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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: My REIT stocks have taken off in the last month or so as yields have pulled back. Interest rates can’t stay this low for too long as the BOC has already started tapering despite no action from the Fed. Do you think the move in REITs is overdone and should I trim and wait for a pullback as rates slowly rise? Do you think the disconnect between BOC and Fed policy will lead to further appreciation in the CAD?

Thank you,
Jason
Read Answer Asked by Jason on July 16, 2021
Q: I am puzzled by recent share-price movement downwards in homebuilders, especially given the alarmingly low interest rates. Are UShome builders likely to stay in the doldrums for more than a year , do you think? For example, DHI is profitable; has very low PEG (0.54%, I think); reasonably good cash flow; manageable debt &c., yet shares are going down. (Incidentally M/I Homebuilders, symbol MHO, is even better valued!)

My question however is only about DHI. Please give your views on what you think one should do with holdings in DHI if one wants to build a cash cushion to deploy when markets panic and sink. Please ignore tax consequences.
Read Answer Asked by Adam on July 14, 2021
Q: Hi Everyone at 5i! Hope you are enjoying your summer so far! I am looking for a little advice. I hold Riocan in my RRSP and having ridden it up and down, I am now back to breaking even . As you gaze into your crystal ball, what do you think it’s future prospects will be ? I suspect that interest rates will climb and adversely effect the stock price. Any suggestions for a replacement REIT? Or conservative dividend paying alternative suitable for an RRSP. Cheers, Tamara
Read Answer Asked by Tamara on July 13, 2021
Q: Could you explain to me STARLIGHT Investments and their multiple subsets. In Nov 2019, I was interested in the Continuum Reit IPO, but Starlight took over the Reit before the IPO for 1.72B, no small deed !! Where did the funds come from for such a young company, debt only? Are the many Starlight Multi-Family units Closed-end Funds? Limited PartnerShips? Do they have an « expiration » date ? Thanks.
Read Answer Asked by Denise on July 09, 2021
Q: Relative to diversifying my investment portfolio I am considering buying a lot and building a multi unit residential complex where I would rent 3 units and then live in the other. The cap rate for this investment is at 3.5% which is well below the preferred 7%-12% real estate industry baseline. This investment will require $2M in working capital which is about 55% of the funds I have for all investments. Given the dividend rate for a diversified allocation (BTSX) of dividend paying stocks, estimated to be 4%, would you consider this real estate investment to be a good option for an investor?
Read Answer Asked by Ronnie on July 08, 2021
Q: I would like to diversify my REIT holdings geographically. I currently hold a reasonable position in CAR.UN and an overweight position in TCN. I would appreciate any recommended REITS with operations in the USA or Europe that are registered in either Canada or the USA. Is there anything like another another Tricon Residential available?
With appreciation for your great service.
Ed
Read Answer Asked by Ed on July 05, 2021
Q: Back in this April I switched GRT.UN over to SMU.UN after GRT.UN's unit price had gone stale. I did reap the benefit of 25% gain from a 2 year hold. This switch is only supposed to be a temporarily move as I was waiting for better other opportunities. However, SMU.UN went up by 18% since then (in only a bit more than 2 months) and I wonder why so much and so quick for a REIT?

My question is that SMU.UN gain for real? Why the big pop and will it hold, or I should jump ship at the next opportunity? I'm not complaining about this windfall, but it's too much too soon and there is no such thing as a free lunch from heaven? Right? LOL.
Read Answer Asked by Victor on June 29, 2021
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