Investment Q&A

Q: MyOwnAdvisor interview just another example of what a splendid service you offer. Many thanks, and happy spring.

Q: 'Playing defence' question of Mar 20/14 asked by yossi:

As noted in the answer this could play out in many ways.
One thing an investor can do is conduct all non-margin activity thru a 'cash' brokerage account so that all securities therein cannot be used in the brokers business. RRSP/TFSA's are already 'cash' accounts.
Secondly, set up your accounts to use a third party trustee.
Most brokerage accounts are 'self-trustee', ie they act as their own trustee. This was the same structure (no comparison intended) used by Madoff, MF Global, and Lehman Brothers to access client funds)

Publish at your discretion.

Q: We listened to BNN's duscussion on tax for 2013 returns, and also to our own accountants, to minimize US stocks in RRSPs and TFSA because of the requirements for US in relation to recording and the treaty in relation to this. I am confused on this, are you able to clarify the tax ramifications for Canadians holding US companies in their portfolios? Thabk you.

Q: Hi Peter, In your interview with My Own Advisor you stated, "Also, there will be at least 10 times of complete panic in the markets in the next twenty years. Use these times to buy, not to panic."
Recognizing that there will be a different number for every individual and situation, what would be an acceptable range of cash to keep for the purpose of buying into panics, say 10 to 20%? Or would you recommend staying fully invested and pulling funds from the fixed income side of the portfolio, or tapping into margin, or perhaps a combination of the 3 areas? Thanks, J.

Q: Peter,

I am hoping that you may be able to clear up the confusion I have about what is the definition of a "dividend stock". In response to a question from Mark yesterday about obtaining a 5% dividend yield, you commented that outside of telecoms or utilities, it is difficult to get more than a 5% dividend (although you did note almost as an after thought that the REIT sector has higher payouts). However, there are a number of stocks that you support that do pay out higher dividends - many of them in the oil and gas sector - and there are several tech stocks and assorted others as well. (Morneau, Calian, Torstar)

Secondly, in the past you have referred to companies such as Boyd, Stantec, Cineplex etc as being good "dividend stocks" even though there dividend yield is somewhat low (not even sure why Boyd is called an Income Fund with a 1.9% yield).

So my question is, what is the definition of a dividend stock and do those stocks differ from stocks that pay a high dividend?

Thanks.

Paul F.

Q: Hi Peter & team, this is a general question. For any company, once in a while we hear or read "the stock is down today on heavy volume" or "the stock is down today on low volume"? Could you please explain the difference? In other words, is it "better" for a stock to be down (or up) on heavy or on low volume? Thanks, Gervais

Q: Hi 5i team, what is the risk , reward ratio and market cap before you recommend a stock? Any potential of CTH, small in a hot sector ?

Q: Hi,
I am trying to understand currency hedging. This is from FFI.UN's description:
"Currency Hedge
The portfolio's US dollar exposure is hedged back to Canadian dollars to protect against currency risk."
Does this protect me against the CND dropping or USD dropping?
Thanks!

Q: Good afternoon....based on the recent comments by Bank of Canada -Poloz "low growth, low rates" what impact do you project for interest sensitive stocks (REITS, Pipelines/utilities, dividends stocks for income)...Thanks

Q: Hello Peter....I have a few questions from reading your right-on allocation for sectors on the TSX.(https://www.5iresearch.ca/questions/category/market-strategy?page=6#sthash.OCVTk6O3.dpuf) I take it this allocation is still 'good' in the current environment..and also built around a dividend/growth approach.

This allocation gives a weighting of 10% to info tech - hardware and 10% to info tech - internet and software. I'm sizing up my info tech positions between these two splits. For hardware, I assigned 2 positions, Avigilon and DavisHenderson, with a total weighting of 4.6%. I would appreciate your suggestions to round out info tech hardware....being with Canadian or US companies.

I earmarked Amaya, CSI. Constellation, Enghouse, Open Text to info tech - internet/software, summing up to 6.7%. For these, should I be adding to these positions or are there others, Canadian or US entities?

Also is there an article on Cdn Money Saver or other source about your thoughts on sector allocation/weighting?

Again, thanks.............Tom

Q: Hello Peter....I googled "hodson allocation risk" and this is interview that starts off with "I actually bought my first stock when I was 11, in Ottawa. It was Mitel Corp......"

Though others than tune in at 5iResearch might like to read it 2. It's at http://www.myownadvisor.ca/category/authors-and-books/
..............Tom M

Q: Thank You for answering my early question but if you have a profit when selling your stocks and not a loss do you still have to wait the 30 day waiting period before buying back in.

Paul

Q: Good Afternoon,

I was interested in knowing if when I sell all of my stock holdings in a company is there a 30 day waiting period before I can buy back into it.

Thank You
Paul Bohusz

Q: Hello- regarding ETFs in general-
often Etf trade above their NAVs during the day, and sometimes for several days or longer. If the ETF issuing company is selling issuing and selling new shares above NAV, where does the extra money go?
Also, should the issuing companies not adjust the price to reflect NAV at least once/ day? I find it annoying to check the NAVS on the Horizon or ISHARES websites and find them different from the market price. Or am I offbase on this?
Thanks

Q: Hello,

I have a few stocks on my watchlist so I was observing them intraday, my platform provides news on the stocks you're watching. One message I kept seeing was "Option Volume Spike Up, Option Volume Spike down" How does option volume affect intraday price movements?

Thank you

Q: Hi Peter and Team,

In previous answers to questions you've said that 1) earnings, 2) interest rates, and 3) flows of capital (e.g., from bonds to stocks) tend to be the main drivers of market activity.

What is your take please on these drivers so far this year in Canada? Are any trends emerging?

Many thanks.

Michael

Q: Do you anticipate a substantial pullback in the market in the next while?
How would you recommend to prepare for the possibility and
Would things would you recommend to do if it should come more suddenly than rxpected?

Thanks

Q: To your list of Quebec companies like FSZ possibly impacted by a PQ win you could add BCE, IAG, ATD, PJC, POW, NA, CNR, MRU, BBD and more. I don't think the separatism issue is on the media's radar in a big way yet, but if polls next week indicate a jump in support due to the star candidate's arrival, this could change fast with the feds being mute so far. My memory doesn't go back to the referendum of 20 years ago but I wonder if it wouldn't be the banks and financials hurt most as both sides have a tug of war going on the C$ as a central theme presently, and money runs scared first, asks questions later.

Would you agree or which sector is most vulnerable? Thanks, J.

Q: For sources for information on U.S. company's, which do you find more reputable, and why, motley fool or seeking alpha? thanks.

Q: Got to say, Peter, since "listing" for 5iResearch, I'm investing in medium and small cap stocks on the TSX, much more so that in the past. Also it's like I'm more aware of stocks other than energy and big financial entities that get continuous media attention. This adds up to better diversification for a retail investor like me, including for both non-register and registered accounts. On the emotional, un-technical side of things, I'm more comfortable with what I'm doing, and holding too...plus learning what to focus on in doing my own background analysis...Again, thanks...Tom M