Investment Q&A

Q: What would you consider to be the ideal sector weighting for a Canadian equity portfolio? (Discretionary, Staples, Energy, Financials, Health Care, Industrial, Technology, Materials, Communications, Utilities) And what is your top pick in each space?

Q: What sort of circumstances would a company redeem their preferred shares? Are they more likely to be redeemed if they are trading at a premium (above $25.00)?

Q: You mentioned in an answer that Small Cap stocks tend to get a bump in January or something along those lines. Can you expand on that in regards to how long historically this period has lasted, do Micro Caps also get a bump and might this be a good time or when is a good time to sell out of some of my more risky holdings that I don't want anymore?

Thanks, new site is great.
Craig

Q: obviously i get the year end tax loss selling, but i do not quite get the year end profit taking i am seeing in yangarra, the stars group,savaria and some others especially in a strong tape.
oil has held up pretty well, are oils selling off because of pipeline bottlenecks or something else, yangarra has been down 5 days in a row.
please explain the year end profit taking, why would anyone sell to pay the tax. dave

Q: I would appreciate your advice on how to manage the more commodity based holdings in my portfolio - in this case, sepcifically Methanex although I hope one day to be faced with the same problem with my oil stocks. I tend to be a buy and hold type and only sell to keep the holding below 7% of the portfolio or if the business rational changes. Is this the best strategy to manage MX? You noted in a question the other day that you were unable to ascertain why it was rising in price. Is it best, therefore, to sell some now (I am up 20% - 30%) and keep it as a smaller holding in the portfolio or with commodities is it best to take a more "go all the way" approach and ride the commodity pricing wave so as not to sell this type of winner too early? Implicit in this strategy is the theory that the company will only do well while methanol prices are high and then the stock will drop significantly at some point. Or is my thinking all wrong and I should treat it as I would any other company?

Appreciate your insight.

Paul F.

Q: A great starting point to learn what Bitcoin is really all about would be to read the 'Bitcoin White Paper'. Quite technical, but it outlines the foundations upon which Bitcoin was originally constructed. Note that currently Bitcoin Cash (BCH) follows most closely what the original paper outlines, not Bitcoin (BTC). Also, should any investors here be accumulating a sizeable position, they may want to look into secure hard-wallet options like Ledger/Trezor. Do not trust the exchanges to hold any cryptocurrencies for you, transfer them to your own (hard or soft) wallet after exchange. Most lost/stolen Bitcoins are attributable to exchange mismanagement and/or security flaws taken advantage of by hackers.

Q: Do you find tmxmoney.com a good website for quotes and business news in general ? Which website do you usually recommend ? Thank you .

Q: Most of my international (non-USA) holdings are ETFs that trade in US dollars on US exchanges. This adds a layer of FX (US dollar) into the equation when considering the performance of these holdings. With the quick and drastic FX moves that are becoming more common, I’m starting to loathe the FX volatility and believe that my other US equity holdings already provide sufficient (US) currency diversification. What advantage/disadvantage is there in holding international equities in US dollars, and if I wanted to replace each of the above ETFs with a Canadian dollar equivalent what ETFs would you recommend?

Q: Congrats for you terrific job!
I am often wondering when you recommend certain etf over some great money manager (like phn, egdepoint or mawer) for just half a point of management fees and on the other hand, you recommend full active management with your own model portfolio.
I think with all the money flowing into indexing and closet-indexer and quants, we are gonna see some benefits in years ahead for truly and talented active managers.
With respect, your model porfolio have proven their ability to beat the index as some greats money manager (as mentionned above).
Comments please

Q: How is my TFSA doing? Has anyone prepared an analysis like this: assume one started a TFSA when they were first introduced, and added the maximum allowable contribution each year in Jan., and they received an average annualized return of X (pick some decent average)...therefore the total value of TFSA portfolio should be Y.

Q: I have an opportunity to invest in a private enterprise that has developed new technology in the music industry. The technology is both significant and international in scope but the company is still in the early stages. Capital investment seems to me to be high risk, but if the company is successful, there could also be high rewards. With 5i's experience in venture capital over the years, I would appreciate your words of wisdom.

Q: Not a stock specific question but more of a learning question. Have done well with PEO and COV but the volume of shares traded is very low. I can see these 2 companies continue to be successful and I was wondering at they grow and more investors want to get into the shares what are the options the company have to increase the liquidity of shares and are the options usually beneficial to existing shareholders?

Thanks
Sal

Q: Canadian companies that pay dividends in U.S. dollars: In your Nov. 29 answer to Patrick, you listed some companies; MG, MX, BEP.UN, AQN, TRI, OTEX, CSU, AGU
Are there any more beyond this list? By the way, it may be good to identify this somewhere on your web site. Thank you.

Q: Today Norman Rothery has a column about Canadian microcap investing where he took microcaps and ranked them by low P/E and then ranked this group by recent momentum. Where can I get a Canadian service that will allow me to do this? Search databases of stocks and then rank them for criteria? Thanks.

Q: Do you know of a software program which will give you a visible pie chart to display your portfolio in terms of asset allocation amongst the various sectors in your portfolio? Thanks!

Q: Hi Peter: A few months ago Yahoo Finance changed its website resulting in a site that is much less useful and now Google Finance has followed suit. Before Yahoo and Google changed their websites these websites were very useful for giving access to financial statements of Canadian and US companies. Are there any other good financial websites that an individual investor can access that would have quarterly and yearly financial statements?

Q: Please relate briefly to:

1. is it time to reduce stocks in a heavily weighted dividend portfolio
2. assuming it is how would you treat the below L- leave R- reduce I- increase S-sell
3. buy other div. stocks that may fair better in a increasing interest rates economy,

ACR.UN (2%
HOT(0.8%
BEP.UN (4.8%
DRG.UN (5.2
DIR.UN (1.3%
HR (0.8%
NWH.UN (6%
AD (1.5%
AQN (1.9%
ZWE 1.4%
BK (6%
CHE.UN (1.0%
CHR.UN (4%
DR(1.2
PVD(4.8%
SOX (4.9%
STB (1%
MBK(1%
ENB (1.5%
RCI ( 1.2%
PPL (1%
IPL (1.5%
ALA (1.2%
PGI.UN (3%

THANKS
PS

YOU CAN CHARGE AS MANY QUESTIONS AS YOU LIKE.

YOU HAVE NOT ADJUSTED THE EXPIRY DATE AFTER MY LAST RENEWAL

Q: Marijuana and blockchain stocks seem to be soaking up most of the small cap/microcap dollars. As a result, a number of quite cheap stocks not in those sectors are being ignored. Do you think there is anything to this thesis?

Q: Just a comment on Earle’s post on Friday on the 30 day waiting period on capital losses and being able at least to adjust your cost base. I am an “active” investor, which is a polite way of saying I trade a lot. I am not recommending that for all but here is my approach to taxes. I really don’t pay much attention to the 30 day rule during the year. If I sell a loser and change my view in a week or so due to new information, I will buy it back right away so as not to lose potential upside on that stock. At year end, I get my detailed trading statement. When I am calculating my capital gains/losses for the year, I check each losing security to see if I bought it back within the 30 day window. If I did, I just don’t claim the loss. For me, missing a taxable capital loss feels a lot better than missing the opportunity to get back onboard a stock on day 10 or 15 if my view has changed rather than waiting for day 30 to pass. I agree with Earl that taxation should always be secondary in your investment decisions.
I assume my approach is fine with CRA as I do not try and claim my capital losses if they are not past the 30 day window. Your views are appreciated.
Thanks again,
dave

Q: Hi, I work for one of the big 5 Canadian banks. I have the majority of my portfolio in shares of the bank I work for. Simply through unvested and vested shares. Some are paid via performance and others are through an employee share plan. I want to manage risk so should I sell the shares as they become vested and put elsewhere or leave them be. Seeing I work in banking I understand the business moreso than other sectors so there is a comfort factor here. Has Peter experienced such a dilemma at any of the previous companies he worked for and how was it managed? thank you