Investment Q&A

Q: Hi 5i,
Have a question about brokerage bank accounts and government guaranties. My understanding is each account could have $100,000 in CDIC if it qualifies and each account generally has $1,000,000 in coverage though another entity. If one has hypothetically $2,000,000 is one account the are at some risk as they are only covered to $1,000,000. Should the person buy treasury bills and stock (companies) in their account as if the bank gets in trouble you still own these assets, I cannot imagine the assets being liquidated and sold in a bankruptcy.

Q: Hi 5i
As I've asked far too few questions and have load of question credits ... It's that time again ... what is 5i talking about internally that makes you all optimistic or pessimistic at this time? Would your views internally track the previous investor sentiment surveys and how does it differ (if it does).
Thanks

Q: How long since the inversion of the yield curve happened. Isn't there a direct correlation at predicting a recession? What is the theory exctly and how close are we hence if this prove to be right? Does it always happen?

Thank you

Yves

Q: In answers to Member questions concerning US stocks we may see a comment stating that "Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in.." and then the company is named. Could the "financial or other interest" include holding the company's stock as a Short position?

Q: Trying to build a long term bonds piece to my portfolio. Currently own small positions with ZFL and XLB. What addition add to or new buys should I make to continue adding to bonds?
After the FED's announcement what if bonds go up a lot? What if they go down a lot? Does that make a difference? Would you be a contrarian at this point? Please explain your position. Take as many credits as you see fit.
Thank you

Yves

Q: Is WealthSimple covered by $1M insurance from the Canadian Investor Protection Fund i.e., cash and registered accounts are very safe as assets are kept separate from the management company? Thanks.

Q: Monday I put in an open order to buy CSU, 10 Shares, on opening… The order filled at a price $40.00 dollars higher than their recorded opening price and higher than it had been recorded to trade at, for the last year… The bank ( BNS) tells me that they can do this, as I didn’t order 100 shares ( 1/4 million dollars worth) or put in a limit order…. This smells a lot…

Q: For an RESP with withdrawals starting this year, ending likely 10 to 11 years out for youngest child:
Largest holding is the ETF VUN (US) at 43% followed by BN and AC at around 12% each, then TOI, DOO , ATZ, SU, BAM in the 3-10% range each. Not included is the unfortunate loss of about 8% of the RESP due to failure of XBC.
So the focus remains on growth for the next 4-5 years to keep withdrawals mostly funded by growth.
Thoughts on keeping VUN as is? What about a higher-yielding ZWB in lieu of the individual stocks? Any concerns / risks that you know of for the stocks listed or maybe can offer some lower-risk substitutions?

Big thank you!

Q: Structured notes are a stock/bond hybrid with a limited life span or maturity. When an advisor touts them, they may sound appealing because they often combine high coupon rates with some level of principal protection that would enable their buyer to get their original investment back. Legally, they are unsecured debt obligations of the issuing bank. Unlike most bonds, their coupon payments are often contingent on the performance of an underlying asset such as a stock or index, which means coupons may not always be paid. Structured notes often have no potential to appreciate in price or have an explicit cap on maximum gains.

According to Amy Arnott, a Senior Portfolio Strategist at Morningstar,

“Structured notes may offer big payouts, but those advertised yields aren't always worth the risks. In fact, when we recently dug into some of the academic research on how structured notes have performed, we found that two of the three studies we reviewed found that on average, structured notes have failed to perform better than a balanced portfolio of stocks and bonds, and at times have failed to keep up with risk-free Treasury bills.

Structured notes still account for a tiny fraction of investable assets in the U.S., but they've been gaining in popularity amid recent market volatility and record-low interest rates. They're often described as a way for risk-averse investors to capture additional income while limiting downside volatility. But their embedded costs, complexity, lack of liquidity and transparency, and often unfavorable payoff profiles make them difficult to use in a portfolio. Investors tempted by double-digit yields should therefore tread carefully--or take a pass.”

Can I please get your thoughts and views on structured notes and whether you are in agreement with Amy Arnott’s opinion on structured notes as an investment vehicle? Is this another losing investment opportunity like buying shares in WEED.TO back in the Spring of 2019?

Q: I'm wondering if the management fees on ETFs and Mutual funds are tax deductible? My tax software ask for "Management and safe custody fees" and it tweaked my interest and this question. Sorry it is so late. If possible can you answer this weekend? Thanks for the great service.

Q: Thinking of opening a Questrade TFSA account. Is it considered as safe as TD Direct investing or other big banks i.e., if the CEO does something stupid and it gets in trouble?? Is there insurance? Thanks as usual. Danny-boy

Q: I’ve read recently that older seniors overestimate their financial acumen, so I wanted to ask if you think the plan that I think is sensible, is. My thought was to move non dividend paying stocks from my TFSA to my NR., thus making room for the transfer of dividend paying stocks from my NR account to my TFSA where they would produce tax free dividends. Is that a reasonable approach for someone beyond the accumulation stage of investment? I’m wondering if there’s something I’ve failed to consider in this. Thanks as always.

Q: Good Morning
A couple of brokers have indicated that these two stocks are overvalued. Specifically for TRI they indicate that the Fair Market Value is $150.49 while the stock is trading much higher. Similarly for WSP the fair market value is indicated as $162.06 but the stock is trading at $176.03. One broker has even recommended selling WSP.
My two questions are: i) How is the fair market value (FMV)determined?
and ii) Is the FMV a significant factor in stock selection?
Thank you as always for your insight.

Q: With reference to a question from cal re resets he may find this site informative

https://canadianpreferredshares.ca/

Q: Hi all,

I wanted to share this from a post on LinkedIn:

You have to be fluent in accounting to look at public companies.

Not because accounting itself matters.

But because accounting can obscure what matters.

READ THAT AGAIN

And your task it to translate GAAP into meaningful business logic.

Or use 5i Research :)

Happy Easter Everyone!

Q: If a CEO buys common shares on the open market in the CSE
what is the designated period of time afterwards that the company can release material news?
Thanks

Q: Everyone, when to sell stocks? My theory is to buy the best of the best stocks and keep them forever (AAPL, AMZN, MSFT, NVDA, SHOP), over my investing career of thirty plus years. But I have had a few problems (LSPD…). Usually they are growth stocks that don’t continue to grow. If you have a suggestion(s) for triggers to sell a stock I would appreciate those ideas. Clayton

Q: Hi 5i,

What is your opinion of the growth prospects for iJS over the next 2 years?

Thanks for the opinion.
John

Q: Hello, I am overweigh Tesla as I love the product and observe it is family of products including EV's, Energy production (Solar) and retail (Supercharging). All with revenue growth potential. My question has to do with trading volume. Over the last few weeks I have observed Tesla's trading volume at multiples of the big guys, say Ford and GM. A few minutes ago, Ford traded about 5 million shares, GM 2 million and Tesla 25 million. Can you comment on the interest in Tesla and how it could factor in the future stock evaluation ? How important is trading volume ? Thanks for your excellent service.

Q: Question regarding the topical issue of bank defaults...
I have seen many discussions lately regarding Canadian deposit insurance / investor protection fund (including Peter's recent 5i article) but...
What happens to stocks owned in a brokerage account if the brokerage becomes insolvent?
Am I not the beneficial owner of these stocks?
So I am wondering why the $1M coverage under the CIPF would even be an issue.
Would my stocks not just be transferred to my next brokerage account or directly to me in the case of default?
Would one need to even worry about stock holdings >$1 million at one particular brokerage?
Thank you for answering a question I have never found an answer to.