Investment Q&A

Q: Hi Peter & team, I always find difficult to remember the company name associated to a symbol. If possible, when answering a question could you please make sure to use the company name in your answer. This would be easier to read, and would avoid the need to search for the company name associated to the symbol used in the question. On the other hand, it would be great if everybody would do the effort of using both the symbol and the company name when asking a question. Thanks, Gervais

Q: Hi Peter,

How come you do not have any US stocks on your recommended list.

Paul

Q: Looking at reallocating some cash in my RRSP to stocks in the Model portfolio. Was wondering if you expect some downward pressure simply due to the "sell in May" phenonema. i know over the long term it probably doesnt matter but short term Would I be better of waiting a month or two for a better entry point.

Q: good morning,
could you clarify joe's april 9 comment regarding having your broker "journal" inter listed stocks from Can. to US listing and then selling to raise us funds? Assuming the stock performs flat over the holding period, does this circumvent the bank charges that your would normally incur if you just bought us funds?

Thanks,
John

Q: Was reading where it says TD is entering overbought territory with a RSI value of 73.5,could you explain this

Q: As long as you have both US & CDN a/c's I just call up TD or CIBC. Let's say I have 1000
ABX in my CDN a/c I just ask them to journal same into my US a/c. Then I sell same
in US a/c. Presto I have $20,000. US. This applies to any interlisted stock.
Joe

Q: Re "SGY" surge energy, good news today, how and where do I get this info, much appreciated.

Q: When selling a stock short and buying it back in a different year. Do I report gain or loss in the year the transaction is closed ? Would the same rule apply when selling put option in one year and buy it back or exercised the year after?

Thanks

Q: Regarding Jacques' question on March 26, 2014 and the response, it is correct that no tax slips would be issued for any TFSA since it is a tax free account. All that happens when dividend withholding taxes are applied is the cash dividend you receive in your TFSA from US holdings is reduced by the withholding tax. This is also true if you hold foreign non-US holdings in an RRSP based in countries in which Canada does not have a tax treaty with in relation to RRSP's. I have seen this in my own RRSP account where I have had withholding taxes taken off my Teva dividends. The main purpose of a T3 tax slip is to distribute income to the taxpayer for a taxable account. They are not going to give you the benefit of any deductions if there is no income to be taxed. Hope this helps.

Q: Hi,

Regarding BYD.DB, can you explain in some detail how this security will behave? Since it is trading well above its conversion price, my understanding is that its delta should be close to 100% of BYD.UN, but it will have 5.75% interest payments instead of the ~1.35% distribution? Does this not make it more attractive than holding BYD.UN? Can you also put into simple language the redemption features?

"On and after December 31, 2015 but prior to December 31, 2016, the Debentures may be redeemed by the Fund, in whole or in part from time to time, at the option of the Fund, at a price equal to the principal amount thereof plus accrued and unpaid interest up to but excluding the Redemption Date (as defined herein), on not more than 60 days' and not less than 30 days' prior written notice, provided that the volume weighted average trading price of the Units on the Toronto Stock Exchange (the “TSX”) for the 20 consecutive trading days ending on the fifth trading day immediately preceding the date on which notice of redemption is given is not less than 125% of the Conversion Price. On and after December 31, 2016 but prior to the Maturity Date, the Debentures may be redeemed by the Fund, in whole or in part from time to time at the option of the Fund, at a price equal to the principal amount thereof plus accrued and unpaid interest up to but excluding the Redemption Date, on not more than 60 days' and not less than 30 days' prior written notice. The Debentures may also be redeemed by the Fund in the event of the satisfaction of certain conditions after a Change of Control (as defined herein) has occurred. See “Description of Securities Being Distributed - Offer Upon Change of Control”.

Thank you.

Q: Wondering if 5i comment and/or any current and 2012 (1st year) subscribers claimed 5i membership as a deduction claim on "carrying charge" on Line 221 -> I'm saying that 5i is financial research not a newsletter magazine. I'm doing it again for 2013. I didn't have any problems for 2012. Peter / 5i staff -> you've done a great job!

Q: PHE is the Tactical Hedged Equity Fund from Purpose ETFs, which Som Seif is now involved with. Assets are now above $50mm, performance has been reasonable since inception last autumn, and management fees are under 1%. Would this qualify as a true hedge fund in the same league as Picton Mahoney and Donneville Kent's as net market exposure seems high around 80%, and how would their mandate for hedging the equity market compare with the others including Venator etc.? Also do you have any opinion on the 5 Purpose ETFs in general, or any experience with Som from his time at Claymore? Thanks, J.

Q: What are your current sector waitings for moderate to aggressive investors? Thank you

Q: Hello Peter....Now with a diversified portfolio, I'm looking to sort the existing holdings and new additions between 3 accounts - new TSFA, adding to non-registered account and managing an existing LIRA account that is can be drawn down beginning in 2107. I'm doing this because of the different income tax rates related to gains, dividends and interest as outline in recent 5iR Q&As. It would be helpful to me to know the holdings in the model portfolio and the income portfolio that you consider to be foremost growth oriented. For those, I would allocate to the TFSA. And I take it for ones like Surge that is growth oriented but with a high yield of about 8%, you would consider assigning it to the non-registered account. And ideally, fixed income and trusts would be held within the LIRA account. Thanks for the guidance......Tom M

Q: A friend recently brought up an investment opportunity for puddle pond resources, a junior mining company located in newfoundland. How can you properly research these companies that are not listed yet? The news articles on their website sound promising, but I also know they are trying to raise cash. I have never invested in unlisted companies and would appreciate any info you can provide.

Q: I am underinvested in US stocks - my USD account is only 1/30 of my portfolio.
1. I have missed some great opportunities and I can't buy anything without incurring 11.3% exchange ... HOWEVER People are talking about 15% exchange in coming months.
2. I don't wish to be too late in play if the CAD returns to Par.
3. What is the smart money doing ?

I guess it is best to inch into these things ...
You talk about having 1/5 in US equities and I'm not even close !...

Q: I have a large portfolio consisting of Canadian stocks - large cap only. I think my portfolio should be more diversified and I was wondering what percent you would suggest for your model portfolio as well as US stocks. And would you put the US stocks in an RRSP to avoid withholding taxes? Thanks for the advice!

Q: Hi 5i Team,

I cannot find a consistent definition of small-cap, mid-cap, large cap, and even micro-cap (anything else?). Everyone seems to have their own definitions. Since you use these terms frequently can you define in terms of market capitalization what they mean to you (5i research) for Canadian and US stocks.

Also what are the market capitalization values that seem to trigger more investor interest in a company? For Canadian stocks it seems that once market cap reaches one billion dollars, it gets more investor interest (I think I read that here).

Thanks,
Paul

Q: Over the past few years I have made significant profits in the markets.How do I safeguard thse profits as I FEAR A SIGNIFICANT correction is looming?I have vivid memories of 2008.Is a 10% stop loss a good way? Or what can you suggest> Thank-you

Q: Dear Peter/team,
It is very nice for you to answer all members questions and as membership increases - I think it will - you may not have time to answer all their questions, and some members are demanding a lot.
I wish you would put some more time on the real research than answer some of the repeated questions.
Thanks Again.