5 years or more [just look at Japan] given all the almost unpayable Government debts in most countries.

So why then are "interest sensitive" stocks vulnerable?

I really have little option but to invest in these large companies with good dividends for ongoing income. So should we be concerned?

Many thanks....... Paul K

Q: I just read that you are providing an investment seminar on Feb 28, 2015. Some of us are not situated close to your Ontario office. Would there be opportunity to host a webinar (over the internet) so that those of us that are out of town can participate? Or can it be recorded for later playback? I think that members would be willing to pay some form of reasonable fee to ensure a profit can be realized by your organization.