Investment Q&A

Q: We have all seen bidders or sellers put in (bids/asks) prices 10 to 20% either below or above yesterdays prices. How effective is the practice?
As always thanks for great advice.
Clayton

Q: You mention that whenever there is a big drop in share price the ambulance chasers come out and try a class action lawsuit. I have seen it in many stocks lately. How often would you say that the lawyers see something out of it or do they just fade away when they don't get enough people to sign up? Or the share price bounces back making the lawsuit useless.

Q: Is there a summary of Canadian Closed end funds that is available to view? Years ago, Financial Post carried a daily summary of this sector, but I cannot find that anymore.

Q: Any beaten down stocks that are in that state due to tax-loss selling that you'd be interested in at this time?

Q: Is there a ‘best time’ for tax loss selling? Many Chinese stocks are candidates for this but will everyone pile in on the last week of December, driving the price even lower? Vs everyone buys them between now and year end , as they are considered ‘undervalued’?

Q: I have a CDN RRIF account and also US RRIF which TD seperated . Can I transfer Canadian Cash from Cdn to US RRIF with no tax implication approx 10,000 US to take advantage of stocks I would like to purchase or do I buy from Cdn account and TD will transfer to US RRIF. Money wise which way would be better. Tks 5I

Q: If I purchased company "A" at $40.00 with a 6% Yield.
Since then, company "A" has gone to $60.00 and the Yield looks close but frankly I have forgotten.
Is the current indicated Yield based on the Share or on the Price ?

Q: Could you explain "goodwill" to me please.

Today on BNN Ross Healy was commenting on NTR and indicating that 60% of it's balance sheet was goodwill. I have googled it and am wondering if part of the answer is the customer base and the related contracts. If goodwill is intangible, then how to you come up with a number?

Is this 60% number something to be concerned about?

Thanks...Steve

Q: Hello,

I am in the process of converting my RRSP into a RRIF.

I also have a USD-SDRSP, would you know how the conversion of a US based account works?

Thanks

Stephen

Q: Dear 5i,

can you suggest some valuation metrics/ratios one can consider when trying to get an idea of a companies valuation when the company in question doesn't have any positive earnings? Can you also please give ranges from expensive to cheap one can use a rough guide. Is Price/Sales a good one to use?

thanks

Q: When is is tax like loss selling generally finished? I’m looking to buy a stock that has declined for the better part of this year and has good prospects for next year.

Q: In response to "Cacey on October 25, 2021" TD Webbroker has added an excellent section dedicated to analysts where they are all rated on percentage of wins and their percentage return. TD has recently made improvement to Advance Dashboard to those of you who may have given up in despair.

Q: There's a TSLA.TO stock. Which shows Elon R. Musk as CEO. It's quite cheap compared to the US Stock. Are they the same? Is buying the Canadian version safe?

Q: Is there a Scorecard or Rating Agency, that tracks the long-term performance of different Rating Agencies and Analysts ?
On the extremes; "T" has a 50% + spread in target prices, maybe rightfully so.
The different Poles here, are two widely used Analysts. One of which is to be vastly proven wrong, pending they scramble to adjust.

Q: Can you please clarify for me the following:

In terms of dividends, there is an "ex-dividend date", and a "pay date".
If one owns shares as of the ex dividend date and sells before the pay date, does one collect the dividend anyway?

Appreciate your help.

Q: My 28yr old son is looking to build a diversified ETF portfolio with 100% equity exposure with a bent towards growth given his long investment horizon.  These will be spread across his TFSA, RRSP and Non-Registered accounts.  Since he will be contributing smaller amounts on a regular basis a zero commission platform such as Wealthsimple is appealing.  However, they charge 1.5% fee for all currency conversions making it only practical to hold Canadian traded ETF's.  As a result he is considering the following:

ZSP 40%
XIC 25%
TEC 20%
VIU 10%
VEE 5%

ZSP + XIC + VIU + VEE together create a mix of ETFs that are globally diversified and very similar to the structure of XEQT/VEQT.  Versus XEQT/VEQT This portfolio has a slightly lower weighted-average MER at 0.16% and also has 20% in TEC (in place of something like QQQ) which is more growth oriented. Here are how the sectors would be weighted with this portfolio:

Info 31%
Financial 15%
Cons Disc 11%
Industrial 9%
Healthcare 8%
Communica 7%
Cons Staples 5%
Energy 5%
Materials 4%
Utilities 2%
Real Estate 2%

These would be the top 10 holdings with this portfolio and these top 10 would account for 24% of holdings in this portfolio:

AAPL5.1% MSFT4.9% AMZN3.2% GOOGL1.8% FB1.7% GOOG1.7% TSLA1.5% SHOP1.4% RY1.2% NVDA1.2%

If this was you at 28, can you please comment on
- are the 5 ETFs he has chosen ones you would go with given his objectives, if not, what changes/substitutes would you make along with recommended % allocations?
- is his % allocation across the 5 appropriate or would you make changes? For example I thought there might be too much overlap between ZSP and TEC as they are both highly invested in AAPL, MSFT, AMZ and FB and he is looking at 60% going into these 2 ETF's. That may well be what you want at his age but  I wonder if he is better served by reducing ZSP to 25% -30% and TEC to 15% and add  the remaining 15-20% to CDZ or VGG (or something else?)
- given he will be making contributions to his TFSA, RRSP and Non-registered, which ETF would be best in which account and why? 

Thanks for all your help, 
Scott

Q: Hello 5i
I have been selling options on the US stocks that I own to make a little extra money. IMy question has to do with buying back the option. I think what I do is ok but I want to check with you in case I am missing something. If I decide to buy the option back before expiration date, if I have a feeling that the stock price has a good chance of continuing to rise.

I check to see how much I made with the premium and combine that with the difference now between the strike price and the current value of the stock.. For instance, Costco at a strike price of $460. The stock is now $477, for a difference of $17. Then I check how much it will cost for me to buy the option back. In many cases, I will get pretty close to the original premiums,, say in this case, $210 rather than $250. Then I can sell another option. The only downside that I can see is if the stock price should decline after buying back the options. I would only do this, of course, with stocks that I wanted to hold anyway. Any problems here?
thanks for you service

Q: Hello Peter,

I am learning how to build a position and would like to know how one should go about it.
In this case, I waited nearer to market close to buy AMD. As the price kept going up relentlessly, I decided to buy half a position.
I was aware that it was near the 52 week high and that it was going to report after 2 trading days. So the chances of the price retreating before that was not going to happen. Am I correct to assume that?
And now for buying more to complete my position. Should one do it immediately tomorrow, the next trading day or should one wait for the earnings report and buy once the trend is confirmed?
Thank you in advance.
Regards
Rajiv

Q: Hello. I would appreciate your opinion about the merits or otherwise of investing in CDRs as a way for Canadians to hold an interest in US stocks - particularly the high value tech stocks. Is there any particular risk in trading through the newish exchange offering these investment vehicles.

Q: A recent guest on BNN market call (Blackswan Dexterios) mentioned use index overlay to protect on the downside. Being in the sales game it is portrayed an the sprinkling of magic dust. Going under the hood they are obviously making the use of options.

What specific strategies involving options do you feel are useful for this type of strategy ? Buying or writing calls or puts or any strategies such as straddles etc. What are the pros and cons?

Thank you,

Paul