Investment Q&A

Q: Thanks for your work, much appreciated. Regarding dividends from Canadian banks: I have problems figuring they won’t cut. The crisis will take months or most likely 1-2 years (vaccine is the only definitive solution, what we are doing now is only mitigation). The debt load will be very large (mortgage, loans, etc.). Banks will have to keep some money for provision.
Am I missing something ?

Q: DFN, the high-dividend split share fund that people sometimes ask about, has missed its first dividend since its inception in 2004. It even paid the monthly dividend throughout 2008-09. I see the share price is up this morning. I don't think people realize they will not receive the dividend and that it could be many months or even years before the dividend returns.

Q: Thoughts on buying Genworth or Great West at the present time? Looking for a long term Dividend.
Thx

Q: A subscriber named Peter asked for your opinion on GMP.PR.B preferred stock on March 17, but you didn't really answer his question. Instead, you commented on the common stock. Please don't do this again as I am NOT interested in the common stock. I am interested in the preferred stock, which is now down $3 from when Peter asked his question. I know this is a lower-rated pref, but surely the current discount is overdone?

Clearly, in the current virus-riddled economic environment, GMP will have to cut the dividend on its common stock. However, they cut the common dividend to zero a few years ago, but kept paying the preferred dividend. What is your opinion on the coverage for the preferred dividend? Would you recommend that preferred stockholders sit tight, buy more, or sell?

The rate resets on March 31, 2021 at 2.89% above 5 year Canada bonds. Even if the yield on 5 year government bonds goes to zero they'll pay a 2.89% x $25 face value = $0.7225 annual dividend. This seems attractive to me, or am I not properly understanding the yield calculation?

Q: Should I be concerned about this? It is down about half its value. Or should I ride it out?
TORONTO DOMINION BANK 4.75% NON CUM 5YR RT RST PFD SER 20 NVCC

Q: How would you rank these bond funds. I sold FTB and bought PMIF but it is not performing well. Bond funds have not performed well due to the drop in interest rates. I am retired in my late 70’s.

Q: What are your thoughts on this fund now that a lot of the bleak scenarios you referenced in past questions are now upon us? Also, how does Quadravest rate in your opinion of fund managers? Thank-you.

Q: Good morning. Again, thanks for keeping calm and reassuring. My question relates to Canadian banks. I have positions in all five of the big banks and all are down. I’m thinking this might be a good time to sell some bank positions and increase my holdings in others. Does this make sense and how best to execute? Do you have a sense for which banks are likely to recover sooner than the others? Keep that crystal ball polished. A lot of us rely on your guidance. Kindest regards

Q: I have large positions in these two companies that I have held for a long time. Is the dividend safe? Should I average down into these names? If so, what entry prices would enter on?

Q: At what point do the banks become a screaming buy? If TD Waterhouse has correct numbers, several are now trading below book value. I have only seen this a couple of ties in my life and it has always worked out okay in the long run. Have I missed anything?

Q: Thanks for your great insight as we move through these uncertain times. U.S. Banks will be under pressure with the current virus and oil crisis taking it's toll. Some (or all) may need a bailout. What is your opinion on the risk going forward for U. S. banks, and are there U.S. Bank ETF's that trade in Cdn. $$'s on the TSX, that you feel are reasonably stable longer term, and offer the best way to play this sector at some point going forward. Thanks. Warren

Q: I tried my bank chart system and they do not show 15 year charts.
can you tell me what was the low back the great recession 2008/2009 period, for these 2 stocks. It should give some perspective on where we were during a severe recession.

Q: Would you add to SLF at $37?
Any reason for the recent weakness outside a bad market? Would they have higher than usual insurance liability in this environment? (Such as business interruption clause or other). Thank you!

Q: Hi team - I was hoping to get your general thoughts on leveraging during this time of turmoil. Some of the Cdn banks are throwing off significant yields, CIBC for example 8.09% at the time of writing. I can't find any info on when they last cut their dividends even during the 2008 crisis. I'm considering using my HELOC at 3.45% (interest payment s only) and buying one of the banks and collecting the difference between the yield and interest charges. As well, writing off the interest payments next year as carrying charges in a non registered account and thinking the stock will grow in value over the next year or so. Is this a sound strategy or should I shake my head, your thoughts? Thanks.

Q: Looks like a good entry price here, do you feel the dividend is secure.

Q: I have held the above stock, (TD) for several years and recently sold,, as it has easily been the most volatile stock in my portfolio. I am thinking of spreading the risk by investing in a good bank etf or reinvesting in one bank when the situation calms down. What are your thoughts, and if the etf route is best, which one or ones would you recommend.

Thanks, David

Q: Do you have an idea why IFC made two preferred share offerings and one medium term note offering in the past weeks?

Q: Retired dividend-income investor. I currently own BNS and RY. I was planning on topping up BNS, then read an answer about harvesting capital losses. I had already take enough losses to cover my gains to look after 2020 income tax implications.
I selected BNS for its international diversification and RY for its USA diversification.

I am now considering harvesting my new BNS capital loss and was considering either CM or BMO for immediate replacement, wait a bit then do my original top-up later. Which bank to you consider the better replacement?

Thanks...Steve

Q: Why are all the insurance companies getting slaughtered? Because of ultralow interest rates? Good buy at these prices? Think the dividends are safe?

What would be your favourite?

Q: I am a buy and hold investor with 5 to 10 years of time horizon.
Have the following 7 stocks in Canadian financials in the order of their weights in our portfolio. Financials makeup roughly 7.5% of the total portfolio including cash positions and we like their dividend. TD, RY, BNS, BMO, SLF, CM, and MFC. I like to reduce exposure to financials and also like to reduce number of different shares. Two questions:
1. Is 7.5% a reasonable weight considering the current situation?
2. Which one of these I should sell to reduce financial weight and to reduce the number of shares in financials?