Investment Q&A

Q: The six major Canadian Banks are now at or approaching their 52 week lows and paying healthier dividends. Would you step in now or do you see further price deterioration and which two would be your favourites and for what reasons?
Thank you.

Q: Would it make sense to sell td, and buy SLF, recognising the impending interest rate rise.
Thank you

Q: Re Brenda's comment about TDDI "President's Account":
There is definitely a distinct phone number for holders of these President's Accounts (As far as I know your voice imprint has NO affect on call routing). I am in Montreal and therefore the local # is (514) 289-1272. There could/must be a 1-800 #, but Iam not aware of what it is.

Q: I use the TD discount brokerage. I established the account almost 20 years ago when I was virtually broke. Since then, I've used the phone #613-783-6322 (Ottawa) they've given me. In the past couple of years, I've gone to "President Account" status, still using this phone # (good memory and too lazy to look up phone numbers) and got through relatively quickly. The question I put out to members is whether TD discount brokerage gives this "less wait time" special status based on the phone number you call (in which case now many more people have it) or the phone # you have on file, or is it associated with the "voice print" sign in.
PS. The best decision (albeit, forced between a rock and a hard place) is leaving the "TD wealth advisor" and doing investments on my own with 5i!!!! I'm so truly grateful! I've done far better than I'd ever imagine.

Q: Those who trade with TD should know they have a President's Account for investors with $500K+ or 5K annual commissions. Among the benefits is this - "The President's Account clients have an exclusive Priority Phone Line they can call into which will be routed to an experienced professional with quicker wait times." Streaming and Level 2 quotes is another big plus, and Globe Investor Gold. You may have to ask for it; I don't know why TD doesn't advertise it.

Q: I just became aware of CIPF (Canadian Investor Protection Fund). One Million coverage per brokerage account in case your broker has an issue like bankruptcy theft etc. Would you advise limiting the amount held at any one brokerage less than on million. And once you reach one million do you split the money into two accounts to keep it under. It seems this would make sense to take full advantage of this protection. Similar to limiting the amount invested in a GIC or HISA to $100,000 to take advantage of CDIC... Or am I just being paranoid?
Man

Q: Hello Peter and Team.

I’m an income investor and currently have 27% of my portfolio in cash.

The other 73% is distributed as follows:

US Tech 11%
Oil & Gas 4%
Consumer 8%
Cdn Banks 12%
Utilities 26%
REITs 12%

I’ve been in and out of the Telecoms and think they are somewhat expensive right now. The Cdn Banks on the other hand look like an attractive sector to add to and I can collect the 4% dividend while I wait. I have a full position already in BNS and would like to add Royal and TD. Maybe 6% in each? or should I just stay in cash and wait for a further pullback? I’m worried about the US markets correcting which will just take everything else down with them regardless.

What do you think?

I know I need to work on better diversification but I don’t want to put new money to work just for the sake of diversification as I view this to be a ongoing discipline. Right now the CDN banks are the only thing I see as a strong buy aside from O&G which is interesting but still a little too risky for me to commit new money to vs. the Banks or am I missing something?

Thanks as always for your excellent advice. Scott

Q: Re Gerald's comment today (RY - Royal Bank) and his discovery of D-Series funds available thru RBC. I'm sure you will find this to be true for all banks as adverse to their affiliated Discout/Self-Directed brokerage's.
IE at TDDI (TD Direct Investing) they also offer D-Series funds.
I would suggest though that Gerald check-out their eSeries Index Funds. Out of the 17 listed on their Website 12 have MER's below 1% and NO Commisions to buy/or sell.

Q: Does it make sense to hold td on the american side currency gain/

Q: For James, I too received the TD dividend (and a CXR one) in my WebBroker account showing "Trade date" Feb. 2 & "Settlement date" Jan.31. Because the payment date of Jan. 31 was a non banking day, a Saturday, the next banking day, Monday is the actual credit day to appear in the account. I know banks love to nickel and dime us but had James written a cheque for the 31st on the strength of the dividend being deposited and the bank bounced it because it only showed in the account on the 2nd I believe he would have a legitimate beef. Anyway, any profit made by banks in this fashion will eventually be returned to the shareholders, us, via dividends.

Q: James asked on the 3rd about TD dividend not being paid as he expected. For my RBC Dominion account it came through on the morning of the 2nd. Please share with him (if you wish) as maybe there is another issue related to his account.

Q: As of tonight, February 2, 2015, TD still has not paid its dividend which was promised to its shareholders for January 31st. I wonder if any TD Waterhouse members received their dividends on time? I wonder what TD would charge me if I was late paying them for a loan of $50.00 (roughly the cost of one share)? I wonder if my service provider will record the dividend as being received on Feb when the dividend finally arrives or will it back dated to Jan 31?

Q: Hello 5i team

TD is close to itès high for year. I am up over 15% and it now represents 12.4% of my portfolio.

Would you advise I trim this holding back to 10%... my original allocation

Thanks for all you do

Gord

Q: Peter, with banks earnings starting early December can you give us what to expect from the six banks? Which bank will raise dividends? Do you expect good results and what to watch from their earnings? Thanks in advance as always.

Q: Hi Team. This is a follow up to Carl's question and your answer. "Is it time to start picking away at good stocks?" and you answer "the smart money should start picking at good stocks". I have had TD for at least 10 years. My Financials weighting with BNS and others from your PFs was about 17% 2 months ago. By good stocks do you mean even the ones "in the red" in my PFs or "in the green" because with your guidance I know they are ALL good stocks. I have BNS in 2 PFs and one of them has really gone down due to when I bought. The other down (in the red) but not as much. Thankyou for your on going "KEEP CALM AND CARRY ON" guidance

Q: hello 5i team

read an interesting article mentioning the Graham number for TD based on earnings and book value at $47.47 which means at current prices, the stock is over valued by approx 13%.

Can you comment of this and the Graham Number principles and it's accuracy?

Thanks for all you do

Gord

Q: Kudos Peter and Team !

Besides SLF, could you give some ideas for companies that will benefit in a rising rate environment. Does this include the Banks ?

Thank you.

Q: Hello Peter,
From my understanding, the Canadian Banks typically are considered good value when their PE ratios are under 15. I am noticing that the ratios are getting close to 15 (i.e TD). From a technical standpoint, the RSI is still good (under 70) so am wondering if you would consider the banks approaching full value on fundamentals. I understand there is more to considering full value (ROE values etc), but when the banks approach PE of 15, is it time to reduce the weightings. Thanks for your advice. umed

Q: I hold 6.25% TD.PRK-T preferred shares which will mature on July 31. I have the option of converting them into Series L, non-cumulative, floating rate issue 4.33% + the average previous 90 days T-Bill rate. Can you please advise me if this is a good choice assuming that interest rates may begin to rise in the next 1,2,3 years. Under what market circumstances would the shares drop below the $25.00 PAR value, and would this be a major concern given that inflation is now hovering above 2% and that interest rates will remain at their current levels this year and potentially be on the rise starting sometime in 2015. For a preferred share, can you suggest a better alternative that would provide similar returns but offer a lower risk.

Also is it too speculative to buy ECI now that a takeover offer has been made and even assuming that the takeover does not take place.

Thank you for your advise,

Joseph

Q: According to my G & M watch list, TD has a roughly 34% dividend payout ratio, which seems very comfortable. BMO and BNS, however, both have negative payout ratios of 118 and 134. Does that mean they are making that much more than they pay out? and does itmean they are a better "bang for the buck" than TD? .
I own all three and don't plan to sell any. Just wondering Thanks again for your wonderful service. I can't overemphasize how much I appreciate it.