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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: hi, according to the bnn website the tsx forward (I presume) PE is at 24.78, which as far as I can research is astronomical for a "recovery" period. can you shed some light on the tax historical forward PE, and provide some data/statistics on how well the tsx does over the next 6-12 months with a PE of 24.5 or above? I assume you have access to this data?? cheers, chris
Read Answer Asked by chris on September 23, 2020
Q: Hi,

I use these two broad ETF's to get exposure outside N.A. I'm in my late 30's and a growth investor. I know you can't give personalized advice, but what would be your suggested allocation towards these four buckets, VEE, XEF, Cdn, and US stocks? I have a spreadsheet to keep track of my holdings and allocate my holdings based on where they trade, although many companies may generate revenue in other countries. Is this too simplistic? I'm just trying to keep it easy to manage.

Thanks!
Read Answer Asked by Keith on September 23, 2020
Q: Hello 5i Team,

I'm considering selling my slumping AYX and replacing it with either JD for some China exposure, CRWD, or CRM. Just wondering if I can get your thoughts on this and a ranking for a five year hold. I would be selling AYX with a small gain, but I know it's not expected to do much in the short term and maybe prospects are better elsewhere? Thanks.
Read Answer Asked by Bradley on September 23, 2020
Q: My powder keg is dry waiting for the covid 2nd wave and in my opinion anticipated second market adjustment. The recent jitters made me realize I haven't made my buy plan for my cash...I am pleased with my portfolio and don't have any huge gaps, I am slowly switching from growth to income so am looking more toward your income portfolio for inspiration. In Canada ENB and H looked like good buy options and I already own Suncor so would top up on that as well to a full position. In the USA I am leaning towards P&G and Coke. These complement my current holdings and I feel these additions will do OK in a possible extended covid induced economic slowdown as well as be good long term income holdings.

Any names you wished you had added on the last drop or names you are watching with interest?
Read Answer Asked by Tom on September 23, 2020
Q: Going forward past the covid and the US elections, what sectors would you prioritise and what would be your picks in those sectors
Thanks for the great help
Read Answer Asked by James on September 23, 2020
Q: For taxable accounts, a US-listed international ETF (or Cdn-listed ETF, with an underlying US listed ETF) is tax inefficient because the international withholding tax is not recoverable. Purchasing a similar Cdn-listed ETF which holds the international stocks directly (i.e. not a US-listed ETF) is more tax efficient as the international withholding tax is recoverable.

However, there are often advantages to buying the US-listed ETFs as they typically have much larger AUMs, and much lower MERs than their Canadian listed counterparts (which have underlying international-listed stocks). For example, the MER for VEA (US listed) is 0.05% and for VDU (Canadian listed) is 0.22%. The MER "spread" varies considerably between ETFs, and can sometimes be quite significant.

Are you aware of any formula to help an investor determine when it is best to buy the lower-MER US ETF (and pay the higher tax) and when it is best to buy the higher-MER, lower tax, Canadian ETF? Is there any rule of thumb for an investor to use, to decide that once the MER-spread exceeds a certain amount, then an investor should buy the US ETF (as the additional MER costs in buying the Canadian ETF exceed the tax advantages)?

I realize that the result can vary depending on the percentage of non-recoverable international withholding tax, the investors' tax rate, etc. However, any guidance you can provide would be most appreciated. If you are aware of a "formula" to make this assessment, that would be ideal.

If there is no formula, please assume the investor is in a 50% tax bracket, is a long-term investor, the account is taxable, and there are no currency (hedging or exchange fee) concerns.

Thank you again for this excellent service.
Read Answer Asked by Dale on September 23, 2020
Q: "Hello 5i team,

As we approach election season and Q4, the markets look to be taking a bit of a downturn that is reminiscent of earlier this year in Feb/Mar.

What are your thoughts on what's ahead for Q4 in terms of buying? Are there any industries and/or names that you would suggest to focus on?

Specifically, I am considering AAPL, MA, SHOP, SQ and AMZN on the current correction, given the upcoming holiday and gift buying season is likely to have a lot of ecommerce action and new apple toys, with payment processing being a natural fit.

If you could suggest your views on which industries and names have typical strength Q4 that would be appreciated.

Thanks very much! "
Read Answer Asked by TRINA on September 23, 2020
Q: I finally got around to using Portfolio Analytics on myself. Biggest perk was the totalling of my expected yearly dividends. Mystery solved!
Unsurprising was the overweight tech at 45%.
When one looks at the difference between REAL and SYZ (as examples of software tech) I have to wonder just how useful that advisement is as a total? It seems in software you could have proxies (almost) for the entire market!

Read Answer Asked by Gerald on September 23, 2020
Q: Hi team,
What is behind E's latest large spike in volume and price appreciation over the last four days?Have not seen any announcements other than continuing their normal course purchase!
Thanks,
Jean
Read Answer Asked by Jean on September 23, 2020
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