Investment Q&A

Q: Historically speaking, what is the average rate of return of ETF’s compared to individual stocks?

Q: So many of your recent answers to member questions have statements like:

"will need a better market environment to perform better"

"it will need a 'good' market to perform"

"A better market will see this stock rise sharply"

"it is still an expensive stock and will only work well if the market co-operates"

It is almost like you are blaming the market for the poor performance of so many stocks. Like how companies blame the weather for their poor results -- but their competitors had the same weather.

So, what do you mean by a "better market"? What has to happen to be in a better market environment?

Paul

Q: Not a question but just a comment that companies like Aritzia First Service and Go Easy would never have been on my radar without 5i. I’ve held all three for a number of years in my portfolio and they’ve done well. It’s also heartening and reinforcing to hear the “experts” on BNN Market Call selecting these names as Top Picks or strong recommendations. I appreciate your sound advice and recommendations. No doubt I can also mention losers that I’ve followed from 5i but my take is that it’s up to us to decide when to sell and what to buy based on your data and your informed advice. Thanks

Q: For PK re Share Buybacks
Try using the research tool from your on-line broker for this. I use Scotia iTrade and if I click on “Edge Reports” it shows a very useful table that gives the total shares outstanding for the past couple of years and an estimate for the next two years based on management comments and what they are currently doing. TD Waterhouse has a similar function.
For example, for CNR I see total shares O/S for 2020 at 713M. 2021 is at 710, so I assume 3M shares were repurchased and cancelled. Interestingly, the estimate for 2022 is 688M shares so it looks like they have been buying back more this year.
I love to see the share count go down and the dividend increase each year, even if the share price does nothing. It helps me hold on and accumulate the stock even in a bad market. This has been rewarding. As a last resort you can look on the company web page or even email them your question. Usually you will get an answer.

Q: In my previous question, you commented on places to be if the market looks forward to the end of a recession later this year. In that context, can you also provide good sectors and stocks (trading on the TSX) that are good places to hide out in during the recession / for the period leading up to it (i.e. from now to the end of the year)?

Q: On July 14 you answered a question from Donald about share buybacks. However, the screener you provided a link for was apparently for US stocks only, and required a monthly subscription.
I am interested in specific buybacks for a limited amount of Canadian companies. I can of course see in announcements that an NCIB has been approved and such, but is there any way to know whether or not they actually are buying back stocks? Must I wait for a quarterly or annual report to find this out after the fact, or is there somewhere I can go to see purchases?
I do know that the amount of stock they have would be reduced, but wonder if the actual share cancellation happens at the buyback, or at their leisure sometime later?

Thanks PK

Q: As we progress through the dog days of summer and possibly approach the winter of our discontent, the number of questions being asked of 5i seem to be lower at this time. Is this a summertime normal occurrence? Otherwise, is it possible that the number of questions asked day by day could be a useful metric of investor interest in the stock markets. If so, then as the number of questions increase, could this indicate that the market is in the road to recovery. This would not be a “bet the farm” metric but would appreciate your thoughts on the matter.
Thanks for your valuable service.
Cyril

Q: I recently read that Wealthsimple was firing staff and cutting back on some services. I do use Wealthsimple Trade and have been very happy with its simplicity and ease of use. Should an investor be concerned about bankruptcy for a firm like Wealthsimple as opposed to investing/trading with a bank like National Bank or one of the big banks ?

Q: From my years of investing, I can say that whenever I take a position larger than 5% of my portfolio, I have come to regret it. The larger position occurs either because I averaged down or became so enamoured by the company that I bought more shares. There are so many unknowables about a company that is not run by yourself, that pleasant and surprising adverse events are equally possible. The beauty of the stock market is that you can invest in 20 good conviction companies at 5% position each and really limit the damage of the adverse events. And if you can't find 20, keep the powder dry for the next nice find.

Q: New retiree caught with pants down. Need to sell some stuff in RIF to cover current cash needs. Horrible position to be in with current market. Lesson learnt. Maybe (tough to be on the sidelines in a bull market)
Please help with sell sequence, which I guess should be based on which of these holdings is least likely to see near term growth from here OR which is most susceptible to further declines in near future??

Please list in order starting with the holdings you think should be sold first, ending with the holdings you think should be retained longest, and advise your rationale. All will need to be liquidated by mid 2023

Your crystal ball will be better than mine.

Thanks,

Jim

Q: Hi Peter and team,

What is the reason(s) for the excitement in the market this week? Do you think the sentiment was changed fundamentally this time?

Best,
Matt

Q: Hi 5i,
this question is about stock Beta and standard deviation.
Do you think these metrics hve practical use?
If yes, which stock Beta and Standard Dev. would you typically use (3 Years?).
Do you know where I might find 1, 2, 3, 4 and 5 year metrics for these.
Your web site reports Beta but, what year is it reporting?

Q: Why would anyone buy Advantex Marketing International Inc? It has zero employees, it has a P/E of -0.3, no dividend nor potential of a dividend. And yet the stock seems to be trading, all-be-it between 1 and 1.5 cents a share. What could people possibly be hoping for when buying this stock?

Q: Hi,
I find it useful for me to monitor certain ETF ratios as a way of seeing whether or not rotation is taking place - such as: IWF:IWD - to see if growth is being favoured over value, as an example.
I have a harder time understanding the concept of 'credit spread' with regards to the bond market and am wondering if there might be a pair of ETF's that could be used in a similar way to show a ratio that indicates whether or not corporate or junk bonds are being favoured - possibly LQD:JNK?
Is looking at a ratio such as this a good way to track it? Would it be better to just monitor the difference, as a percentage, between the two ETF's over time?
I'm open to your wise counsel, as this isn't an area I have any expertise in - and I am finding it hard to educate myself on it with any confidence in some of what I am reading on the wilds of the internet.
If you feel this is something to benefit others, feel free to make it public.
Thank you,
Dawn

Q: Hi 5i,
Do you know where one might find several years worth of MFRP's for Canadian listed ETF's? I can find last years and current year but no others.
I am interested in seeing how the sector allocations have changed over the last 5 years for VDY.TO and XEI.TO ETF's. Hope you can help.

Q: Is there a good reference site that provides current forward consensus estimates of the Bank of Canada 5 year Bond Yield over the forward rolling 5 year term?

When trying to estimate/guesstimate forward BOC-5 rates for preferred resets do you have any suggestions on how to reasonably estimate BOC rates? I know rates change and forecasts are subject to unknowns but I'm looking for a reasonable tool to use estimates of future reset dates.

ie. current consensus for Apr.30/2023, December 31/2024

Q: Hi

You have previously ok’d JEPI as an income etf.
I already own JEPI and am considering JEPQ. As you have pointed out upside is capped due to the covered calls. BUT I like the income stream.

Would JEPQ be a good complement to JEPI?

And are the payouts something that can be counted on …. Barring some unforeseen calamity ?

Thanks.

Q: Just curious your thoughts on getting tech exposure. Could you please provide your preference (not individual names) on a basic etf like TEC or the covered call strategy? Pros and Cons of each one if you could please.

Q: I think it could be helpful to have timely access to insider trading - would you agree? Is canadianinsider.com a reputable source? I went to their website and it is cluttered with advertisements and looks a bit bogus.
Thanks for your comments!!

Q: In your article Stock VS Bonds you wrote:
Investors theoretically should have an exit target price in mind when making a purchase.
Can you explain this a bit more? Would you give an example? Maybe with SU?