Investment Q&A

Q: IN YOUR INCOME PORTFOLIO YOU HAVE CPD,CVD,XHY AND THEy ALL HAS LOST MONEY ( - 20%, -4% AND -10%.).Does it make sense to get rid of them?Why have any bond at all?Thanks and season greeting to all.ebrahim

Q: Peter and staff
A great number of my stock picks are based around your assessment of the company and I thank you for all this good advice
In your 3 portfolios 10 of the holdings are down 10% or more for this year.
My risk tolerance red light snaps on when when a stock is down 10% or goes below the 40 DMA.I do look at some factors for the reason but maybe not the right ones.Many times I have sold only to see the holding come back and continue to grow.
What criteria do you use to continue to hold a stock even when you are down a fairly significant amount?
Thanks and have a great holiday and 2017.

Q: Hi Peter and Ryan, I'm just making sure I understand the withdrawal rules correctly in dealing with TFSA accounts. I have some cash accumulated from the payments of dividends during the last few months in my TFSA. Am I allowed to withdraw say $2,000.00 in cash from my TFSA account in the next few days (before December 31). Then after Jan 1st, 2017, does my new limit for 2017 become $7,500.00? If so can I transfer (in kind) shares from a cash account worth $7,500.00 into my TFSA without issues? Thank you so much for all you do and all the best in the new year. Mario.

Q: A member wrote: "The CHIP was at 4.74 at the time (I can't remember where I got that number but it was accurate) and assuming interest rate increases, after 10 years, the CHIP had grown from an original $44,000 to $289,326." I don't have my scientific calculator, but this seems most unlikely. Under the rule of 72, even with a 8 percent interest rate, it would take nine years to double the amount, not a 16 time increase, as is claimed here for 4.4 per cent. Where did I go wrong?

Q: Im a 74 year old male in reasonably good health, my RRIF minimum withdrawal is about $26,000 per year. I want to keep 4 years, about $100,000 risk free as in GIC's where could i invest the other $360,000
so i can make a reasonable 5% return.

Q: I occasionally see a reference or a prediction in the financial press to "it would boost S&P earnings by US$10". Since I'm pretty sure that both S&P as a company, and the companies in their indexes, all earn much more than $10, what are these authors telling me? Thanks! James

Q: H i Team, I have google alerts set up to send me emails pointing me to news stories, reports, releases, etc. regarding the various companies that I want to follow. More and more, I am finding, almost all of the alerts I get are links to reports churned out by robots (ie. wall street confidential) that really don't seem to provide the insight that real analysts and reporters can provide. My question is weather you or perhaps any other subscribers know of a way to filter out the robot links while still receiving company stories, news, reports etc. that real people (all be it potentially biased) wrote. One thing that I can count on every day is excellent, non biased answers to questions penned by all of the real caring folks at 5i!! Thank you!
John

Q: In response to a question about reverse mortgages from Deborah, I recently worked out a spreadsheet comparing a reverse mortgage (CHIP) with a secured line of credit. The CHIP was at 4.74 at the time (I can't remember where I got that number but it was accurate) and assuming interest rate increases, after 10 years, the CHIP had grown from an original $44,000 to $289,326. The LOC at a current 2.94%, grew to $176,500 a difference of well over $100,000. CHIPs do offer a good product but it's not the only one and they are expensive. Many seniors (me included) find themselves with a pretty good net worth but with a problematic cash flow so Deborah's question is appropriate.
Both scenarios on my spreadsheet included a $1200 monthly income. I am also aware that my calculations are approximate. An actual program could work out interest calculations more accurately depending on how they are applied but that would weight even more in a secured line-of-credit's favour I would think.both scenarios on my spreadsheet included a $1200 monthly income. Sorry about that. I am also aware that my calculations are approximate. An actual program could work out interest calculations more accurately depending on how they are applied but that would weight even more in a secured line-of-credit's favour I would think.

Q: Overnight it would appear that this fund has lost 7.73% of its value.
Would this be as a result of a special dividend paid but not credited or has its net asset value dropped significantly and abruptly?
Dave

Q: Hi. I love the information you guys give. This might be out of your expertise but I have been trying to get the scoop on these reverse mortgage es I see advertised. No one seems to post the costs and no double the traps involved. Do you know where such information can be found.Thanks and Merry Christmas. Debbie Hendriks

Q: I am doing some sector adjustment in my portfolio and would appreciate your input. I have 5 REITS (ap.un, fcr, sru.un, nhw.un and car.un) but only 1 utility (BEP.UN). I am considering selling First Capital (FCR) and buying either Algonquin Power (AQN) or Altagas (ALA). I am looking for income with enough potential growth to compensate for any cost-of-living increase. Do you agree with my choices? If not, could you propose alternatives. Thanks, as always.

Q: I am a senior and a long time dividend investor. I have found that patience and having some cash on hand to buy bargains have paid off handsomely over the years. When stocks go down, dividends go up and I simply buy more. Eg. BMO@ 56.00, Sunlife@19.00, Fortis@29.00 etc. Except in rare instances (Manulife) the dividends just keep coming. I mostly agree with everything John Heintzl says in his G&M columns. Recently he wrote "I supplement my dividend holdings with diversified ETF holdings". Can you suggest some specific ETFs to balance & diversify my Canadian large cap dividend stocks?

Q: In the wake of my significant losses on CXR and Seeking Alpha being 'right' on that and Valeant, the report on PLI worries me. Are there any recent examples where Seeking Alpha got it dead wrong on a company they issued such a reports or reports on?

Q: I am looking ahead to my 2017 TFSA contribution in early January. Please provide 3 or 4 of your top growth picks (in order of preference).
Thanks as usual for your great work. RAM

Q: FORWARD EARNINGS: In one of your replies. you stated" TD we believe uses trailing earnings, and we have seen this issue crop up before. On a forward earnings basis, MDA trades at 11.3X earnings. We believe the future is more important than the past." What are the best web sites for us retail investors to view forward earnings for companies of interest?

Q: Many of your suggested stocks for the income portfolio such as ABT and BEP.UN would have Graham and Malkiel shivering in their boots. My own portfolio has stuck more or less to their tenets but your suggested stocks in many cases have some of their fundamentals quite off the mark. I am worried that in a strong downturn these may not survive for a long haul such as what happened with many gold mines.

My question is, should I have faith (which is why I signed up with you) or hold a limited position in these types? I hold a well diversified portfolio with a goodly amount in GIC's. Thank you and happy holidays.

Q: Hi: I'm new here. Are the stocks/ETFs listed in your model portfolios to be considered "buys" at current levels? Thanks.

Q: My question is about your take on reinvesting dividends.

I now have enough in my income portfolio to reinvest into buying whole shares. All things being equal (without dividend reinvestment policy by the company to buy at a discount), should I enroll in an automatic reinvestment plan that my broker offers or should I accumulate enough and then make one time purchases throughout the year when it's on a dip or something?

Q: Do you prefer:
(i) the 3 ETF Canadian Couch Potato Portfolio (VAB, VCN, VXC) (ii) the 11 ETF Canadian Money Saver Portfolio (CBO, XBB, CPD, XIC, CDZ, XGD, VEE, VE, SPY, VIG, IWO; or
(iii) something in-between?

Also, do you have any thoughts on Norm Rothery's Hot Potato (a take on the Canadian Couch Potato
- http://www.moneysense.ca/save/investing/spicier-couch-potato-portfolio/ )

Thanks!

Q: Just as a follow up to the questions on discounted drips vs synthetic drips; a new concept to me. I have checked with my online broker; Bmo investor line, and they automatically enroll in discounted drops when available, so no need to go through each company to take advantage of this. Just wanted to share this for other Bmo users.

Cheers,
KR