Investment Q&A

Q: Hi there,

In the process of transitioning my US 401K from a balanced portfolio to an income portfolio as i get ready to transition to retirement. If you could recommend 5 US stocks or low cost ETFs for income what would they be.

Q: I currently have some cash in RRSP USD and RRSP CAD accounts. I also have some US cash for Non-Reg USD account.

I am wondering how to allocate VIG/VGG/ZDY amongst these accounts to minimize FX fees while also minimizing taxes.

For e.g. if I put VGG or ZDY in RRSP CAD, I believe a 15 per cent withholding tax applies to dividends if US stocks are held via a TSX-listed ETF (yes, even within RRSP account)!

If I put VIG in RRSP USD, I will have to pay the 15-percent withholding taxes on the US dividends.

Please do you have any recommendations on how to avoid paying these taxes?

Also given that VGG is listed in TSX and tracks the VIG ETF in the US, I am wondering whether there is any difference in putting VGG in RRSP CAD account or should I prefer putting VIG in the RRSP USD account (given smaller MER).

Thanks!

Q: What's your view of continuing to hold VIG in the near to medium term? I'm thinking there could be an increasing amount of pressure on it and its constituent companies as higher bond yields are actually materializing and are making VIG's 1.84% dividend look anemic by comparison. Is there an alternative holding/strategy you might recommend in its place during this period?

Q: What is the next ex date for the dividend for both VIG & VXUS ?
Thanks
Dave

Q: I am a conservative investor who would appreciate your recommendations as to the best 5 US stocks/ETFs to own over the next 2-3 years. Dividends are not necessary, however preference is for low risk stock recommendations.

Q: Transitioning my mutual funds to a self managed ETF portfolio of near equal weighting of ve, vee, spy,vig and iwo for all USA and international exposure. I am due for another block of buying. Which of the 5 above would be best to add now. VE and VEE are down so average out my loss? On weighting I was due to add mostly VEE and IWO. Just starting the transition so can add pretty much any of them.

Q: Hey Guys,
Would you buy these ETFs today?
Are there other ETFs you prefer today.
This is for a long term hold.
Thank you,
John.

Q: Thanks for my div. answer. Now with US Cash from my netflix sale to increase my div. income would you agree that buying some US div.payers would be wise. If so please advise some worthy candidates or div. ETF, to stay in the stronger US market. Thanks.

Q: Can you please tell me what the dividend payout % for each etf, as well as their 5 year average return is. Would you equally weight them?
Please deduct appropriate question allocation.
Regards

Q: Good morning, my US equity is entirely in ZWH, VGG, and VIG. Each about 5% of total portfolio. Monthly income from ZWH is convenient for RRIF withdrawals (over 80) but both VIG and VGG have significantly outperformed ZWH over at least the last 2 years. I am thinking of disposing of the ZWH (covered call ETF) and using equal amounts of VGG and VIG to total 15% of portfolio. I have available $US cash to do so. Any other ideas for US equity exposure are welcome.

Regards Ted

Q: I am trying to get more exposure in the US via VIG etf.
These 2 companies are the laggards in my portfolio.
I was thinking of letting them go and buying VIG
You say?
Thanks

Q: Dear Mr. Hodson and Mr. Modesto,

I'm helping a friend construct a portfolio worth $375,900. She is a single mother who is planning to retire in a few years. All her children have grown up and no longer require financial support.

Besides CPP and OAS, she also has some other income from other source and wish to supplement her spending with dividend income from the portfolio. She's asked me to help her to contruct a moderate growth portfolio. She said a yearly dividend income of $10000 will be sufficient.

Now, her trading accounts have:
BCE- 73%, SLF- 12%, BMO - 11%, Cash - 4%

Here are my questions. Please deduct as many credit as you wish from my question credits.

Her new portfolio will generate a yearly dividend income of $12954 (yield 3.44%) from $375,900.

Financial -22% - keep the BMO(11%), SLF(12%)
Utitility -16% - AQN, BEP.UN, H, KWH.UN
Energy -10% - ENB, WCP, PKI or TRP
Consumer -16% - PBH, ATD.B, DOL, TSGI
Industrial -11% - NFI, WSP, TCL.A
Health - 4% - CSH.UN, GUD
Technology - 12%- CSU, ARKW, Please suggest: Nasdaq index?
Telecomm - 6% - BCE
Cash - 3%

My questions are:
1) For a moderate growth portfolio, is the sector allocation appropriate?
2) Do I need to further diversify BMO and SLF?
3) In each sector, do you have any suggestions for the right stocks? Feel free to add or delete.
4) Please let me know which stocks you would recommend to add first?
5) For a person close to retirement age and no experience investing in US, is it necessary for her to invest abroad? What's your opinion?
6) All the above proposed stocks, which growth stocks should go into the TFSA? What are your top 5 picks among the growth stocks above?

Thanks as always
Esther

Q: In my daughter's RESP I hold TD(39%)up 13%, PBH (39%)up 110%, GUD(17%) down 20% and 5% cash.
I still have 9 years to go before the first withdrawal.
I was thinking of diversifying TD and/or PBH. Which dividend ETF (with growth potential) would you recommend?

Q: In our RRSP we hold the above etfs for US exposure. Does 5i see any sector not covered with these ETFs?
Or would you recommend selling any of these ETFs due to too much overlap? We are approaching retirement, but I don’t think that would be a factor in this question. Thank you

Q: I have Student Transportation in my US account. What would be some good US dividend Stocks and/or ETF's I could invest in to replace the lost dividends that I receive when it is sold later this month? I am looking at 3 or 4 stocks and 1 or 2 ETF's.
Thanks for the advice as it is always welcome.

Q: Want to transition the kids RESP to ETFs from the current mutual funds ( cig11465, mfc2710 and aim5510 33% each). Kids are 13 and 15 so University is 3 and 5 years away respectively. I was thinking 50% CDZ and 50% VIG?

Q: Hi 5i,

Can you recommend a Dividend Appreciation/Growers ETF for each of the following regions: CAD, US, Europe, Asia? I would prefer to have all CAD Hedged.

Thx

Q: Hi 5i,

I have 10k in my TFSA that I'd like to allocate to ETF's. I'm still in school so I won't have as much money coming in to diversify through stocks.

I was wondering what would be the best way to allocate (how many, what percentage)? I was thinking along the lines of XIC, SPY, and VIG.

Also, what do you think about investing purely in ETF's?

Thanks in advance,

Jon

Q: I have approximately 2% of my portfolio invested in MMM in a RSP and with decreased share price and current outlook of industrials would it be a better choice to sell and add to either SPY or VIG for the long term ? I would appreciate your opinion.Elizabeth

Q: Peter,
I have looked at the rate of dividend growth of many Canadian companies over the last 15-20 years. There have been many substantial increases. I fully realize that dividends are completely at the discretion of the board of directors and are really dependant on income. However from your time in the business have you seen periods of say 5-10 years where there was very stagnant dividend growth or alternatively has it been more of a consistent upward trajectory? I also am aware of this can vary very much from sector to sector, but am looking more at the type of stocks that would be categorized as dividend aristocrats.

Thank you

Paul