Investment Q&A

Q: Peter, I have finally got organized and opened us accounts for each family members' registered plans - rsp, tfsa, lira. With the current strength of CAD relative to USD, it seems like a good time to increase US equity exposure. I am using Norbert's gambit to transfer funds from CAD to USD accounts. I have a couple general questions:

- do you see this as a good time to increase us equity exposure both from a currency and market perspective?
- would it be best to concentrate us holdings in the rsp accounts to avoid/defer us withholding taxes (or does this matter)? I will be holding some equities (tech, biotech) and some index funds (e.g. ARK)
- on a related note, is there any disadvantage to holding ARK etfs over their Canadian counterparts offered by Emerge (apart from the latter's higher MERs)?

Thanks in advance and also thanks for your great service.

Best wishes,

David

Q: Re Nizar's question about using USD as a deposit for TFSA. I did this last year. NEVER again. I use TD WebBroker. I had called for help and told the cash would be converted to Money market funds and deposited in the TFSA. Problem was the conversion was miscalculated and too large for annual deposit. Covid was happening at the time, and TD reduced Help line hours. I had to scramble to send CRA an explanation for the overpayment. It took many weeks calling the Help line before the extra cash was withdrawn.

Q: In your experience, how do underwriters of new issues "support" the price of a stock once trading has commenced; and what kind of under-standings do parties agree to regarding the timing and other aspects
of this activity? Thank you.

Q: Hello Peter,
In general, what does one do if a stock that was doing very well all of a sudden goes in a downward spiral without any news? I am using Nuvei as an example, but the question applies to other stocks that may experience similar investor sentiment.. Also, what is the best site to get earnings release dates as wells as latest news releases? Thanks very much

Q: With regard to the question about not being able to log in to TD WebBroker, here are two things to try. The first has worked for me. The second is worth trying.
Log in to EasyWeb, then switch over to WebBroker by clicking on an investment account. Log in on your phone using the mobile app. It may be that the inability to log in to WebBroker is due to a DDOS attack on the WebBroker log in, not that the entire system is down, and the banking and mobile log ins are not being hit. As a last resort you could phone them, but given the response time these days, that may be equally frustrating.

Q: Hello Peter,
I hope this does not reduce my credits as it is a general question which i am sure other members would appreciate having an answer... I find overall the TD webbroker has many issues where one cannot log in at times. Today, it has been down a good part of the morning.. What avenues do investors have as we could be losing a substantial sum if we want to sell or buy stocks and the site is down at times.. There has to be some accountability for trading platforms. If these are not the type of questions relevant for this site, please let me know. Thanks in advance.

Q: Why do some stocks not have an options market? Are they not missing out on the benefits of those that do?

Q: Hi guys - when (if ever) does it make sense to sell individual stocks and replace them with a focused ETF? For example, I hold the 3 chip stocks above (though only for about 3 months, so only modest gains) since I expect AI, gaming and 5G to be areas of growth in the next few years. Would it make sense to sell these and replace them with SMH, which holds 25 semi-conductor stocks? These 3 are among the top SMH holdings and SMH holds other interesting stocks like TSM, ASML and MRVL. Obvious downsides are that buying SMH would add stocks that aren't currently doing so well (INTL) and would dilute my concentration in these 3. For a non-professional, part-time investor does this simplification make sense or does it significantly limit the upside?

Q: Happy new year!
A general question. I'm keeping 15% cash in my TFSA. I'd like to spend them whenever the market drops. However they don't generate interest. I'm wondering if there are anything such as bonds that gives me daily interest, or at least short term interest. If so could you suggest what bonds would be a great buy.
Thanks!

Q: Hello
This year, I plan to purchase an emerging market ETF (thank you for the suggestion) for my and my husband's TFSA. My question is - should I put most of the funds in a few lump sums or monthly over a year? Emerging markets seem undervalued compared to other markets and this fund has been steadily increasing which makes me think it will steadily increase over the year.
thanks

Q: My question is about BNSand SHOP which are both in your balanced portfolio.
SHOP trades much more in the US than Canada (1.5M to .2M).

On the other hand BNS trades much more in Canada than US (4.5M compared
to .3M).
Why are some inter-listed stocks trade more on one exchange than the other?

Is it because SHOP has issued more shares on the US side compared with BNS to account for this?
Thanks

Q: I am a fairly new investor and was wondering your thoughts on when to begin diversifying? I own approximately 15 companies, mostly being TECH and Financial. Recently bought NVDA shares and am looking at U, CRWD and LSPD but not too sure when I should approach other sectors and look at companies like COST or TT for example. I would be targeting my RSP in this approach. (Not sure if that matters)

Also, your must own top 3 US/CND stocks for the next 25+ years for a TFSA?

Thanks for all that you do
Nick

Q: The market seems to be shifting to value stocks. I am overweight many tech stocks. Should I sell some of the tech stocks and buy value stocks?

Q: Annual mandatory RIF payouts will result in a negative RIF account balances which will incur high interest charges by the broker. Is this not a general
problem and how are interest charges avoided?

Q: Hello 5i Team

1 – Who decides on what Sector/Industry/Sub-Industry is assigned to a company?

Two companies for which the Sector/Industry/Sub-Industry changed were Altagas (ALA) which changed from Energy/Oil&Gas/Midstream to Utilities/Utilities-Regulated/Utilities-Natural Gas and Mullen Group (MTL) which changed from Energy/Oil&Gas/Oil&Gas Services to Industrial/Transportation/Trucking

2 – I have noticed different providers (TMX and RBC Direct Investing) appear to provide different Sector/Industry/Sub-Industry for the same company – is there not a standard that all data providers are to follow?

3 – TMX used to provide the “Sub-Industry” for companies, but with their revamp of their stock screener, they are no longer providing it. Does your data service provide this information and can it be added to your company information page?

Thank you for the great service you provide.

Q: It seems commodities have risen and many are hopping aboard this train.
However at some point, will we not reach a limit to the amount of appreciation from demand destruction? Not many people have rising incomes which would boost demand.
I speculate that rising commodity prices without rising demand and incomes is a currency play only on a weakening $USD and one that could reverse.
What is an investment strategy that benefits from deflation of a commodity trade not including short-based approaches?
TIA

Q: Peter have you read the article from The Beacon Newsletter re battery storage in California . At location of Moss Power Plant.
Looks like it might provide some investment opportunities in this growing space.
Might not be too many in Canadian market.
Worth a look.

Q: Hey 5i,
Just looking for some clarification. When you reference your favourite growth companies like XBC, WELL, and LSPD in general or against larger cap stocks you usually say they are “higher risk”.

I understand that smaller, younger businesses are higher risk but when you say this- is this more as a “volatility risk”, “default/failure risk”, “downside risk”, “explicitly relative risk against larger caps but you remain very comfortable with the stock outlook”, etc.?

I’m asking since I am in my late twenties and holding these for long term. I actually enjoy volatility since I’m able to swing in and out of the stocks. I just want to make sure that I have this captured correctly.

Q: In past responses to questions about thinly traded stocks, you have cautioned members to be wary of these. How do you designate a stock as thinly traded? Is there a particular daily volume average, and/or a concerning bid-ask spread?

Q: First, Thank you for your insights in the last 9 months, your wise words and recommendations made a big difference in the total value of my investment accounts.

In the bad (but good news) I am now way out of whack in my portfolio, 7 of my top ten positions are in technology. I remember JDS fitel and how I let that position grow to 50% of my portfolio only to have it crash down to about 5% of my portfolio and kicking myself for that and promising myself that I would never get into that position again....and here I am. Then the only great returns I was getting was on JDS and Nortel. Now its on US technology stocks and a few Canadian technology stocks , Lspd, Shop and NVei. I know the right thing to do is to rebalance the portfolio but its hard to say goodbye to stocks that are churning ahead most every day to go to slow movers.

I know to get better returns I have to stretch and bulk up on technology but is that the right thing to do or should one bite the bullet and try to keep a balanced portfolio ejecting part of the strong to buy a little more of the "ho hum steady Eddie" stocks. I guess it boils down to what is the maximum percentage of technology stocks that you think one should have in their portfolio and what is the maximum percentage one should have in one stock.

thanks for the great service, Jean