Investment Q&A

Q: Further to the cash balance question of Oct.10, iTrade has a superior product to the cash optimizer 0.25%. It is the Scotia Investment Savings Acct. run by Dynamic, so technically a MF, symbol DYN1300, min $1000 paying 0.95% (same as TD's ISA).
Tangerine often has special temporary deals for large cash amounts to 500K (current one is 2.5% till end Dec.). I don't deal with RBC but you could probably find something competitive with the above rates if you poked a bit.

Q: The question of what to do when one is worried about the possibility of a sharp market correction often arises. In the past you have proposed increasing the portfolio allocation to cash. As a complement to that strategy, what about tilting the portfolio more toward low beta (less than 0.5, say) stocks? I’m thinking of stocks like L, ECI, CSH.UN, KBL, SJ, SLF. How much protection - qualitatively speaking -do you think that would provide against the possibility of a sharp correction of, say, 10-15%?

Q: Hi, Are there any companies out there that provide advisory services on stocks to short? It can be US based or Canada based advisor but i am interested in shorting US stocks. Can be a newsletter provider as well. I am mostly interested in shorting for hedging purposes either shorting stocks or shorting with options. Thanks

Q: Is there no summary for September 2017 - thank you- Hanna

Q: Hello Team,

I have a regular CDN TFSA, with $43,000 invested, and i have a portion of cash allotted to a USD TFSA with $15000 invested. Between the two i need to generate safely with minimal risk $300 dollars per month? Can you suggest some income producing strategies that could help me obtain my goal? please include some equities.

Are the US and the CDN TFSA'S treated the same for tax purposes, when withdrawing investment income? charge me as a two part question!

Thanks,
Stephen

Q: This is further to the question asked by Maurice on Oct. 10
My brokerage (BMO) converts dividends from US $ to Can. $ for Canadian stocks that pay in US $. I have asked that the dividends not be converted thinking that the brokerage must be making money on the automatic conversion. Can I demand that they not convert the currency? If there any benefit in having them convert it?

Q: Hi
Can you explain to me why this BMO preferred has a 7% yeild? The rest seem to have normal yeilds.
Is there a reference list of preferreds on the TSX? I cannot seem to find any such list on their web site.

Thanks
Don

Q: I am new to this website but really enjoy the Q&A. A lot of people seem to target 5% as a full position, or 20 stocks. Your portfolios target 20-25. Over the years, my target has been 12 -15 stocks, or 7-8% being a full position. No particular reason, other than willing to take a bit more risk and easier to manage a smaller portfolio. In any event, how big would you let a winning position grow before you started trimming back to your original full position? SHOP being the current example of a stock that really took off but is now falling back.
Thanks for your great insight.

Q: Hello 5i crew..Do you have any recommendations on a dividend paying emerging market fund... thanks again...Gary

Q: Will you be making any recommendations on probable 'tax loss selling' opportunities?
Using an example of a recent member question about Peyto Exploration. (I don't own it). The price keeps drifting lower yet it appears to be good value at today's price. is it likely to go lower still due to tax loss selling making it a better opportunity in the coming weeks? Are there a number of other stocks acting this way today that you might 'predict' being a better opportunity soon?
Thanks!

Q: This may have been asked before but is there a link which provides the specific date or month a security was added to each of the model portfolios? Can this be added to the monthly report? Thanks

Q: How do you recommend investors handle cash balances while they are waiting for a compelling investment opportunity? Presently, I use a combination of bank "high interest" e-savings accounts (.75% at RBC; 1% at Tangerine) and the "Cash optimizer" within Scotia i-trade accounts (.25%). How can I do better?

Q: I think I noticed earlier in one of your answers to a question you stated you did not think a Canadian could buy a us based mutual fund.I am looking at buying "IAT" which is a etf based in the US.What is the difference between buying mutual funds in the US and etf's based in the US?

Q: Hi 5i Team,

Happy Thanksgiving! I am looking for 'sleeper' picks to tuck away and look at again 3-5 years from now. Other than GUD which you have been vocal about it being that kind of stock, could you recommend two of your favourites in each of the small, mid, and large cap segments of the market. They don't need to be new, they could just be unloved, unfollowed, or under appreciated. Thanks!

Q: Could you please 5 or 6 forever stocks in the USA.

Q: If I own in a U.S. dollar account,Canadian cross-listed companies which pay a U.S. dollar dividend,do I receive the dividend in U.S. dollars free of any exchange fee and the dividend tax credit?If the answer is yes,where can I find a list of these companies?I have a U.S. dollar trading account with T D.Thanks for your help.

Q: If the Canadian banks can ( total) return 13-14% consistently why wouldn't an investor just target them and leave the rest of the market alone? Your thoughts please.

“In fact, Canadian banks are the only sector/subsector in North America to generate a better total return than Warren Buffet’s Berkshire Hathaway over the past 20- and 25-years, which in our view speaks to the powerful and consistent compounding mechanisms they have been… In other words, based on their history of success, we have a high degree of confidence that they will manage their way through current headwinds,” Barasch said in the note.

https://www.msn.com/en-ca/money/topstories/canadian-banks-can-support-higher-multiples-rbc-capital-markets-says/ar-BByT3ZU


https://beta.theglobeandmail.com/globe-investor/as-long-term-investments-the-big-5-banks-are-hard-to-beat/article4506573/?ref=http://www.theglobeandmail.com&

Q: Like many others, I rely on my stock portfolio for income. Fixed income won't provide it. The possibility of a significant correction seems to be not a matter of if, but when, and the prospect of another 40% drop portfolio value is scary, especially at this point in life. Based on the past couple of crashes it takes 4-5 years of agony to recover.
However with a portfolio of companies having a history of NOT cutting dividends through the market crashes, the income relied on would be preserved, and the recovery period somewhat less painful. So thats the type of portfolio I'd like to see 5i construct. Rosenburg's recent comments on BNN suggest good balance sheet, predictable earnings, low correlation to economy. I would add liquidity, ( I find that a number of the stocks 5i portfolios just don't have enough trading volume).
Whats your thoughts on this strategy? Is there enough of these companies, and suggestions?

Q: Greetings 5i,

I realize you cannot give individual portfolio advice on this forum, but was hoping to ask a question regarding portfolio structure and exposures (rather than on the holdings themselves). However, if this question is inappropriate for the public forum, please disregard. If appropriate, please deduct as many credits as you see fit.

My stock portfolio consists of 30 holdings in the following structure:

- 19 Canadian positions covering all major sectors of the TSX (16 large cap dividend payers and 3 small cap "higher risk" names).

- 5 positions held in US Dollars (all large cap "blue chip" names) for currency diversification and to augment sectors I feel are far stronger in the US (Healthcare, Tech, etc.)

- 4 equity ETF's covering USA, Developed Europe, Developed Asia, and Emerging
Markets (1 ETF per region).

- 2 bond ETF's covering Canada and the US (1 ETF per region)

- No single holding exceeds a 5% weighting

I am 36 years old, debt free, conservative (although not totally adverse to risk), and consider myself a "buy and hold" investor.

In addition to the aforementioned stocks, my portfolio includes GIC's, gold bullion, and a small cash position in both Canadian and US Dollars.

In general, does this structure seem appropriate to you? Do you feel as if I have missed some region(s) and/or investment type(s)? Is there anything you would suggest for further diversification?

Thank you.

Q: Hello - is there a Canadian currency version of iShares 20+ Year Treasury US Bond ETF (TLT) ? If not, do you have a recommendation for reasonably close ETF in CAD ?
Thanks