Investment Q&A

Q: Great new website.

My question is about interest rates. I saw an interview recently discussing interest rate cycles, stating that we have have had 30 years of interest rate decreases, that interest rates have now bottomed and we have begun a long term trend of rate increase. The guest also said that the last long term rate increase cycle was during the 1950s and 1960s. During that 20 year period, the interest payments on bonds were mostly offset by capital losses, resulting in a net return of less than a half of 1 percent annually over 20 years while stocks returned 19% annually over that period. In your opinion, what would be the catalyst for a repeat of this scenario? Does this mean that retirees should shun bonds in favour of stocks even though the risk might be higher?

Thanks and great work

Q: This is just a comment on Connie's question regarding RIF withdrawal.
If Connie doesn't need the cash, withdrawal can be in kind by transferring the security to her cash account. At TD they do it without any charges. Then she can sell the stock at a more opportune time or when the cash is needed.

Q: I have listened to the video twice and activated various functions using double browsers simultaneously . Very impressed with your upgrade. Kudos for a great job. Very powerful tool. Thank You.

Q: Great web site ! I can't see Highs ?
Thank you

Q: Like the updates have reviewed questions and watched Ryan twice, how do I log out?

Q: Where do I find in your website the top gainers per index as mentioned in Adams question this morning?

Q: Site looks great guys! Loving the addition of the top gainers per index, etc. Can you give me review of CRH's earnings release this evening?

Q: I just signed myself up with a cryptocurrency trading platform called coinbase. I'm not that comfortable with the sign up process, feel like I could be susceptible to identity theft because of the area its in. Do you think this is a good choice to use for trading bitcoin. They claim to be the most popular way to buy and sell bitcoin.

Q: Great job on the site update
Stan

Q: So, is it time to move into resource stocks? They are all moving and I don't want to start buying at the top again. Is the rally for real this time around? Which would you recommend in oil, gas, minerals, metals. Thanks.

Q: Hi 5i
Thanks for the service. Certainly worth the investment.

While in my view I maintain a diversified balanced portfolio, a major market setback would be uncomfortable. As you will likely tell by this question, my Investor behavior and potential investment actions are currently suspect. It only took a couple of Market Pundits to turn me into a potential seller.

Without all the tools to see money flows and changing trends and without a pile of time to dedicate in a way that will distill the varying Market Opinions, it does not take much some days for me to think I should be exiting the market to protect against a set back.

I do hear lots about strong and growing earning in the US and a mending economy in EuroZone.

What is the case and evidence currently showing through indicating higher markets and stronger companies performance? (recognize set backs come from where we are not looking and can happen without notice)

Aside from the global Quantitative Easing experiment and nose bleed valuations for some stock prices, what caution signs are flashing for you?

Thanks
Dave

Q: Can you give me some general comments on Ripple coin.

Q: Many thanks to Donald the member who gave us a report on his bitcoin experience. I have been pondering an investment but it does sound very risky and complicated. Especially if one is a bit technically challenged.I think I will wait on crypto currency for a while yet.

Q: Peter and Ryan

Great work
Keep reminding people to stop looking at their bond returns.
Everything equity is going up but people email you about a small loss on their bonds. Smooth seas only last so long and those bonds are there when the storm hits.

Q: I have recently sold my cottage and wanted to know where to invest the money to get the best safe return. I already have reached my comfort level in stock investments so in today's low rate environment where would I find the highest rate of bond gic etc as I plan to retire in 3 years and this money is my safety net thanks.

Q: Peter,

I want to compare performance of various mutual funds on my electronic watchlist. This will involve equity funds as well as balanced funds. I have no interest in bond funds. I will be looking at both small cap & large cap. What companies to you recommend me comparing. I know you like Mawer and have owned various of their funds for a number of years and am very happy with the results.
If specific mutual fund families have a specific successful niche ( ie small cap etc ) please indicate. looking at Canada, USA, non North America as well as Emerging Markets.

Thanks for allowing us to renew at old prices early.


Thank you

Paul

Q: Can you please give me your thoughts (or alternative recommendations) on the following Funds for a 64 year old heading into retirement within the next year.

RBC Select Balanced Portfolio - Series A . (RBF460)
EdgePoint Cdn Growth & Income Port Sr A (CAD). - (EDG188)
EdgePoint Global Growth & Inc Port Sr A (CAD). - (EDG180)
PIMCO Monthly Income A (CAD). - (PMO005)

Please deduct as many credits as required.

As always, thank you for your invaluable service.

Micheal

Q: To help out the member who was asking about crytpocurrencies, I may be able to help. I have been trading cryptos since April. There is definitely a learning curve.

There are two kinds of exchanges; fiat-to-crypto, and crypto-to-crypto.

Fiat-to-crypto allow you trade dollars for Bitcoin (or ether). Bitcoin is the reserve currency; you need it (or ether) to get the other cryptos. In Canada, there is QuadrigaCx. It’s based out of Vancouver, and I think it’s okay. I used Kraken, which is based in San Francisco. I seem to get Bitcoin for about $100 less on Kraken than I see quoted on QuadrigaCx. As best I can tell, Kraken has a good reputation, and I think it also has insurance in the event of fraud. I got a Tier 3 clearance, so I can transfer about $30,000 per day, and about $250,000 per month. In order to transfer, I needed to wire it to a bank in Japan (!), so the wire cost me $50, then another $35 was taken by the bank in Japan. My first transfer took about a week, and I was nervous, not really sure if my $20,000 would actually show up. But it did. My last two transfers have been much slower, about 2 weeks, and I am still waiting for my last. I have heard there has been a surge in activity which has slowed things down.

Once you have your Bitcoin, although you can trade a few cryptos with Kraken, the selection is limited. So if you want a broad selection, you need to open an account at a crypto-to-crypto exchange. I use Bittrex. It has a good reputation. Poloniex used to be okay, but I think they have had some problems recently. I also had to open an account with Binance, which is a China-based exchange because I wanted to buy GAS, which at the time was only available on that exchange. (GAS is necessary for NEO, which will likely be the Chinese equivalent of ether, so hopefully good prospects.)

A few important things to be aware of. First, you should not store your cryptos on the exchanges, because crytos stored on exchanges have been stolen. Cryptos they should be stored on a wallet. A wallet is just a program on your computer to store your cryptos. Be careful what wallets you use, because some of them are scams, and they will steal your cryptos. I use Jaxx. It’s okay, but has been slow to update their wallet for Bitcoin Cash. There are different wallets for different coins. Don’t keep a lot of cryptos in wallets on your smartphone, because smartphones are not secure enough. If you have a lot money in cryptos, use a device like a Trezor. Very secure, and off the grid.

Be careful when transferring cryptos. If you accidentally send Bitcoin to a Bitcoin Cash wallet or a wallet for Dash or Monera, it will be gone forever. Also, the abbreviation for cryptos can vary between exchanges. Bitcoin is XBT on Kraken, but BTC on Bittrex. Finally, make sure to enable all the security options, like two-factor authentication, and make sure you write down and store all the passwords, etc, and store them in at least two separate locations, in the event of a fire.

Cryptos took me a while to figure out, but they have been very profitable for me. If someone is thinking of getting into cryptos, now is a good time, because there is tremendous institutional interest. None of the big money, such as mutual funds, has been allowed to get in, because it is new and undefined, but some ETFs should be approved in the near future, which should push the price up. And the hassles and learning curve is preventing a lot of individual investors from getting in.

I firmly believe crytptos are here to stay; the genie can’t be put back in the bottle. The more I have learned about them, I think they will radically transform the world of finance. But be prepared for major volatility. Every week somebody will say they are a bubble, or a fraud, or a pyramid scheme. Despite all this negative publicity, Bitcoin continues to hit new highs.

Finally, if you are going to invest in cryptos besides the big ones, like Bitcoin, ether, etc, you should subscribe to a newsletter like I did. There aren’t many of them, and they are expensive, but worth it.

Q: Since 5i is not averse to the preferred shares of split corps, here are some notes that have been gleaned from the Quadravest website, listing the ticker symbols of several (not all) of their preferred shares and the approximate dividends:

LFE.PR.B - 6% dividend with no suspensions ever since 2006
DFN.PR.A - 5% dividend with no suspensions ever since 2004
XTD.PR.A - 5% dividend with no suspensions ever since 2009
BK.PR.A - 5% dividend with no suspensions ever since 2006

FTU.PR.B and XMF.PR each suspended dividends for nearly a year during 2009-2010.

I believe DFN.PR.A has the longest history of paying dividends and also the most diverse holdings. Its chart since inception is mostly breathtakingly level, though it lost nearly 30% in 2009-2010.

Q: I am an avid reader on the Q&A daily and find I get most of my thoughts clarified by using the history of the questions. A great service. But I am trying to sort out which investments are best held in an RRSP for my personal situation. I am 67 ,retired with no pension and live on the income from my investments which is sufficient to maintain my lifestyle. I do not believe in owning interest bearing investments because of the low yield/risk relationship and tax treatment. I prefer to buy preferreds from blue chip companies like the banks as my "fixed income" because of the obvious tax treatment. I also like covered call ETFs like ZWB, ZWC etc. for the income and downside risk mitigation. I do not invest in US stocks preferring to diversify into the USA using Canadian companies that benefit from their big US presence(TD etc.). It seems to me that given this situation, holding anything in an RRSP has a tax disadvantage. Any tax on dividends earned in the RRSP is delayed until I take the money out but then I will be taxed at the full rate instead of enjoying the "discounted" tax rate on dividends. ROC is even worse because in a non-registered account I effectively pay capital gains when sold but the ROC would be fully taxable when I take it out.
If my reasoning is correct, it really does not matter much what is kept in a registered vs. a non registered fund. Can you tell me if I am looking at this correctly?

Thanks
Don

Q: Curious if you could recommend a reputable crypto-currency exchange in Canada.