Investment Q&A

Q: I am perplexed by the strength of the markets over the last few months given the situation in the real economy. Are you aware of any site which identifies the source of money inflows and outflows? I would like to understand whether this market is driven by professional/institutional investors (smart money), the government/Fed, or retail investors (dumb money).

Depending on the source of the money inflow, it might give some indication as to the sustainability of this market.

Any thoughts you would have on this question would be most appreciated and valued.

Thank you for this excellent service.

Q: Could you provide internet sites to give me information on insider buy sell information for both Canadian and American stocks

Q: Peter,

Dividend sustainability is a significant concern to so many investors. You mention Free cash flow as a good measuring stick. Is there an industry consensus of how this is determined? For instance on Telus ( FYE Dec 31,2019) annual report shows free cash flow of $932m, with a disclaimer note about no industry standard . Morningstar shows $33 million free cash flow for the same period. Both sources show $3,927m as operating cash flow . Which one do you recommend as the most accurate predictor of the ability of a company to sustain or increase their dividend payouts ? If it is free cash flow, what source / formula should one use?

Thank you,
Paul

Q: Thank you verymuch for your answer to my rather meandering question the ther day. I suppose the gist of the question was whether, given the dangers of these two etf's in the present context, whether i should move away from indexing and pick individual stocks. You say that if i pick a good selection of ten individual stocks, i should have good diversificatin and might not benefit that much from an etf. The big fear i have of individual stocks, though, is of one of them blowing up or being severely disabled. That is in my view the main thing that an etf would help me with. Now, i know that no one else can make these decisions for someone else. It helps me to clarify the problem by running it by knowledgable people like yourselves. Thanks

Q: We have our accounts at TD. From our USD cash acct, we bought RTX today. The receipt shows $66.01 per share with one lot of 400 shares @ market, estimated principal $26,404.00, commission 9.99, estimated total $26,413.99.
Why the estimated amounts?
After COB we saw in account activity that the total price increased to $26,419.99
Its a small amount but is it legit?
Many thanks in advance.

Q: I found your article regarding the difference between the Fang stocks and a small cap stock index very informative and interesting. Perhaps an even more interesting comparison, at least for me, is the difference in performance between VOO and RSP. One a market weighted US etf and the other an equal weighted. There is quite a large divergence between these two in the past while. VOO has the top five holdings as Fang stocks--over 20% of the total portfolio. RSP has no fang stocks in the top ten.
It has me thinking. But, what conclusion to draw? I have been wanting to move away from individual stocks to etf's, especially in my US holdings. But, this makes me wonder whether I wouldn't be a lot better with individual stocks, say the top ten that you mentionned in response to a question today. In that way I wouldn't be burdened down with a group of non performers, as in RSP, nor too heavily invested in Fang stocks, as in VOO, in the event of a future crash.
I know that it is not too good to change strategies often but I am quite perturbed by this. I don't know if you can offer a comment on this or not. But, I appreciate 5i as a sounding board and any comments you have are always helpful and useful
thanks

Q: this is a link for Ellen who asked about ethical investing. This is a Canadian site but also looks at US stocks:
https://investingforthesoul.com/podcasts/

Q: Could you please explain the following questions in terms easily understood. Price/earnings - what are reasonable numbers/the low and high end and I gather the lower the better - is that correct? Debt to equity ratio - same thing as above but 1.15 - is that $1.15 in debt for every dollar you own? Price to book - what kind of numbers am I looking for there, i.e. if the price is $80.00 and the book is $40.00 - is it 2x book?

Q: Hi,
This question is more curiosity than anything - is there a reason that on May 29th the volume on the TSX actually appears to have exceeded any of the days in March as the markets slid worldwide? I thought that as a market recovers, often the volume decreases as things settle down, so the May 29th spike piqued my curiosity. I use Stockcharts.com and saw this on a daily chart. Thanks for all your hard work educating us!
Dawn

Q: Hello,

My partner and I heard about 5i from a friend whose been using you for many years. You came with the highest recommendation.

I feel like I should be copying one of your portfolios, especially due to my lack of knowledge, but it is very important for me that my investments to follow my ethics.

I would like to know which companies on your balanced and growth portfolios would be highest on positive environmental, social and corporate governance, which are low and should be switched and for which companies. I'm happy to do research, but I'm struggling to navigate the important statistics and feeling incompetent in finding good resources. I have seen your ESG scores (https://www.5iresearch.ca/blog/ESG-tsx-companies) and would be keen to know where to find information on how they are created. I would also appreciate other resources that you think would assist in building a portfolio, or simply which companies you would put on it.

Thank-you,
Ellen Perkins
Ucluelet BC

Q: Is the delisting of Chinese companies on US stock exchanges a real possibility or more noise. How might Alibaba be impacted. Should investors sell and watch or ride it out. The senate bill would require that foreign companies let the Public Companies Accounting Oversight Board oversee the auditing of their financial records. Does Alibaba currently use American accounting methods - GAAP?

Q: If ENGH is expensive as your previous comment then KXS and SHOP must be super expensive. Comments please.

Q: Thank you for your answer to my question of May 28th, about forecast equity returns by geographic region/ country. You provided a link to Star Capital's site, which forecasts the US to have amongst the lowest equity returns globally over the next 15 years.

I would appreciate you advice about this forecast. Do you agree with this forecast? Which regions/countries of the world do you see best to invest in over the next 5-10 years? In Portfolio Analytics, what rates of return are you using for each geographic region/country to forecast the long-term expected return for a portfolio?

The CPPIB is now invested 90% outside of Canada. What are your views for an individual investor? Should individual investors be taking a similar position, and having most of their portfolio invested globally?

Thank you again for your excellent advice, and this wonderful service.

Q: Further to Harrys question on CIPF insurance with brokerage firm. We have 3 acccounts one joint and one in my name and one in spouses name, (1 cash acct, and two TFSA's) Does the one million apply to each account or for all 3 combined.?
I really appreciate your help at all times

Q: Hi 5iTeam,
Suppose I have $250k in each of my RRSP , margin, TFSA, RESP and cash for a total of $1,250k with a brokerage firm. If the firms becomes insolvent, how could CIPF cover my investments? And would CDIC come into play in the aforementioned scenario?
Cheers,

Q: Just trying to understand the short term effect on the market of the 10 million units in the secondary offering. I read that the underwriters committed to selling the shares for $48.85 USD. Does this mean selling in the open market or do they typically have buyers of big blocks lined up to soak up the units? I'm assuming that, if the units are to be sold in the open market, this will put a ceiling on the SP for quite a while since the 20 day avg volume of the US and Canadian markets is about 600,000 units.

Q: If one was to place some stop loss points to various parts of a portfolio,
1. Would you base the number on a moving average and if so what time frame? 100 day moving average?
2. For ETFs?
3. For Canadian equities?
4. For US equities?

Thank you............Ron

Q: When considering weightings of a particular stock do you look at the weight as a percentage of just a stock portfolio, or would you consider it as a percentage of stock portfolio plus defined pension. For example, CSU has grown to 9% of my stock portfolio, but if I include my defined pension it is 3.5%. So if I consider only the stock portfolio then I would consider trimming (to maybe 7%) whereas if I include my pension in my calculations I have no need to trim.

Q: Could you please explain what this means when a stock "does a secondary".
I am thinking that when a company/stock first goes public, they issue a certain amount of shares to raise money. Then, I am thinking that if they "do a secondary" - they issue more shares? So then the value of shares you have are less? Could you talk a bit about this.
Thanks so much for your help
Margaret

Q: Why is this stock so volatile in the $65-72 range