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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: Peter: In your growth portfolio you have REAL listed as consumer discretionary. I don’t have a security in this sector. Any suggestions? I have REAL has more of a technology stock similar to LSPD, which I own. I’m also light in health care, own ATE only , thoughts on GUD, and REAL.
Read Answer Asked by Roy on January 15, 2020
Q: Hello,
We inherited this F type fund after parting with our advisor. The BMO has so far kept it as such in our joint cash account. We own this fund since November 2017 and so far received $1236.30 in dividends and are $2500.00 down from our 30K. investment. I have a very basic idea of their long-short approach and I would like to ask your opinion if their modus operandi might be worth keeping and provide value during possible down markets.
Thank you and have a super day,
Kurt Baertsch
Read Answer Asked by Kurt on January 15, 2020
Q: I am trying to determine how material the withholding tax difference is if I hold vgg in my rrsp vs vig.

At first glance, the yield on vgg is 1.229% and on vig is 1.764%, according to the 5i website. However, according to the Vanguard website the vgg "MER" is 0.30% and the vig "Expense Ratio" is 0.06% (quite a difference in fees if indeed this is an apple to apples comparison). So if I compare before expense yields I get that the cdn vgg yields 0.295% less (1.764 + .06 - 1.229 - .30) or , as a proportion the cdn before expense yield is 84% of the us before expense yield (1.529/1.824). So the w/h tax costs me 16% of the yield -- does this analysis seem correct? Thanks. Also, why would there be such a large difference in fees between vgg and vig?
Read Answer Asked by William on January 15, 2020
Q: Hi 5i Team:

Happy New Year!

I am thinking to put my hi interest saving money to either ENB and or ALA. I know the principal may go up/down, but if it goes down at least I can use my cap loss to offset gains. Which of these two you would recommend for a long term hold just to earn the dividend? I already own these two stocks and my holdings are well diversify. Or, what would you recommend besides ENB and ALA.

Thank you.

L
Read Answer Asked by LOUISA on January 15, 2020
Q: "I am interested in bitcoin. Perhaps something like Coinbase not GBTC. I realize that this is more gambling as apposed to investing but it is possible for large gains and I would appreciate any guidance that you can give me. Thanks, James"

To provide James and others some points/options to consider:

Coinsquare is a fairly reputable exchange that is accessible to Canadians. Coinbase is also an option. Poloniex in another one. I have only used Coinsquare and the now defunct QuadrigaCX.

If buying cryptocurrency coins, consider researching and using a software based wallet such as the bitcoin.com wallet for Bitcoin Core (BTC), bitcoin.com or Electron Cash for Bitcoin Cash (BCH or BAB), or Electrum SV for Bitcoin SV (BSV). There are also hardware based options (Ledger, Trezor). Always withdraw purchased coins from any exchange to a wallet which you control (majority of coins lost have been lost by poor exchange management). Take care in writing down and safely storing any information these software wallets prompt you to as this information can be used to recover your coins should anything go wrong from a software/hardware perspective (i.e. data corruption, computer failure). When the exchange QuadrigaCX went under I was thankful that I had always withdrawn my coins to a wallet under my control and thus had minimal losses.

Many hardware wallets offer support for cryptocurrencies outside of 'the bitcoins' (BTC, BCH, BSV). The only software one I know of is Coinomi, though I am sure there are many others. Cryptocurrency coins outside 'the bitcoins' are not something I have much experience with.

As for public companies the field of options is thin. Most are small cap or micro cap companies and generally speculative in nature. Some companies to research: Hut 8 Mining Corp., Bitfarms Ltd., Hive Blockchain Technologies Ltd., and Taal Distributed Information Technologies Inc.

Proceed with much caution and assume a high risk of loss.

Hopefully 5i members find this information useful in performing their own due diligence.

Disclosure: I own Taal and BSV only.
Read Answer Asked by Marco on January 15, 2020
Q: General trading question question for you. When buying or selling, how does one identify or understand the spread drivers or factors between the "bid" and "ask" price to get the highest price (when selling) or lowest price (buying) when quotes are presented from an on-line service. In my case iTrade. As the transaction value increases (from selling or buying), the potential for an non-optimized trade exists for an individual investor. I realize that their are potentially many factors that can contribute to the spread between the bid and ask (particular day, volume, larger players, etc) but how does an individual investor maximize his/her return? On a recent trade (sell), I received the lowest price in the spread with the net results of a $1000 reduction as compared to the median price in the spread. Thx Steve.
Read Answer Asked by Stephen on January 15, 2020
Q: Is it possible to use etf's other then DLR and DLR.U to perform Norbert's Gambit? I want to buy with weekly contributions and avoid having money out of the market but also avoid withholding tax on US dividends in my RRSP.

For example purchase share in HSX with weekly contributions until I accumulate enough shares that it's worth journaling them over to HSX.U - sell the shares and buy SPY.

If so is there an all country world index ETF that one could do this with?

Thanks







Read Answer Asked by Dennis on January 15, 2020
Q: I am helping my son pick mutual funds for his work RRSP as he now has more funds that he can choose from. My question is that he can select a pure US mutual fund
( better return than the one he currently owned) and a Pure international fund but the international fund has a lower return over 1,3, 5, 10 years than the one he currently invested in over the same time period which is a combination of US and International holdings. If he invest in the pure US fund his US Allocation will go up and international will go down. He has many years before retiring so would it be best to invest in the pure US and pure International to keep weight more balanced? He has also some in the Canadian mutual fund. All funds are managed by Blackrock.
Thanks
Read Answer Asked on January 15, 2020
Q: Regarding a companies credit rating, is this something that is reviewed automatically every year.
Read Answer Asked by Pat on January 15, 2020