skip to content
  1. Home
  2. >
  3. Investment Q&A
You can view 3 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Here are my top 10 holdings by value in order-Visa, BAM + BIP, CGI BofA, ALPHABET, FB , CCL ,BOYD ,SJ , GOEASY.
As you can see there was no thought of sector allocation or othe strategy and am surprised to see Goeasy in the list!
I have about 15 other stocks. I want to keep it to this number and here is my question
I like to let go of two or three of the other stocks -ZZZ (is this a growth stock still ?)ECN , ECI HWO.
I would like to buy Stars group new and maybe add small amounts to current holdings - Constellation software, Savaria GUD , Sandwitch co.
Appreciate your comments on one or two to let go and one or two to add so the only new money is to buy Stars group
Read Answer Asked by thambirajah on May 04, 2018
Q: Hi Peter, Ryan, and Team,

Perhaps you could shed some some light on this ETF, as I believe there's a serious pitfall with the product. I sent First Asset an email yesterday, wondering about the so-called "reinvestment" that was "paid" on Dec. 28, 2017. I refer to it as 'so-called' because this $1.63 per share "reinvestment" does not give you cash, nor does it increase your number of shares! In other words, it appears to do nothing for me.

Here's the email I sent First Asset:

Hello,

I purchased 1395 shares of TXF on July 21, 2017. I see that on Dec. 28, 2017, the fund "reinvested" $1.63 per share. This would, in my case, be an amount of 1395 X 1.63 = $2273.85.

My broker, Scotia iTrade, increased the adjusted cost base (book value) of this fund, so I now show a slight loss when not considering the cash distributions received on Oct. 4, 2017, Jan. 4, 2018, and Mar. 29, 2018.

Here are my questions:

Should I see the amount of $2273.85 on the statement from my broker?
If I were to sell my shares of TXF today ($16.69 at this moment), would I receive 1395 X 16.69 = $23282.55?
What happened to the "reinvested" amount of $2273.85?

I look forward to an explanation of the above questions.

Here's the response from First Asset:

Hi Jerry,

The $1.63/unit amount is a non-cash distribution that was reinvested in the fund, which is why you see an increase in the Adjusted Cost Base. To answer your questions:

The amount of the distribution should be reflected on your statement but only as an increase to your Adjusted Cost Base. It wouldn’t increase the amount of units or the market value of your position in TXF.
If you were to sell your shares based on a unit price of $16.69 you would receive approximatively (1,395 x 16.69) – Adjusted Cost Base (including the $2,273.85) minus any other fees your broker my charge you.
The amount of $2,273.85 has been added to your Adjusted Cost Base.

I realize that 5i doesn't really care much for the covered-call aspect of TXF, but I was prepared to live with that. However, I certainly didn't expect the ACB (book value) to increase by the amount of this non-cash distribution! How does this help the investor? Am I correct in my assessment of TXF?

What would you replace TXF with to stay in the same sector, and one where the "reinvestment"is actually paid to the investor?

Thanks in advance for your guidance. I realize that this is a long and detailed question and your answer would be helpful to others. Please deduct as many question credits as you deem necessary.
Read Answer Asked by Jerry on May 04, 2018
Q: Your staff is allowed to buy stock on the US exchange.Can you tell me what your people are buying as of late?
What are your thought on Qcom?
You think its a good candidate at this moment and why?
Read Answer Asked by Josh on May 04, 2018
Q: If you were to start a growth and balanced portfolio in the USA tomorrow, what would be your top 5-8 picks for both portfolios. Also, based on your experience, what management teams do you regard as top allocators of capital, USA firms. Thanks for your great service.
Read Answer Asked by Aaron on May 04, 2018
Q: Group - Several weeks ago I asked a question about both Canadian + us banks +Pay pal +Score and so on. The question was that I was watching my profits slowly but surely disappearing in the sector ( I have been heavy into Financials for the last 2 yrs so have done very well) . I wanted to cash out but was advised that with strong quarterly results expected to hold on and everything would work out (I hold 20 % total portfolio exposure). I want to revisit the question now all the companies have reported earning and they continue to drop especially US holdings. Please give me your present thoughts on the sector (both Cad + US Financials+ the overall market its getting ugly and strong earnings are not helping the overall trend downwards. Thanks for your valued opinion . There are several questions here so deduct as you see fit
Read Answer Asked by Terence on May 04, 2018
Q: I have a question about gold I want some thought on please.

I'm considering taking a position (about 5% of portfolio) in gold for a medium term hold. Given the potential volatility of individual gold stocks I am thinking of an ETF, likely XGD. Two questions, do you recommend entering at this point and if so...... should I consider an ETF of mostly large caps such as XGD, or would you recommend balancing the position with an ETF with more of a junior focus. Would a position in a streaming company such as Franco Nevada accomplish the same thing?
Read Answer Asked by jeff on May 04, 2018
Q: In my will ½ of the assets are to be shared between my grandchildren until the age of 25. There current age range is 2 year to 15 and new grandchildren are still potentially on the horizon. I would like to be able to direct the executor to invest in funds in your balanced portfolio transitioning to the income portfolio in the final 7/10 yrs. However your continued service is not guaranteed.
The prudent route for executors is to safeguard principle and stick to GIc’s. However for grandchildren that have a 10/15 or 20 time year horizon Gic’s seem to be a worst option compared to a well-balanced equity/bond portfolio.
I know this is outside of the scope of your service but I don’t know where to go and hope that you can give me some directional advice in this regard.
Thanks
John
Read Answer Asked by John on May 04, 2018
Looking for more? Sign up for a FREE 14 day trial! No credit card required

We invite you to sign up for a 14 day free trial of 5i Research!
Experience all the benefits and tools we have to offer; stock research, model portfolios, Q&A with our experts, and so much more. Join a community of like-minded investors today!