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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 note that a number of Alberta based companies, especially the oil and gas companies, are reporting better profits in part because of the reduction in the Alberta corporate tax rate that came into effect on July 1, 2019. As the earnings period now being reported is for the quarter ended June 30, how do the companies already get a tax benefit? I don't think the rate reduction wqs retroactive.
Read Answer Asked by Murray on August 12, 2019
Q: Good morning...I am trying to find information on the dividend tax credit for individuals with no other income...it was explained that it was for all individuals ...my understanding that those individual that have no other income but dividends are treated if holding Canadian corporations...can you confirm or do you have a link for better understanding...Thanks
Read Answer Asked by Matthew on August 06, 2019
Q: Just read the piece on negative interest rates and this question occurred to me. If monetary authorities control interest rates what leverage do bond the "bond vigilantes" have as long as a country doesn't borrow in a foreign currency?
Also, why is it that if rates rise from 1% to3% on a 10 year T-bond you loose 16% but if they rise from -1% to 1% you lose 20%? (see Cullen Roche July 26/19)
Not sure if this is your area of expertise but other members might know.
Thanks
Mike
Read Answer Asked by michael on July 31, 2019
Q: I have received notice that my TD.PF.B preferred shares are being reset & I have the option to convert these series 3 preferred shares to series 4 preferred shares. From my understanding of the TD.PF.B series 3 prospectus the series 3 interest rate will be fixed for the next 5 years based on the present Canadian Government 5 year bond rate plus 2.27%. While the series 4 next 5 years interest rate will be calculated every 3 months based on the Canadian Government 3 month Treasury Bill plus 2.27%. My question is, which would you choose, 1) series 3 which will have an approximate 3.8% interest rate for the next 5 years OR 2) series 4 which have the possibility of having a greater or maybe less interest rate over the next 5 years OR 3) sell the shares & purchase shares that have a better chance of future growth. I bought the preferred shares when issued at $25 per shares & am presently underwater by 10% when the 5 years of dividends received are added to today’s market prices. I do not need the dividend as income & the shares are in a registered account. Thanks … Cal

Read Answer Asked by cal on July 12, 2019
Q: Hello,

After reading the article on 5i 'Investment Model Portfolios' - May 6, 2019 I had a question regarding this post in relation to my current equity portfolio.

My portfolio analytics indicates that I should be allocating 25% to Canadian equity, which seems high to me. This article mentions that the big providers/firms allocate about 31-32% to Canadian equities, which I found a bit surprising, given Canada is only about 3-4% of the global equity market. The article does note that for Canadians, having a home country bias can make sense (dividend tax credit and tax reasons), which makes sense.

My question is this. For the average Canadian investor, does 25% of one's equity exposure to Canada seem high (even given the added benefits noted above)? I am guessing there is no 'perfect' answer to this question however, I look at this as making a big bet on oil and financials. If Canada is 3-4% of the global equity market, could one not argue that even doubling Canadian exposure, say up to approximately 10% of equity portfolio, be a reasonable allocation?

Thanks for your insights on this.
Read Answer Asked by Aaron on June 28, 2019
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