Investment Q&A

Q: Do you feel ZHY is a stable retirement income? it pays good dividends over 6%. Is the risk high?

Q: Hi Folks,
My question is about the concept of a 5 year "stepper" product described by one leading financial institution as having a one-year term and automatically renews for four successive one-year terms on the maturity/anniversary date. The annual interest rate automatically increases on each maturity/anniversary date. The investment may be cashed in full or in part on the maturity/anniversary date.
Rates are year 1 - 0.85%
Year 2 - 1.10%
Year 3 - 1.75%
Year 4 - 2.00%
Year 5 - 3.55%
Effective Annual Yield - 1.846%

For someone who has a portion of their portfolio in GICs, does this type of product make sense? What are the pros and cons please and thank you. Michal

Q: Hi Folks,
Everyone is looking for returns, and income investors are searching for interest and yield. Forgive me if I missed a previous question asked and answered, but would it be possible to give a quick list of the type of fixed income products in the low risk category. For a very conservative portion of a portfolio, with a five year hold, which product(s) do you suggest offer the best risk/return trade off given the current rate situation in the market today? How far on the risk spectrum does an investor need to go to achieve a reliable 2-3% return?
Thank you, Michael

Q: Would you know of any reason that there is a further decline in this debenture? The review of the company's financials and other news on their website has provided no indication of any financial issues, on the contrary, there appears to be sufficient liquidity. I thought debentures from established companies would have stability...
Thank you for further clarification!

Q: Hi Folks,

I know your main focus is stocks, but if you have some cash to invest and you don't want it it equities, would you prefer XBB or XSB right now? Or is there another bond fund alternative I should look at for $CDN. This if for a long term hold.

Thank you. Michael

Thank you.

Q: Hi Folks,

I know your main focus is stocks, but if you have some cash to invest and you don't want it it equities, would you prefer AGG or BSV right now? Or is there another bond fund alternative I should look at for $US. This is for a long term hold.

Thank you. Michael

Q: Re" Chris's question where to park house sale proceeds - I too just sold our house (in the process of building another over the next year) and am looking for short term low risk yield. I opened a Tangerine savings and checking account - who offer 2.5% for the first 5 months ($million max) Offer code is "EARNMORE". You have to open both a checking and savings account to qualify. No restrictions after the 5 months and the advisor I talked to told me that before moving the money out - to talk to them as they may extend the offer or provide another offer at that time. Question for 5I - With CDIC limits at $100K - would moving the max over for the 5 months be seen to be "too risky". I really don't want to have to open a bunch of accounts to lower what I see as pretty low risk of bank failure. Thanks

Q: about this previous question, when you click on the link provided it goes to Rate supermarket site with the rate you quoted, but when you go to the Tangerine Site the rate it is substantially less, why is that? https://www.tangerine.ca/en/rates

Q: Good afternoon 5I.
Today Chris had a question regarding where to put his money from his home sale. You guy suggested a one year GIC that's paying 2.15 %.
My question is who is offering this GIC?

Thanks
Asked by Stephen on September 09, 2020
5I RESEARCH ANSWER:
Tangerine Financial offered this rate on one year non-cashable terms this morning. This was posted here.

Q: Good afternoon 5I.
Today Chris had a question regarding where to put his money from his home sale. You guy suggested a one year GIC that's paying 2.15 %.
My question is who is offering this GIC?

Thanks

Q: I've just sold my house, and the cheque has been deposited into my Investorline non-registered account. Not quite sure what to do with it for the next few months. I've read the comments on PSA, and you've suggested money market funds too. I don't know anything much about them - is that something you buy online, or through Investorline? What would be your recommendation?
Thank you

Q: hi 5i. i bought a gov of canada rr bond dec1 2026 it was worth 24000 at issue it market value now is $ 50,010 does the value drop down to 24000 on dec1 2026 thanks as always brian

Q: With governments pouring money out the window inflation and declining bond prices seem to be a certainty. Where do you go for safety? How would CLF compare to a fund like HFR? Are equities safer at this point? Always value your opinion, thanks.

Q: What is your opinion on using VCIP as a 'slightly riskier than cash' investment vehicle for a holding period of 6-12 months? It is obviously riskier than HISAs/GICs/PSA, but do you think it is riskier than XSB/VSB/HFR? There is an equity component to VCIP, but given its greater diversification compared to XSB/VSB/HFR, I wonder if, paradoxically, it might actually be 'safer'. I note that when the pandemic hit, even VSB/HFR fell quite precipitously. Would you advocate a mix of VCIP/VSB/HFR instead? If so, how would you weight the three? Thank you.

Q: Follow up on ECN debenture,
Priced at par.

Thank you.

Q: Good morning,

Could you please offer an opinion on this mornings new issuance of a debenture:
ECN Corp 6%, Dec31/2025.
Is it priced well and a good credit?

Thank you,

Q: Good morning 5i. I am considering "parking" about 10% of my portfolio in "cash equivalents". Are CVD and CPD your preferences in this case as I see they pay out roughly 5% which seems a reasonable risk/reward scenario? Are there other options or recommendations that you might consider? Thank you in advance.

Q: Hi Guys
I have always been nervous about parking money in PSA high interest savings Account as it is not covered by CDIC
Are my worries here unfounded.?
Maybe my concern comes from the issues with Commercial Asset backed paper years ago.
If you can put my mind at ease on this issue it would be appreciated
Thanks Gord

Q: I am very green when it comes to the purchase of bonds. Please help me understand the following transactions. I bought 26000 units at 101.275 for a yield of 4.25%. My understanding is that I paid $26,331 and I will get $26,000 at maturity. In the mean time I will collect the yield. Right? or...
The second transaction is when I bought 25,000 units at 99.25 for a yield of 2.58%. How much principal will I get at maturity?
Thanks for you welcomed answer.
Yves

Q: I would like to park some cash, with the eventual purchase of a residence and am interested in more than GIC's and I understand that this will entail more risk, though less than equity risk. What do you think of MFT, XHY, PYF, PSA, HFR and PMIF and would you split them in equal percentages?
Thanks for your service

Q: I have a GIC maturing today in my RRSP. I am looking for an alternative fixed income choice as all GIC rates are now again abysmal. Any suggestions or would it be just as well to take a high dividend yield from one of the Canadian banks, telcos or utilities?