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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: Hello! What do you think of TA now, given this announcement, and in light of your comments regarding their latest results? Also, the stock price is up by about 4% today. Is it best to sell and move on?
https://www.bnnbloomberg.ca/transalta-strikes-investment-deal-with-brookfield-renewable-partners-1.1234074?fbclid=IwAR1JLfnBK_qAif-rT7p-PKE5cavP6PJJEN8w_u4n1Tcj5nVUe7SzSCC0lzw
Read Answer Asked by Helen on March 25, 2019
Q: Further to a question asked by ‘M John’ on March 15, about CIPF protection for larger portfolios, my understanding is that an investor is protected to a maximum of $1M, but that is for the ‘cash’ side of things, meaning, if you had $900,000 of stocks and $100,000 of cash, should the broker go under, you’d only be calling on CIPF for $100,000, because all the stock holdings are automatically ‘guaranteed,’ because they’re held separately. So in theory, a portfolio held at one institution can be very large, and one need not worry, unless they get above $1M in cash or cash-equivalents.

Is my understanding correct, or is it $1M total, including all stock holdings?

Thanks for clarifying this.
Read Answer Asked by Warren on March 25, 2019
Q: Your comments please, on the following article in Reuters today with respect to a forthcoming recession once the yield curve inverts? Personally equities in general appear to be fully valued today and i'm reluctant to add cash to this market.

NEW YORK (Reuters) - The spread between three-month Treasury bills and 10-year note yields inverted on Friday for the first time since 2007 after U.S. manufacturing data missed estimates.

The three-month 10-year yield spread, the Federal Reserve’s preferred measure of the yield curve, narrowed to minus 0.56 basis points. An inverted yield curve is widely understood to be a leading indicator of recession.

The Market Purchasing Managers’ Index report, which tracks activity in the U.S. manufacturing sector, on Friday disappointed investors, with the headline index down 0.5 percent to 52.5 versus the expected 53.6. Earlier, Germany reported that domestic manufacturing contracted further in March, driving the benchmark 10-year U.S. government bond below zero and adding to fears of a global slowdown in growth.

The soft data exacerbated a trend that began on Wednesday after the Fed issued a statement showing policymakers foresaw no further rate hikes for 2019 given the slowdown in the American economy.

“The reality is the market is now expecting lower rates on average over the next 10 years than we have currently. And it’s a combination both of a dovish Fed and also ongoing global growth concerns,” said Jon Hill, U.S. rates strategist at BMO Capital Markets.
Read Answer Asked by LARRY on March 25, 2019
Q: Good mornng,
Thank you for your prompt and very helpful answer to my question re: Mutual funds/ETFs that do not pay any DISTRIBUTIONS and only generate CAPITAL GAINS.
As a follow up to your general HORIZON Total Return ETFs recommendation, what are your thoughts in terms of appropriateness if I were to split the amount to be invested in each of my minor grandchildrens' Non Registered in-trust accounts as follows: 50% in HXS.CA and 50% in HXT.CA? Your comments/thoughts on these specific ETFs would be most appreciated. Feel free to recommend other ETFs as need be . Thank you.
Read Answer Asked by Francesco on March 25, 2019
Q: would you confirm for me if it is correct that DSC can be deducted from capital gains as outlays and expenses. and would be claimed using schedule 3 when completing my income tax return? thank you
Read Answer Asked by Brenda on March 25, 2019
Q: Good morning 5i,
I have the above in my TFSA for a few years The stocks have been declining. Please provide your insight for going forward. Am thinking of replacing it with DRG.un or FSZ. Please suggest a couple of names for some growth n some dividend income. Thanks for your great insight as always! Rossana.
Read Answer Asked by Rossana on March 25, 2019
Q: I have owned this stock since I bought it at $16. It is now at the absolute high it ever was and I am wondering if it would be a good idea to switch to Northland Power for a better chance of capital gain. The div. would be the same since I can buy double the shares or would it be smarter to sell half of EMA and invest the proceeds into either Northland or Algonquin. I do not own any other power utility. Thank you for your great service provide over the years. H.
P.S. Someone is selling $750 m worth of shares and should that bring the price down somewhat?
Read Answer Asked by Harry on March 25, 2019
Q: I am close to retirement and have about 2/3 of my total portfolio in a corporate taxable account. All are equities with 53% Can, 39% US, 2.5% EM and 6% cash.
What could you suggest to recession proof and at the same time be tax friendly to help mitigate my risk given the aggressive 94 % equity holdings?
The other personal 1/3, of which 20% is in a non registered account, comprised of RRSP/LIRA/TFSA has about 33% fixed income.
Thanks
Jeff
Read Answer Asked by JEFF on March 25, 2019
Q: It seems to me that there are straws in the wind of a coming recession (inverting yield curve, global growth warnings, trade wars, Brexit hits, etc.). Would you agree with this hypothesis? What assets would you recommend for building a more recession proof portfolio? Should we leave stocks almost entirely and go to bonds? I have no real recession plan yet feel I need one. Any help is, as always, appreciated.
Read Answer Asked by Elizabeth on March 25, 2019
Q: Lots more discussion this weekend over an inverted yield curve. I have two questions:
1) Is this something to be worried of, and do you think investors should be more conservative in the next 12 months?
2) Didn't the 3 and 5 year yield curve invert in December 2018? If so, I'm assuming the 10 and the 2 inverting isn't a huge surprise, although markets have done really well in the past 3 months.
Read Answer Asked by Mike on March 25, 2019
Q: I’m under the impression that 5i research preference for a pipeline yielding company top pick is Enbridge versus Trans Canada RP .
However fundamental analysis shows that TRP has more attractive entry price, better management performance over the past 5 years and lower debt better level.
KPI benchmark shows: TRP lower PE of 13.7 vs 22 for ENB, better ROE 15.2% versus 7.2% for ENB , significant better Ebitda to debt ratio of 4.8 vs 5.4
while both stocks have similar price to book and dividend yield and dividend growth projections. Future 2 years EPS growth shows that both projections are within the same range and ENB is scheduled to have a lower 2019 EPS versus 2018
What am I missing here ?
Read Answer Asked by Jean-Yves on March 25, 2019
Q: Hi,
after trading over $71/share in February, the stock is down more or less 10% since their earnings release. I thought they had a good quarter and I was happy with another dividend increase.
In your opinion, what may be factors explaining this downtrend? Is this more related to the sector rather than company specific?
Also, I don't have a full position in the stock. Would this be an opportunity to increase my position or given the price action, is it better to wait and see where things settle? To be honest, I see the market telling me to stay away for now.
Appreciate your opinion as always.
Thanks,
Dan
Read Answer Asked by Daniel on March 25, 2019
Q: Hello,
I have held FSZ for a few years now (small position of less around 1%). The share price has not moved basically since mid-2013. I am very happy with the dividend (another increase this quarter) and it appears to me they are a well managed company.

I know they operate in a sector that is not favorable but are there any catalysts on the horizon that might be a positive for the share price in the mid to long term or should one simply hold this for the income?

Would National Bank eventually buy this out (I know this is speculation but had to ask)?

And, what would be a good target % to hold in a well diversified income portfolio inside an RRSP for the average investor? I have full positions in BNS and SLF.

Thanks,
Dan
Read Answer Asked by Daniel on March 25, 2019
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