Investment Q&A

Q: Hi,

I read an article earlier this month that Glencore is shutting down production from one of its Cobalt mines until mid 2019. At the time this preport came out, KBLT had a short lived bounce but has since fallen back down to mid $5 range.

What do you think the odds are that Cobalt prices start moving higher again based on the Glencore issue? And if Cobalt moves back to previous levels from earlier this year, would you expect KBLT to move back to its previous levels?

Thanks,
Brad

Q: Good morning,
Both of our family TFSA accounts are currently invested in their entirety with a variety of Mawer Mutual funds (100% Equity). At 70 years old, I would like to reduce the risk profile of our TFSA accounts from 100% Equity to a more classic 60% (equity)/40% (fixed income) balanced portfolio.
Of the five investment options for our two family TFSA accounts which are used as an estate planning tool with the intention of never withdrawing any funds and leaving the proceeds to our grandchildren, which of the following options would you recommend, in what order and why?
Option 1: Staus Quo.
Option 2: Invest all TFSA funds in the Mawer Balanced or Mawer Global Balanced Fund.
Option 3: Invest all of the TFSA funds through a Discretionary Money Manager that currently manages our family RRSP and Non Registered accounts with total management costs of 1.30% (Money management fee, Sub Advisor fees, Custody fee, Transaction fee plus HST). The average long term target rate of return being 4.5% after fees for this balanced portfolio of which 25% of the portfolio is invested in alternative investments to supposedly further reduce volatility.
Option 4: In an effort to further simplify, reduce fees and perhaps improve long term performance of our TFSAs, invest all the TFSA funds directly in the Vanguard Balanced ETF portfolio (VBAL) through our discount brokerage account.
Option 5: Invest all the funds directly through our discount brokerage account in a combination of ETFs that covers 20% Bonds/32% Canada/32% USA/16%Global and if so what would be your preferred ETF recommendation.
I thank you in advance and look forward to hearing your response and recommendations.
Francesco

Q: I have room for one of these in my TFSA. Which one would you pick for best rebound when all this madness in the market goes away over the next 12 months? Thanks
Derek

Q: My energy setup currently is WCP (2/3) at a loss and BIR (1/3) at a gain. Would you take advantage of tax loss selling on WCP and replace with VET or trim WCP and buy VET as well? What would be your preferred setup?

Q: I need to invest in an energy company/ies and have decided upon SU and CNQ so that my energy component of my investments is appropriate . I am both an income and growth investor and at the appropriate time in the near future will invest in one or both of these companies. In your opinion is one of these companies a better investment considering my criteria (and why) or should I invest an equal amount in each. Thank you. Mike

Q: Hi 5i
I always thought tax loss selling was mainly a thing in the Nov/Dec timeframe. With the increased volatility in Oct / Nov is it possible to judge whether the volatility could be attributed to earlier tax loss selling or just general fear & profit taking? I'm not qualified to make a judgement like this and my question is more a request of what you'd expect for the remainder of the year and whether January would bring some relief.
I know you can't know with certainty but at a gut feel / guess what do you think the remainder of the year has in store?

Gullible :)
Mike

Q: I own a Brookfield Renewable preferred (Series 11) that pays $1.25 (5%) thru to April 30, 2022. If not called, it will convert to the greater of GOCs+382bps, or 5%. Given my view of interest rates, I am comfortable with the position, because even if it is not called, I will be left with what I expect to be a good quality credit with a relatively attractive yield.

My concern is that it seems to have got caught up with the recent volatility, and is trading well below $25. Currently it is $23. I want to add more, but I wonder if I am missing anything here. I would still expect it to be called in 2022, as I just would not expect management to allow it to float at what I expect would be an above market interest rate. But I am already underwater significantly more that I would have ever expected on this, and I am leery of adding to the position.

Thoughts?

Q: Hi 5i,
I am considering small average down purchases of the listed companies but unfortunately cash is limited so can't choose all of them! Could you rate/order them for rebound potential ? Currently MX & TOY are approx 3% each, FSZ 2%,and TSGI/SLF/SIS have been driven lower to approx 1% each.

Thanks
Mike

Q: Can you comment on the investment potential of Morguard reit and its dividend sustainability

Q: Both Altria (MO) and BTI generate great cash flows, have high dividends and have had a significant share price reduction lately. How sustainable are the dividends and what’s your opinion on me taking a half position (2% of my portfolio) in each for both income and as a potential play on the cannabis sector? I have a very well diversified portfolio and very long-term philosophy. Thx.

Q: Dear 5i
I'm very much interested in the conservative portfolio for when i retire with in the next 6 months . I especially like bank , utilities and reit ETF`s as the yields seem reasonable and the fact that the ETF`s pay the dividends monthly which provides consistent income during retirement .
My dilemma is that i think i prefer to hand pick similar stocks myself within each of those categories most of which have been recommended by 5i .This way would all likely offer a higher average yield as there is no MER to consider . The problem is that most of the stocks in those 3 areas (utilities , banks and rents ) only pay the dividends quarterly so as a retired person there is not the consistency on monthly income as there would be with buying the corresponding ETF`s . Is this generally a personal preference thing or is there one way you would advise for a soon to be retired person .
Thanks
Bill C.

Q: Hi, are the interest distributions in bond ETF’s like XBB included in the price of the ETF. So when looking at the chart of XBB over time are distributions included in the price? Thanks.

Q: Can you please explain how Methanex results correlate to the price for oil and/or gas.
And if there is a relationship how concerned should MX investors be with what is happening with the price of oil.

Q: RE: Tax loss selling (registered accounts)
If I sell a stock at a loss in my RRIF or TFSA, do I still have to wait the 30 days to repurchase it in one of the above registered accounts ? For example I sold KEL, am I allowed to buy ZEO or another oil & gas company ? Thanks as always for your valuable advice !

Q: Peter and Ryan.
The recent gyrations of the market have left me somewhat shell-shocked because of the severe punishment some companies take for slightly missing quarterly reports. I don't think I'm alone. I've decided to try to identify a number of Canadian companies that are managed so well and have such excellent prospects for the future that they will enable me to buy and hold them through thick and thin, for a long time (10 years).
I'm seeking your guidance to enable me to disregard the extreme volatility and hold these "Canadian Superstars" for many years to come. I realize I'm presenting you with a difficult task but hope that your experience and professionalism, which I've come to respect, will enable you to identify some 'long term investments'.
So that being said, could you suggest a number of Canadian companies from a variety of sectors that I could buy and use as my core holdings. As time passes, I will add many of the growth companies you support to round out my portfolio.
Again, I thank you for your guidance.

Q: I own ALA (Alta gas )CU (can utility ) VET (Vermillion ) all with a loss.I am planning to sell for tax loss.When is the best time to sell so I do not loose the divider for month of DEC, before end of the year.Thank you

Q: What is your outlook for CU in terms of dividend increase and modest capital gains for the next five years. As a senior, my expectation is a7% total return on average. What other stocks would you prefer to meet or exceed my desired return?

Q: Thanks for the great service as always.

I'm looking to replace a couple of mutual funds in the family RESP. We have two kids ages 6 and 9. The current funds (~$65k) are split between RBC Target Education 2025 (about 2/3) and RBC Target Education 2030 (about 1/3).
To save on those high MERs, I was thinking of replacing those two funds with 40% XBB, 30% XIC, and 30% XUS. Contributions over the next ~10 years will go straight towards XBB. The goal is to keep it diversified and simple.
Does this change make sense?

Q: FLOT price unusually / quickly drafted down this past week ?
Any insight would be appreciated.

Q: Looking at fundamentals and management which company do you think has the most recovery and safety. I own them both and can only add to one. Thank you as always.