Investment Q&A

Q: Hey 5i,
I am a new investor and member of 5i. Upon review of your Reports and Portfolios I have decided that my portfolio will be a mix of Income and Growth. My question is as to the number of stocks to purchase to balance my Portfolio. If stock A is valued at $100 and Stock B is $25, should I purchase 4 of A ($400) and B ($100) , or 1 of A ($100) and 4 of B($100)?

Q: This is a strategy question that has to do with using margin debt. I am wondering what you think of buying on margin. Last year for the first time, I bought on margin, roughly from fifty to one hundred thousand at various times throughout the year. This is a small percentage of my portfolio and thus not too dangerous. In doing my taxes I see that I paid $2480 in interest. The government gave me back $1187 of that as carrying charges. That means there was $1280 left. I bought all high dividend paying stocks and so expect that I recuperated or surpassed that amount in dividends. Then I get the capital gains for nothing. ( Or, the capital loss, also.).

So, I suppose I am asking you whether it is worth the trouble? Especially when I have 20 or 30 percent fixed income. Perhaps I should use that if i want to try to leverage things a bit? I am thinking that it may be a good stragegy when one feels that stocks are really low. But, the rest of the time it is hard to make any money. But, i am more interested in your thoughts on the strategy.
thanks

Q: Your PA has recommended reducing my Tech holdings and increasing my US and International allocation. I would like to reduce Tech by about 1/3 and use those proceeds for purchasing VUN and XEF. VUN appears to have about a 20% tech component, so I would need to reduce more than the 1/3 of my current holdings to offset that VUN tech portion. Your recommendations on which equities I should trim/eliminate would be very helpful in trying to sort this out !! Many thanks, as always.

Current Tech % holdings in RSP/TFSA/ UnReg accounts are approx:
ENGH 2.5%
KXS 3.5 %
OTEX 3..5 %
SHOP 3.5%
SYZ 3.8%
PHO 1.3%
and in RIFs - for yield:
AB 3%
ET 1.8%

Q: I thought that other members would find this article about ride sharing in other jurisdictions interesting considering all the recent ridesharing IPOs.

https://www.nytimes.com/2019/05/05/technology/ride-sharing-future-electric-motorbikes.html

Q: What does yesterdays news release mean and how will it impact the share price from now until May 20th?
VALENS ANNOUNCES ACCELERATION OF WARRANT EXPIRY DATE

Q: This is not a question about this particular company but simply an example. The notice today on earnings for Carbonite stated:
Non-GAAP EPS were $.44 above estimates for $.36
Net EPS was $.06 missing forecasts by a nickle
It goes on to talk about actual and estimated sales both on an Non-GAAP and GAAP basis.
Can you explain what the difference is between the GAAP and Non-GAAP numbers? and how Non-GAAP earnings of .$44 turn into $ .06 when shown on a NET basis and for your DIY investors, which should we pay attention to?

Q: How would you screen for momentum stocks? What would be the criteria for getting in and out? I'm looking for info on how to make these trades for short and medium term. I'm ok with medium to high risk and will be working with 5% of my portfolio.
Please deduct as many credits as needed. Thanks.

Q: Hello,
what risks, if any, should an investor take into account when purchasing all their ETF's from the same provider? I am talking about the big guys here such as Vanguard or Blackrock. Since the ETF's are broad based there is no issue that I see with a fund manager making investment decision (are hot or cold) and these companies are large and profitable so I don't really see any risks other than general market performance. Am I missing something?

Thanks,

Dan

Q: Portfolio Analytics is recommending that I have 70% of my equities in US and international stocks. 5i has also often recommended that one should not hedge the currencies. Are you recommending that one should not hedge the currency because some ETFs charge extra for hedging, or do you anticipate that the Canadian dollar will continue to trend downwards for the forseeable future?

I am concerned that 70% foreign currency exposure is too much risk, especially given that the Canadian dollar is relatively low at the moment on a historical basis. Many ETFs, such as those offered by BMO, offer hedged and unhedged versions for the same MER. Would you recommend that I buy the hedged versions to decrease foreign currency exposure?

What is the maximum percentage of a portfolio which you would recommend involve foreign currency exposure? I am close to retirement, but will have a good pension and do not anticipate needing access to my investment funds in the forseeable future.

Thank you for this great service!
Dale

Q: Is this a good hedge to a long only portfolio?

Q: I have a self-directed RSP trading account in my name and will soon be converting it to a RIFF. My wife is the younger (63yrs) so I would like to use the lower required withdrawal rate as the schedule dictates for her age. To do this would this mean that we would need the RSP/RIFF in both our names - or could I leave it in just my name?
THX
Ralph.....

Q: Where could I find quotes and info on convertible bond issues in Canada And the US. Thanks

Q: Hi 5i,

I looked at BYND IPO, but the company doesn't seem that solid (reliance of single crop, manufacturing facilities uncertainties, potential scale of competitors, etc.).

However, I do feel that plant based proteins will become a bigger proportion of our daily diets. What is the best way to invest in this growing sector?

TIA!

Q: What's the best way to play 5G on the TSX ? Thanks.

Q: Can you please advise roughly what percentage of your questions are public vs. private? I thought I got to see everyone's questions (and ANSWERS!) and want to get a better mental model of what I am actually seeing.
Thx,
M.

Q: I have taken over all my parent's finances due to health issues. It has taken quite a while to sort through things (2 years), but I am almost done. They are both over 80, and in 'ok' health. They are thinking of 20% exposure to the market, so I have come up with the following as a plan. Do you think this is reasonable?

HISA and Cash - 100% of their past year's expenses

Percent based on the remaining funds:
57% GIC
20% Bonds
6% Preferred Shares
13% Dividend bearing stocks
4% Growth stocks


Also, any suggestions for other categories not mentioned, like trusts (eg BEP.UN)?

Thanks for your great service over the past year!

Fed

Q: Curious if you saw the piece on dividend investing in the G&M this week. Would welcome your response to this article which basically
questions the value of dividends and the whole philosophy.

Q: My question has to do with investment allocation in accounts in order to minimize tax burden. Bellow is what I have been able to piece together. Could you please comment on my list? Also, what would you say is best in a CCPC to minimize taxes?

Thanks!

RRSP:
Interest bearing (GIC, Bonds)
US dividend stocks
US ETFs of underlieing US stocks

TFSA:
Interest bearing (GIC, Bonds)
Growth stocks (ie capital appreciation stocks)

Taxable account:
Non US foreign stocks
ETFs of underlieing foreign stocks
Preferred shares

CCPC (Canadian Controlled Private Corporation):
Interest bearing (GIC, Bonds)
Growth stocks

Q: Hello . My house is paid off. I would like to set up a reverse mortgage or home equity loan to cover the cost of running it. Which 5 dividend payers would you recommend for my project? Is my plan reasonable and which is better home equity loan or reverse mortgage? Much thanks for your excellent service.

Q: Hi,

I have an accounting question about deferred revenue.

Deferred revenue represents customer payments received for rendering services to be provided subsequent to the current quarter. In the balance sheet statement, deferred revenue is classified as a current or long-term liability.

Let's say in the first quarter, a company receives one million dollars for services to be delivered in subsequent quarters. Will that one million dollars be registered as revenue in the first quarter? Or will the revenue be recognized in the subsequent quarters when the services are rendered?

Once the services are rendered, deferred revenue will be deducted from current or long-term liabilities, those this deduction affects the cash flow statement? The revenue statement?

Giles