Investment Q&A

Q: Given past seasonal weakness trends in the markets, do you think taking a 20 percent position in gold and the vxx from now to Sept/Oct is a good idea? Thanks.

Q: I bought ATD.B earlier this month in my TFSA and it was doing well so I added it to our joint account. But in the last few days it had dropped considerably and is now in the red. Any reason? Hold or sell? - Ted

Q: Hello again. I’m interested to know how to consider currency when deciding between hedged, unhedged, and US dollar ETFs. In your answer to my last question, you mentioned that you prefer VPL over VAH; how was currency a factor in your judgment? Also wondering if you would approach European ETFs similarly, with respect to fluctuations between the Euro, USD and CAD (e.g. VEH, VE, VGK). Are there separate currency considerations I should take into account for each region, including EM? (e.g. VEE vs VWO)

When I hear professionals recommend CAD-hedged ETFs when the USD is falling, it sounds tactical but what if an investor has a long time horizon in mind? I’ve heard that unhedged ETFs yield better returns over time, say for a period of 15 years, but I’m wondering if US dollar ETFs are even more preferable, considering that I’ve already got some US cash ready to deploy.

Thanks for clearing up my confusion!

Q: Good Morning.

Regarding Firan, they reported earnings of .01 vs est .06 They seem to be making good progress on building the business considering:

Achieved sales of $25.5M, an increase of 29% over Q2 2016
Grew Aerospace segment sales by 60% over Q2 last year
Grew Circuits segment sales by 17% over Q2 last year
Gross margins increased by $0.9M or 18% over Q2 last year
Closed the Teledyne PCT facility at the end of Q2

Q2 profitability impacted by the extension of Teledyne PCT operations and ongoing ramp up of activity of Chatsworth operations, which are expected to continue to ramp up through Q3

May I have your thoughts? Thank you

Q: Hi Peter, Ryan, and Team,

I'm a bit confused with your answer to Florence about TXF. Your answer said "This one overlays 75% of the portfolio with call options......".

However, according to the First Asset website: "Distributions are paid quarterly and no more than 25% of the portfolio's securities will have call options written upon them at any given time".

If no more than 25% of the portfolio have call options, doesn't this strategy mean that an investor wouldn't be giving up as much as your answer indicates? Am I missing something here?

Thanks in advance for any clarification.

Q: Hello 5i,
I am looking to increase my U.S. and International exposure. I currently hold VIG-N, JNJ-N and a number of Canadian ETF's which also hold U.S. equities. I am open to either USD or hedged products and would like a yield in excess of 2.25% if practical. Since I look to yield for income I was considering ZWA. Would you have any other options you would prefer over ZWA?
On the Int'l. side I hold CYH and ZDI and am happy with both; I held VEE at one time, but the yield is on the lower side for my needs. Should I just increase my holdings in these two or, again, do you see a better option? I could move out of one or both of those if you think there is a more compelling option I'm missing.
As always .... thanks so much for all of your help - very much appreciated!!!
Have a great summer!!
Cheers,
Mike

Q: Greetings Peter and company,

Having been a do it yourself investor for over 50 years and a committed index ETF investor for the last 10, I am very impressed with what you are doing.

Assume that investors put half their money into a US index ETF (say SPY) and the other half into a US money market fund. They re-balance when the ratio changes by 10% in either direction and withdraw 1% quarterly to cover living expenses. Will this no-brainer portfolio grow over the next decade? Will it equal or even outperform the i5 Growth Model Portfolio? (Projected 12% annualized long term return. Since the bottom of 2008, the S&P 500 has had a 14.5% annualized return.)

I would appreciate your views on this. Your responses, as far as I have seen, have been uniformly thoughtful.

Thank you.

Milan

Q: It seems obvious to me that AI will be a growing and disruptive field for investment. What companies would be best for investments in this field. Are too many of them private or too small to be investable? I prefer Canada but will go to the US if necessary.

Q: Hi Gang
Our parents are in there 80 /90s good health They need 5500pm Have 300-400 m to invest for income. Their income is 3600 now 200 m in other investment. Property worth 400m. Own everything free and clear. Also do credits carry to next year

Thanks Mike B.

Q: I would be grateful if you could advise me when NVDA will release its quarterly earnings. Also please provide the analysts'consensus with regard to the results.

Also, and this is probably off the wall, but in view of the apparent high value of NVDA and of the billions of dollars on the Microsoft, Apple, Google balance sheets, do you think NVDA could become a take-over target?

Thank you, Peter

Q: Looking for a home renovation supply company on the TSX doing similar business to Home Depot and Lowes. Only one I can come up with showing any promise is CWX with an 8.9 yield and a PE of 6.4. What do you think of this company and do you have any other that you would recommend? Thanks guys.

Q: Howdy Team 5i:

This Company was one of Michael Smedleys top picks on BNN's Market Call on Friday July 14th. It has a sizeable market cap. Can you please give me your analysis on future prospects for this company! Thanks. Stan.

Q: I have 37% (200K+) of my portfolio in CN Rail. It is in a taxable unregistered account. I would like to diversify a bit but afraid of the tax repercussions with selling (Up 100%+ capital gain). Also can't find many stocks that have been able to beat CNR over the long term. CN is basically a monopoly and a diversified hauler of goods. Note my registered accounts are fully invested. I try to sell 10,000 of cn stock a year to invest in other stocks but at the same time buying 15,000 of cn.

1. Should i be concerned with such a high % portfolio in one company? What is recommended
2. Should i be so concerned with capital gains tax?
3.What companies should i be looking at with the selling of CN that has been consistent with future growth?
4. Should i continue with 10% of income spent on cn stock. first 6% gives employee an extra 35% of stock.

Q: Is the future(and or share price)of this company, more or less dependent on the price of natural gas?
Is the company committed to a long term dividend?

Q: Hi Gang

What is your over all take on Reits given BOC rate increase. Do u think it is priced in.

Thanks Mike B.

Q: Hi,
Further to your reply: "ENB pays its dividend in Canadian dollars. You could buy it in the US, in a US account, and dividends would be converted, but you would incur exchange fees.
Rather than looking at this strategy, we might instead holding some US exposure in general, for general diversification, and avoid trying to predict currency movements"

Since I'm seeking USD income, I'm looking for the biggest bang for my buck (so the Dividend Tax Credit is something I would want to take advantage of). Would my strategy work with something like a ENB.PR.U (USD preferred)? Or does the same currency conversion issue occur. Thanks again.

Q: Hello,

I bought Intact Financial a few years ago for the rising dividends. But every year seems to bring increasingly catastrophic floods and forest fires. Am I picking up nickels in front of a steam roller?

Q: Hi All at 5i!! Hope the weekend was good!! Would now be a good time to invest in Suncor? Would you have any better oil/gas suggestions? Cheers, Tamara

Q: ,,It is almost similar to a private equity firm where the investments will need time to grow in value and then the holding company may need to do something (sell, IPO, etc,) to actually realize the value and get some liquidity.,,
I do not understand your comment. I have a 60% gain. I can sell now and realize the profit. What do I don't know?

Q: Hi
What impact, if any, would rising interest rates have on DFN share price. I like it for income. Would this be a good time to add to a position?
Thanks for all you do
GUY R