Investment Q&A

Q: Under Investment Q & A, as an example, Target price history - PYPL, current high target price $118.00, the deviation (line with dots) recent 13.9 -- can you explain what this indicates.

I am a long term member and I am noticing the below more than in the past:

A lot of questions have "take as many credits as needed". For instance, the longer the question the more credits are required or the more research done the more credits required, or the more companies asked about the more credits required? Please advise.

Thank you
Appreciate the years of good service.

Q: A question regarding interest rates and the effect it has on income stocks such as those in the Income Port.

Much is currently being hypothesized about interest rates going forward. Not about higher or lower, but the amount of cuts and how long it will take to get to a neutral rate.

That being said, if rates were to drop by 2% over the next year, and all else being equal, maening no black swan events or a deep recession, to name a couple, what correlation would you assign to stocks which have been beaten up during the 4.75% increase to the BOC rate? A 2% cut in rates is a 40% reduction, in the rate.

I assume that with falling interest rates, money would flow back from savings accounts, GIC's and the like. Stocks like BCE, T, ENB and the banks and utilities or any that are currently yielding >4% should see some attention, no?

Thoughts?

Thanks,

Kelly

Q: Hi Peter, Can i transfer stocks from RESP to kids TFSA account without selling and rebuying?

Q: Hello and Happy New Year,

Can you please provide a simple ETF portfolio for the average middle-class Canadian, with no private pension, and who has some time to watch the markets but not a lot, and who just wants to commit to a dollar-cost averaging investing plan for the next 20 years?

Thanks,
Robert

Q: if you had a considerable amount of cash to invest now, would you invest it all or would you take a staggered approach considering the run up we have just had? if staggered, over how many months would you invest it?
thanks and happy new year

Q: Happy new year: today there was a question from a person that wanted to move “in kind” from a rif to a tfsa. What is the advantage to this move? My first thought is that a full amount of taxes would be held back when closing the rif?
Thanks

Q: As the year starts it is time for retrospective. Could you compare and explain the performance difference between the three 5i's portfolios since inception? Should we expect the ranking performance to be in order growth/balance/income? Time period may be too short. Please give so e clues that would help me understand.

Thank you to the wonderful team.

Q: do you have any guidance on rules to follow for tax efficiency? I came across a chart from one of the magazines (either money saver or ETF update) a while ago that was very handy but I can't seem to locate it.
thanks

Q: Hi
I know that this question is almost impossible to answer and it is anyone's guess but what is the end game for this mounting debt in the US? 34 trillion? Perhaps 10 trillion of that is domestic? Still a stagering number. GDP is 26.24 Trillion with that volume it sounds manageable but they and other goverments dither about, eventually kicking the can down the road. At what point does this come to a head in your opinion? Perhaps a year or an event that you see as an epoch?
Thank you
J

Q: I have a number of quality companies/stocks in my non registered cash account which are below my initial purchase price. Am I correct that transferring into my TFSA will trigger the capital loss? If so, any down side I should be contemplating? I have sufficient room within the TSFA.

Q: This is a general market question. I hold too many companies in my equity accounts and would like to reduce the number. On the other hand, my overall portfolio is up more than 11% over he past 3 months. I am overweight financials but I see them as benefitting from potential rate drop. Most of my holdings are growth oriented. I do hold approximately 15% fixed income, short and longer term bonds.

What would be your overall approach given potential rate drop and anticipated slow economic growth? 90% of my holdings are for long term. 10% are trades.

Take as many credits as required.

Thanks for all your help.

Mike

Q: Good Morning 5i Team,

1. Is the capital gains tax the same on CDN and US stocks in a cash account?
2. Does one pay more tax selling US stocks with no dividends in an RSP or cash account?
3. Are the dividends from preferred shares eligible for a tax credit? Or does it depend on the offer?

Delete question credits as required.

Thank you and keep up the great work.

Q: Cheers to 5i for the New Year!

Bloomberg December 29, 2023:

"Dollar bears - A weaker dollar is the expectation for 2024 of most analysts surveyed by Bloomberg amid forecasts that the Fed will lead the way among rich peers in cutting interest rates and that a soft landing in the US's economy will encourage investors to seek risk away from its shores. But strategists at JPMorgan Chase and HSBC are among those who reckon the greenback could still strengthen because the rest of the world will end up needing to reduce rates more to aid their economies. "

https://www.bloomberg.com/news/articles/2023-12-14/usd-will-surprise-again-with-strength-as-global-economic-slowdown-looms

Q For 5i: Thoughts on weak $USD thesis relative to $CAD in the short, intermediate, and long term? Do you believe the US FED will cut further or faster than BOC? How does the 5i team see CAD/USD going forward.

i.e. if owning both USD and CDR versions of the same equity, where could one consolidate into, etc.

Q: Today is the last day for tax loss selling they say. Is this only for stocks or also for options' positions? Should one sell one's positions even if the option expiry date is in Jan to take a loss and re-enter in Jan 24? New to the options writing. Sorry for posting this question during this holiday season. Answer it if you deem this as urgent.
Happy Healthy Peaceful and Prosperous New Year!

Q: I am concerned about the US political situation. Should Trump manage to win the upcoming election and the US loses its democracy, I fear that this will not be good for the financial markets. Do you know what the results were in other countries that elected far right political parties? I have a sizable portfolio that is almost 50% weighted to the US. I would like to know how to prepare for this possibility short of selling all our US investments. Thank you

Q: Do you think there will be a dip first week of January when people take some profits and don't have to pay the taxes until 2025? Should one sell some stock if they're in registered accounts next week and take advantage of this?
Thanks

Q: Hi 5i
You recently answered this question from Steve:

Recently a couple of younger friends (mid-60's)have just converted their RRSPs to RRIFs. Except for the possibility of needing the cash flow, I can't understand why they would want to convert to a RRIF.

Am I missing something? Are there advantages to converting early?
~~~~~~~~~~~~~~~~~~~~~~
Another reason his friends may be doing this is long term tax planning. Quick example, a couple in their mid 60s each has 500k in RSPs. If they were to both die suddenly that $1 million all gets reported as income on one return and most of it is taxed at over 40% (in BC the amount over $241k is 53.50%). To avoid this, the couple would need to live long lives and gradually draw the money out. But because none of us know when our time is up, they could take some out now in the 20% or 28.2% tax brackets (BC rates). The winners will be the kids and grandkids, the loser will be CRA. So by taking money out before 71, they are increasing the years when they can take money out at less than 30%, and reducing the potential giant tax bill at the end. And if they have not fully funded their TFSAs, they can use this money to top them up. Then going forward their interest, divs and cap gains aren't taxed. In the RSP or RIF, they will be taxed on all 3 when they take it out.
Greg

Q: Good morning, Which Stocks do you guys believe should benefit the most with the rising cost of living and many people having to turn to cheaper retail and grocery stores for example. Would stores like Costco and Dollarama be a couple of obvious examples, thanks?

Q: A family member of mine is looking at investing some money that will serve as a retirement fund/as a hedge against inflation. She is also investing some money in GICs as the rates are presently good, while simulatously serving as an insurance policy should markets take a dive at some point. She is approaching 60 years of age and will be retiring within the next 12 months. She has no interest in investments and we believe that ETFs are the answer. This individual is conservative and wants to minimize risk, while definitely wanting to beat the guaranteed interest rate we get of approximately 5%.

One family member suggested the following ETFs (mostly due to the low cost of fees I believe)

VOO, VEQT, QQQ and S&P500 (which I don't know, supposedly has .05% fee)
(and suggested that 20% goes into QQQ)

Looking at your recommendations for ETF's from the questions asked, I have seen XIC, SPY, CDZ, XIC, CDZ, XGRO, QQQ, VGRO, VIG, ZSP, (to name a few).

I think there are more ETF's than there individual stocks. It would be great to have some coverage across Canada and the US.

We have a few questions:
1. Do you think the list provided by the family member is acceptable?
2. Could you provide your recommendation of ETF's (with a short description of the ETF) that fits the risk level of the mentioned individual (while simultanously providing a little risk). What % of each ETF would you recommend (i.e. buy equal amounts of each of the recommended ETFs or ...).
3. Do you believe that it is the right time to buy ETFs. With the recent run up, is it preferable to wait for a pullback and buy on dips or acquire all today or .....

Please deduct as many questions as deemed necessary.

Thanks.

Q: I realize you are not tax experts but I am confused from info obtained from bank and CRA web sites. I am 69 and wife is 59. I would like to split income from RRSP (not RRIF) with her when I withdraw some funds this year to pay for house repairs. Some sites indicate that RRSP withdrawals do not count as pension income. Does this mean that I can’t split it with her? CRA seems to say that RRSP (T4RSP) is eligible. Confusing!

Thoughts from you and members would be helpful.