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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I would like to add a mix of income stocks to my portfolio (for a 5-10yr hold) which has been primarily growth oriented and comprised of a number of 5i’s BE Model Portfolio names.
a) Could you please rank the above listed stocks for dividends with preference for long term yoield of at least 4-5%, and growth back to YTD highs over the next year or two. Moderate to high risk is okay.
b) List any particular concerns you see with any of them.
c) Your suggestions for 1-2 better names in the current market to represent sectors such as utilities, financials, Telecoms, Reits, and ndustrials would be much appreciated.
Thanks for your wisdom and guidance over these unprecedented times.
Read Answer Asked by Alvin on April 16, 2020
Q: HI Gentlemen,

I, like most on this board, tend to buy stocks that you put then into your portfolios and sell the stocks when you remove them.
You also seem to instill in us the investment practice not to panic in crazy markets when there is no bid for the equities, for this too shall pass.
So, I was rather surprised in your March 17th email to us suggesting you were going to take MX and CSH.un out of the portfolios.
On march 17th MX was approx 65% lower than it was in the prior month, and the lowest its been in the past 10 years.
On March 17th CSH.UN was approximately 50% lower than it was the prior week.
My question is two fold.
Why did you sell at decade lows when there was ample warning that things were going poorly for these companies? MX was been plummeting more or less since 2018 when it was $100. What took you so long to sell and why at the multi year low?
If you waited this long and the stock had been performing so poorly why did you not revert back to your philosophy on how selling stocks in this type of market might not be the most rational idea.
MX is +30% since it was removed from the portfolio and
CSH.un is +18% approx.
I'm not using 20/20 vision here I am talking about investment philosophy on these 2 issues.

Thanks

Sheldon

Sheldon
Read Answer Asked by Sheldon on April 14, 2020
Q: To a recent question I asked, 5i responded: "Some REITs, if they distribute a large portion of income as return of capital, can still be attractive outside of registered plans. But this also relates to our preference for growth inside a TFSA (REITs are typically slower growth)." I checked my TFSA portfolio, and some of my REITs' distributions are comprised almost entirely of ROC (Allied [AP.UN], Chartwell [CSH.UN], Dream [D.UN]), whereas others' (Choice [CHP.UN], H&R [HR.UN], Riocan [REI.UN]) are almost all otherwise taxable income. So I gather from your previous answer that the former type of REITs (Allied, Chartwell, Dream) shouldn't, generally speaking, be held within a TFSA, is that your view/advice? Also, more generally, so I better understand this issue-- what is the main business/accounting reason(s) why some companies' distributions are primarily ROC? Generally speaking, is one versus the other type of REIT (with respect to proportion of ROC within the distribution) a "better" investment, all other factors being equal (i.e., is there any general investment "rule" here)?
Ted
Read Answer Asked by Ted on April 13, 2020
Q: Retired dividend-income investor. I'm sitting on 15% cash that I created by taking profits and harvesting some losses. I have mapped out how to redeploy this cash to hit my asset allocation targets, both by sector as well as by individual holding. I had originally designed the re-entry on spreading the purchases over 6 months. Given that we now have information on different countries indicating that they MIGHT be showing signs of COVID slowly recovering and that the stock market is forward looking, would you adjust the 6 months time frame to 4 months? What's your crystal ball tell you...redeploy a little faster?

Also, the above equities are those that are candidates for topping up. Which would you hit up first?

Thanks for your help...Steve
Read Answer Asked by Stephen on April 08, 2020
Q: Good afternoon, As a long-time Chartwell investor, of course I'm not pleased with its recent price decline. In our combined portfolio, I've allocated it in the healthcare sector. If I believe that the NWH.UN tenant base is more secure, would you be OK with a switch from Chartwell to Northwest Healthcare Properties, Do you concur with this thesis?

Thanks, and stay healthy.
Read Answer Asked by Jerry on April 08, 2020
Q: Hello,

I note that each of these has sold off with the market and are now yielding between 7.14% and 9.4%. Unless people are moving out of these homes in fear, I think whatever vacancies are caused by Covid-19 will be filled by the aging population. Being on sale to the extent that they are seems overdone given that they continue to function and receive their revenues. Do you agree and would you be a buyer of 1 or all of these at these levels for growth and income? Please indicate a favourite if you have one and the reason why.
Read Answer Asked by Tim on April 07, 2020
Q: I noticed you suggested swapping CSH.UN for ZRE. I understand the change to CSH.un but not ZRE. Yes REITs will benefit from low interest rates but won't retail REITs such as SRU.UN suffer from closed store and Apt REIT suffer from possible non payment of rents?
Read Answer Asked by John on March 31, 2020
Q: Hi 5i Research Team:

I have traded Forex before and am new to stock trading. 90% of my RRSP, RESP and TFSA is in cash and I'd like to avail the current market conditions by "gradually" buying the dips.. and holding it over the long term, 5 to 10 years. I understand that no one can time the market or its bottom.

After exploring the reports and questions on your site, I have identified the enclosed 29 stocks based on following criteria:
- Current Retracements of > 75% over 52 week high & low
- Dividend Yield > 5% (in some cases, like WEED, which is a bit risky, I understand there's no dividend in the near term.. and I am simply going for the upside swing over the next 2 years... same for CRON and Air Canada)

Considering my 90% cash position and strategy to partially buy in on dips over the next few weeks, can you please advise if my stock selection is sound. In addition to my stock picks, please advise anything else that I should keep in mind.

Thanks for everything you do. Much appreciate.
Read Answer Asked by Meherban on March 23, 2020
Q: Would you buy a REIT today? What would be your top choice?
Read Answer Asked by Allen on March 17, 2020
Q: Retired, conservative dividend-income investor with a "buy-and-hold & trim-add around a core position" strategy. At times like these, I take a fresh look at my holdings and ask two key questions. #1 = are there any of my equity holdings that have alarm bells going off? #2 = how safe are the dividends (knowing that no dividend is 100% secure)? The portfolio capital may rise or fall, but it is the continuation of the dividend that is more important.

For asset allocation purposes related to individual stocks (as opposed to sector allocations), I use the following:
5% targets = AQN, BCE, BNS, PBH, RY, TRP, WSP
4% targets = AD, AW, CSH, NWC
2% targets = LNF, MG, NTR
ETF targets = roughly 3-7%

Q#1 = are there any of these equities that you hear alarm bells?
Q#2 = are there any of these equities where you foresee dividend risk?
Q#3 = any thoughts on how I have my asset allocations set up (knowing it is a very personal decision?

Take a bunch of credits. Thanks for your help...Steve
Read Answer Asked by Stephen on March 06, 2020
Q: I have held a position in CSH.UN for a long time. I recognize that the share price growth will be slow, but its distribution growth is frustratingly slow.
I'm not looking to hit a homerun. I'm looking for stability and really my main focus is distribution growth as I plan to hold long term.
I am looking to add to my REIT holdings. Are there other REITs you would suggest or should I add to CSH?
Kind thanks for your time and expertise.
Read Answer Asked by Ian on February 14, 2020
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