Investment Q&A

Q: As I grow older I find myself more risk adverse. You receive many questions regarding going to more cash when one fears a market correction and you claim, and I agree, that market timing is very difficult to pull off. None the less I am fearful of large loses similar to those encountered 10 years ago.
Now to my question. If one is investing for income, as I understand it, if the dividend is safe then a capital loss while not good can be tolerated with the hope of recovery because of the steady income flow. I am setting up a RRIF and am concerned about equity draw downs from a recession as well as increasing interest rates. In conclusion an income investor should be able to sleep at night knowing there is a steady income stream. I am trying to generate a 5% annual dividend stream. Thank you.

Q: Hi,
If I were to buy & sell options as a strategy to create a monthly income flow, would any proceeds (profits or losses) be considered as Capital Gains or Income for income tax purposes?
Also, if trading options, is there any consideration to be aware of in regards to option-able stocks that pay dividends?
Thank you.

Q: Hi Guys,

Inside my portfolio, my consumer cyclical weighting is over 20%, please rate best to worst;
GIL, MG, BYD.UN, TOY, AYA, CCL & NFI and on the U.S.A. side we have GPC, DIS & HD.
I would like to lower the % to 15%.
thanks,

Jim

Q: 5i

I am 75 years old and have $30,000 DOLLARS of cash in both my TFSA and my wife's TFSA. Regardless of sector weighting how would you invest the funds. Great service you provide for both the educated and less educated investors.

W

Q: Hi 5i team,

Costco has been taking a beating ever since Amazon announced its bid for Whole Foods Market (WFM) three days ago. At the time, it was selling at a premium but today it dropped well below its 200 MA. How much lower would it have to go before you would consider it an attractive buy?
Somehow, I don't see an Amazon-WFM tie up as being particularly threatening to Costco. I would appreciate you view on what the impact might be?
Robert

Q: DOL has a price:book ratio of 398.6 : 1 and 141 : 1 on the TMX and TD
Waterhouse websites respectively. These ratios seem too steep even for a growth investor. Your comments would be appreciated. Joe

Q: The fourth article ("Dividends for the long run")in the last "5 from 5i" by Michael was kind of thought provoking. There was research by Credit Suisse that found that "Cash Cows" (high CFROI/low growth) and "Dogs" (low CFROI/low growth) had outperformed in cumulative shareholder return going back 4 decades. If I understood correctly the thesis seemed to be that performance is a function of expectations versus what really happens and that for stocks that were "Cows" or "Dogs" expectations tended to be consistently too pessimistic which actually ended up leading to better share performance as expectations were exceeded. Are there any Canadian companies that come to mind that you think fall within those two profiles just to help me relate to some real life examples? Thanks,

Q: Hi, I want to increase my sector weightings in Manufacturing and Industrial stocks, plus obtain some Income. I currently hold Barrick ($7K); CAE ($37K); CNR ($58K), Intel ($20K); Pfizer($17K)and Wajax ($10K). Looking to invest $40K more in this area, your suggestions would be appreciated. Thanks!

Q: I have been following AGT as it hits new lows. I am considering gradual purchases (1.5%of portfolio to 4.5 %) if and when the price begins to rebound . I believe their market will grow over the years but wonder what your thoughts are of the company and if you believe a stock price increase will happen over the next 6 months?

Q: We would like to have more exposure to the consumer sector in our portfolio. We are considering adding one of the first three companies and/or adding more to winpak, which we currently hold. What is your opinion?

Q: Re: Paul's question concerning eligible dividends & domicile of company.
Thank you for your response earlier today to my question concerning TRL. I looked at their website, and they state that their dividends are "eligible" for the Canadian dividend tax credit. However, they are headquartered in Bellevue WA. Shouldn't that make them an American company?

On the other hand, they also state elsewhere on their website that they "complet[ed] a qualifying transaction with Alignvest Acquisition Corporation, a Special Purpose Acquisition Company or SPAC." Would that then make them a Canadian company for tax purposes?

Would I need to include my TRL investments on the Revenue Canada T1135 foreign property declaration form?

Q: Thanks for your reply to my fixed income question re: BCE and HR.UN. I was also looking for an opinion on my present holdings which are HOT.UN, FC, ECN.PR.C and KWH.UN. Are they good choices and can you rank the six stocks mentioned?
Thank you.

Q: What is your take on HBC, especially with the value of its Real Estate holding, would it be a worth while investment in hopes that it might spin out part or all of its Real Estate holding.

Thank You
John

Q: Whenever I rebalance my portfolio, I find it somewhat troubling that I am treating a dollar in my RRSP account as equivalent to a dollar in my TFSA account or a dollar in my unregistered account. I am very near to the time when I will be converting my RRSP to a RIF and withdrawing mandatory amounts starting at 5.28% and rising in subsequent years. I will have to pay tax on these withdrawals and my marginal tax rate is not much below 50%. Moreover, I do not expect my marginal tax rate to change much over the remainder of my life. This means those withdrawals will be worth only about half as much to me after tax. Of course, when I withdraw a dollar from my TFSA or my unregistered account I get to keep the entire dollar. So I am inclined to treat a dollar in my RRSP account as equivalent to just 50 cents or so when I am totalling up my total assets and doing the rebalancing. Does this make sense to you?

Q: All of these companies had large drops in value today(Friday)on large volumes. CSU down 1.5% and ECI down 2.5% on very large volume at the day's end. Can you explain this end of day activity? Is it a buying opportunity?
Perhaps a separate question, both LNR and MG took big hits today (Friday), both on large volumes - any ideas as to what caused this? Buying opportunity?

Q: Please advise of any insight as to the weakness in Metro today along with the other Canadian Grocery Store Chains too...

Dave

Q: Hello Your A rating and recent report on Cineplex using the word "Monopoly" got me interested in the Sector. Would purchasing shares in AMC Entertainment be worse, equal to, or better than buying Cineplex given the lower valuation of AMC and scale that AMC has? ceteris paribus on the dividends and exchange risk aside. Thanks very much

Q: Can you give me your thoughts on this company.

Q: Are the prefs (C) cumulative?
Any guess as to when pref divi's might be resumed?

Q: Hello guru's,

I currently hold equal weight in ATD.B and L. Both are off a bit, but no concerns. Question- is there any point in consolidating to one security or it is it preferable to remain diversified.

Bonus question, I have ZCL, OTEX and GSY and are all down 10%. I am underweight in KXS,NFI and SJ. Do you see any point in moving into the underweight stocks, at the cost of the trading fees, in the hope that there is any upside.

I have no problem waiting out an upturn in the market, how ever long that takes.

Thanks as always.

KC