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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: Hi,
if you were putting a fund together comparable to VGG, but for Canadian equities, what might be your first 5 top picks assuming the same criteria for the ETF? Also, what would be your 3 honorable mentions?
When comparing CDZ and VGG what are the main differences in terms of the stocks that make up these two ETF's?
Many thanks,
Dan
Read Answer Asked by Daniel on October 27, 2020
Q: ARK Invest recently produced a Bad Ideas Report for 2020.
The one that particularly caught my attention was on railroads. Their thesis is that the trend in place since early 2000's in which rail had been taking share from trucking will reverse with the commercialization of autonomous electric trucks.
They believe that during the next five years autonomous electric trucks will provide faster and more convenient door to door service , increase productivity , lower costs dramatically and take share from rail.
While their projections may be aggressive , they have a pretty good record at identifying disruptive trends. And , as someone who has owned CNR for over a decade and always considered it a forever hold , this caught my attention.
Would appreciate your thoughts .
Thank-you.
Read Answer Asked by William on October 27, 2020
Q: I have held these companies for about a year and have basically broken even. Being retired now and partly relying on dividend income, would it be a good move to sell these 2 companies and invest in other blue chip dividend payers and forego possible capital appreciation in these stocks. It does seem to me that these 2 companies have languished compared to my other tech exposures. What 3 or 4 dividend payers would you recommend for stable dividend and increases and some growth potential.
Thanks, as always, for your informed input.
Kevin
Read Answer Asked by Kevin on October 27, 2020
Q: Peter and His Wonder Team
I realize oil and gas are high risk for numerous reasons. However I am wondering if this trust company may be suitable as a contrarian play. Are they stable in the long run. There dividend is almost 30%...which seems impossible? Even if they cut it in half it would be great. Would it be at least a hold for current owners of the stock? Your assessment and comments would be appreciated. Thank you!
Read Answer Asked by Ernest on October 27, 2020
Q: I/we have held XEI for some years across 2 TFSA accounts and 2 RRIF accounts (a holdover from a past full service investment service at a major bank). Based on original costs we are down 16.65%. This fund has performed badly this year despite some market recovery. I am considering selling a good part of these positions to purchase individual Canadian dividend paying stocks, growth stocks or other ETFs even though we can't realize any tax losses here. Is taking this loss a good idea? Should we hang on? Ideas and comments please. The good news is that, at the same time, we established positions in XSP and IVV which have done well. We are mid stage retirees with good cash flow and aiming to leave a nice legacy for family.
Read Answer Asked by Maureen on October 27, 2020
Q: Hello 5i Team

Please give me 10 Canadian stocks to own in non-registered account. Also, I have both BEP.UN and BEPC in non-registered account. Is it Okay to keep them both or should I just merge them into BEP.UN ? Thank you very much and have a good weekend !
Read Answer Asked by Yasushi on October 26, 2020
Q: Hello. The other day, a friend of mine told me he will be retiring soon but because he doesn't have sufficient income, he is planning to refinance a $300,000 mortgage on his fully paid principal residence and invest that amount in Canadian large cap dividend stocks.

The difference between the 5 years fixed mortgage rate (1.6%) and the dividend he earns from stocks (6%) will be around 4.5%. $300,000 x 4.5%= $13,500/ annum. Given that dividend stocks such as Enbridge, TD, BCE, some REITs are quite depressed at the moment, there is also the possibility of capital gains as well.

I wonder about the risks of such an action. The 2 worst scenarios I can think are that (1) The pandemic will linger for many years and stocks will not recover for a decade or longer (esp. stocks like O&G stocks like Enbridge). It may force even the largest institutions to stop paying their dividends. (2) As a result of the financial hardship and further stock market crash, there will be capital loss at the end of the 5 years mortgage term. Besides these two scenarios, are there any risks that you can think of?

Supplementary questions:
1) Do you think the risks are higher than the reward?
2) Is the current market condition at this moment a good time to do something like this?
3) Lastly, if I were to do something like this, please suggest several price depressed large cap stocks that you think their dividends could be reasonably secured through 2021.

The answer may take you longer than necessary. Please deduct as many points as you wish. Thanks!
Read Answer Asked by Esther on October 26, 2020
Q: Purely in terms of dividend sustainability could you please rank TD, RY, BNS, NA, CM and BMO and briefly why? Thanks.
Read Answer Asked by Gary on October 26, 2020
Q: Hi, solely in terms of dividend sustainability could you please rank TRP, ENB and PPL and briefly why. Thanks.
Read Answer Asked by Gary on October 26, 2020
Q: Hi, purely in terms of dividend sustainability could you please SLF, MFC and GWO and briefly why? Thanks.
Read Answer Asked by Gary on October 26, 2020
Q: Hi,
are the dividends paid by CDZ all eligible for the dividend tax credit or is there a portion that is return of capital? Sorry, I couldn't find it on Blackrock's web site.
Also, what would explain the negative performance of this ETF's in the past year as compared to say the XIC or XIU?
Thanks,
Dan
Read Answer Asked by Daniel on October 26, 2020
Q: Do you have a preference of TMX Group over Andrew Peller for growth over a 5 year period. They both pay a similar Dividend but TMX has had better dividend growth.Thanks
Read Answer Asked by John on October 26, 2020
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