Investment Q&A

Q: My daughter is starting a TFSA account with $20,000 to invest and a 5-10 year horizon. She wants a balanced portfolio with moderate risk and room for growth and dividend income. Based on some of your recommendations she is thinking buying the above combines in equal weight. What would you add or subtract from this list? Should she try for more sector diversity?

Q: "We are not tax experts, but it is generally wise for dual citizens to avoid TFSAs" This was your response to an Oct 25 question. I have been contributing to a TFSA since they started in 2009 with limits soon to exceed $80,000. There is some paperwork required as the Americans consider TFSAs a 'foreign trust' rather than a self funded, self directed investment vehicle. The paperwork time is worth the investment advantage. Some general guidance from US tax accountants would be beneficial to your subscribers with dual citizenship and those filing US tax forms. I use RLB with offices in KW/Guelph (Jeff Hood is the US tax person)

Q: I want to put money into TFSA's in the New Year. Thinking of transferring shares of BEP.UN from open account to TFSA's since they do not receive the dividend tax credit - but wondering if this is a good idea or bad for taxes?
It will trigger capital gains - but any stocks transferred from open to TFSA will do the same.

Q: I WAS THINKING OF DOING THE FOLLOWING: ONE, WITHDRAW $20,000.00 FROM THE CANADIAN TAX FREE SAVING ACCOUNT THIS YEAR. TWO, NEXT YEAR TRANSFER $20,000.00 IN SECURITIES FROM US MARGIN ACCOUNT TO US TAX FREE SAVING ACCOUNT. WOULD THERE BE ANY CAPITAL GAINS TAXES? WHAT WOULD BE THE BENEFITS? ANY OTHER HELPFUL INFORMATION WOULD BE APPRECIATED.

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: What type of account is best suited for beginning a position in ECN?

Q: Hi 5i,
I currently use my TFSA as my primary investment vehicle. As such, I've been trying to keep it as diversified as possible which has resulted in purchase of both growth stock and dividend stocks across various sectors. Examples of the dividend stocks include: TD, FTS, and T.

I am close to maxing out my contribution for the TFSA and now find myself in a bit of a pickle as I want to move out the dividend stocks in favor of growth names.

My plan now involves:
- selling the dividend positions in the TFSA
- opening a new RRSP account and re-buy these same dividend stocks
- redeploy the 'freed-up' cash within my TFSA into growth names

1.) Are there obvious pitfalls you can see with this strategy? I can't see any issues other than being a little clunky in execution.
2.) What are your current top-5 growth names (regardless of sector)

Thanks,
Kyle

Q: Any canadian growth stocks looking juicy to snap up currently for a TFSA? Thanks

Q: My granddaughter has a TFSA that needs some increase in real estate and financials weightings. Would you consider TCN and GSY appropriate for a 3-4 year hold or would you suggest some alternatives?
With appreciation,
Ed

Q: Hello Peter & team,

Have an 18 year old who has a little money set aside ($5,000) in a TFSA earning next to nothing. Can you please recommend 4 or 5 good growth names for long term hold. And would you think TOU is a good choice to include?

Thanks for all you do.

gm

Q: I'm in the process of divesting about half of my investment holdings (basically everything in my and my wife's TFSA) and using the cash towards a downpayment on a home. Everything in the RRSPs will remain. This leaves me with basically 1/2 of the investments I used to have (i.e. 10 positions instead of 20).

If not for the downpayment, I would have kept the money invested in the stocks I've purchased in the TFSA and am fairly diversified. But now that i'm selling everything in the TSFA, I'm really not diversified anymore.

What's the better play? Sell some of my existing positions in the RRSP and buy back into the positions I sold from the TSFA so I'm back to being fully diversified? Or slowly buy back the positions I sold in the TFSA and slowly get diversified again? I figure it will take at least 5 years to get my investable cash in the TSFA back to where they are now.

Q: Presently I have this stock in my TFSA - thinking that there is no dividend to be concerned about. Is there a tax drawback in relation to capital gains? Should I move this to my non-registered account?
Thanks so much.

Q: Hi, we have TFSA’s, RRSP’s and non-registered accounts. Where is the best place to hold high dividend US stocks? Thanks, Bill

Q: Hi there,

Looking for top 3 stocks for RRSP recommendations. Still young, and looking for medium risk.

Thanks,

Q: Out of curiosity, if you've maxed out your TFSA contributions, had gains and withdrew, say $100,000, are you allowed to put back $100,000 the next year or only the max contribution allowance?

Thanks

Dave

Q: Hi 5i
In watching the performance of my TFSA, I am not liking the 2020/2021 performance direction and momentum.

The combination of 2020/2021 has been dreadful for holdings such as USA, XBC, STC and QST.....and has significantly affected total portfolio performance.
In the mix are also TF, AQN and FSZ; all for income but was expecting some level of growth.
It was good to be holding ECN but the % was too low to make significant benefit.

With QST and USA both down 60% from original purchase, does one just continue to hold for performance recovery; Business fundamentals and potential take-out (QST) and mine performance and silver price recovery (USA)?

Making a switch from one horse to other has rarely worked for me. Does any of the companies make you say sell and move on or just hold through the already low price positions?


XBC is obviously not expected to reach $11.00 any time soon as the company no longer looks like the one that reached $11.00 earlier this year. They have a good business mix in segments that make sense today. Does one just hold on for Management to get their act together and run off the negatively contributing contracts?

Dave

Q: Hi. I have decided to add an equal position of each of the above to my portfolio. These companies will even out my exposure among sectors. I have room in both my tax free account and my rrsp account. (RRSP won't be accessed for 18 - 20 years) I guess what I'm asking is would it be more advantageous to put any of the above in a tax free account vs an rrsp account?

Q: Moving shares into a TFSA. In general, would it be wiser to move shares with growth potential or ones that generate more dividends into the TFSA?

Q: Thinking of moving some shares from a non-registered account to my TFSA. What would be the guiding principles to follow in such a move?

Q: Please rank the above listed stocks and an explanation for #1? I am more focussed on growth as I have a significant time horizon. Also, which account is preferred for the following? Tfsa or rrsp?

Also these are currently my holdings in my tfsa. Would you sell one of the following for one of the above listed stock, or wait for new money? Thanks

Nick

AQN
TD
WELL
NVDA
SHOP
BAM
KXS
LSPD
PLTR
PINS