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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: On July 2, 2020 John asks for tech oriented ETF suggestions; you mentioned a couple but not TEC or HXQ. Are these tech oriented? Any particular reason why you would not want to consider them? Also, I am thinking of taking positions in these ETFs as and then selling some of the large US tech names I hold directly and then diversify into other US areas; would these be a good strategy? Last, about ETFs generally, does the price of an ETF depend solely on the values of the underlying securities, or can the price also be affected by the demand for the units? thanks for your excellent service.
Read Answer Asked by Leonard on July 06, 2020
Q: A question for the dummies amongst us.
In reading your explanation of “covered call options” what I still don’t understand is who buys the call option and why would they? Who determines the “strike price”, do you? Who determines the other terms of the contract: the expiration date, the “premium” you get for selling the covered call, the price if you “buy back” the call option prior to expiry? Who sets all this up and how do they get paid (your broker)?
What is the downside, aside from missing out on potential gain if the stock is called away?
Perhaps you can recommend other resources that explain all this in relatively simple language.
Supposedly there is no such thing as a stupid question.
Len
Read Answer Asked by Leonard on July 06, 2020
Q: I am currently reviewing my mother's non-equity portion of her retirement portfolio. She currently owns CLF, ZAG and short-term GICs. The interest from these investments are not needed for immediate living expenses. The non-equity investments in her portfolio serve to reduce volatility, and provide peace of mind.

Everything I have read recently indicates that interest rates have likely made a long-term bottom. As such, I am wondering whether my mother should sell ZAG and keep her interest-bearing investments in short-term, secure instruments only (i.e. CLF and GICs). In short, should she be staying away from mid-long term bonds?

Jeremy Siegel recently recommended that retirees should modify the traditional 60/40 stock/bond portfolio to 75/25 going forward because he does not anticipate good returns from longer-term bonds. Do you agree?

Many thanks for your thoughtful and valued insights.
Read Answer Asked by Dale on July 06, 2020
Q: The shares have been halted and I’m wondering if in your experience this is a lost cause? Quite interesting data showing that they had promising medical treatments for many mental illnesses.
Thanks!
Read Answer Asked by Gregory on July 06, 2020
Q: Good Day 5I Team,
Your answer scared me. "We are not experts on US estate law, but we know the hit on death can be ridiculous, and the estate tax applies prior to Canadian capital gains taxes. Owning the Canadian fund will help with this"
Does that means all US ETF & US stocks owned by a Canadian resident are subject to a US taxes on his death ?
I uderstand your are not a Tax specialiste, but you please give me a link to learn more on this subject. Thanks. Best Regards
Read Answer Asked by Djamel on July 06, 2020
Q: Good Morning...I just checked our numbers and we are higher than we were on December 31, 2019 so thank you. We have a small NVTA position (0.6% overall weighting) bought less than 30 days ago but already up 13%. We are long time holders of CSU and our current weighting is 9.3% which is getting close to (or maybe already inside) the red zone. I am thinking about selling some CSU to reduce it's weighting to 8% and using the proceeds to buy NVTA. Would you call this move "risk neutral" or "risk increase"? CSU is a top tier company so it I call it "risk low" and NVTA a lesser tier company so it is "risk high". But does the weighting change balance out the risk increase? I would consider NVTA to be Healthcare so that would help a little to decrease overall IT weighting and increase Healthcare. We own your IT recommendations (CSU, NVDA, ENGH, VEEV are the biggest positions) and Healthcare (ISRG and PFE). It seems both ISRG and PFE are low growth so maybe adding a potentially high growth company might be useful. There are no tax implications. Any thoughts you have would be appreciated.
Thanks,
Jim
Read Answer Asked by James on July 06, 2020
Q: Hi. I would characterize myself as an income investor, but like many others am also trying to position myself for "conservative growth".

I currently hold 3% positions each in BIP, FTS, BEP and a 3.5% position in CPX. I also have a 4% position in ENB (I see it as a pseudo utility/energy).

I'm down about 5% on FTS and BEP, even on BIP and up 15% on CPX.

I'm thinking of selling FTS at a tax loss and picking up AQN for the higher dividend and what I see as better potential for growth.

I may consider adding FTS back in at a later date. What do you think of this strategy, or would I be better to leave things as is? Do you see BIP, BEP, AQN and CPX as having better growth potential in the next 1-3 years? What would be your recommendations given this mix of holdings?

Thank-you in advance.
Read Answer Asked by Cory on July 06, 2020
Q: There are a lot of different BAM preferred shares that one could choose from to invest. Some have dived yields as high as 8%? What is the difference in each of the issues? Why would one not just choose the one with the highest dividend yield? Can you please clarify? Is there a drawback of choosing one over the other? If you had to choose one which would you pick?

Regards,

Brendan
Read Answer Asked by Brendan on July 06, 2020
Q: Will the Canadian. Money saver money show be recorded for those who aren’t available during the livestream?
Thanks
Read Answer Asked by Karim on July 06, 2020
Q: Hi,
Seems to be talk about gold hitting 1900.00 - do you think it is talk, or has possible legs? If it has legs what's the best instrument to invest in? ETF's or stock picking? Either way, would your preference be in US dollars or Canadian? I am wondering if gold does soar, whether or not it will help to drive the value of the US dollar down. So lots of questions - deduct points as you see fit & as always, thanks for your thoughts and suggestions!
Dawn
Read Answer Asked by Dawn on July 06, 2020
Q: Good morning... Eric Reguly of the Globe and Mail wrote an interesting article for Saturday’s paper “Big Tech can’t keep rising when the economy is sinking”. He concludes by stating that “The Big Tech companies have had a fabulous run and have saved the broader equity markets from collapsing. But they can’t keep soaring when the economy that propelled them relentlessly upward before COVID-19 hit is sinking.” What is your take on his thesis? Thx
Read Answer Asked by Patrik on July 06, 2020
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