Investment Q&A

Q: Hi Peter/Ryan and team:
Two questions if you would be so kind to consider.
I have read numerous times your or members use of the term 'half position' Could you explain in layman's terms what is a half position and what is a full position. Maybe an example would clear it up for me.
Question #2 is about A&W's declared dividend.
"A&W Revenue Royalties Income Fund (the Fund) (TSX symbol AW.UN) today declared a cash distribution of 13.3 cents per trust unit for the period April 1 to April 30, 2017. The distribution will be paid to unitholders of record at the close of business on May 15, 2017, and will be payable on May 31, 2017. This distribution will be taxed as a non-eligible dividend, as the source of funds to pay the distribution is a dividend from A&W Trade Marks Inc." What and why is it they state the distribution will be taxed as a non-eligible dividend. Will this then be taxed like interest? If held in a Non-Registered account will this still be taxed at the preferred dividend rate, assuming a T3 slip is issued? Thanks again for all your answers to the many questions you receive. Ken ... :-)

Q: Hi Team,
I believe the short interest in Shopify is now about 4.77% of the US float. Do you have any guidance on when the short interest can become large enough that the stock could become the victim of a short attack? I also know that SHOP has a fair bit of cash on hand and no debt, which may help protect it. Any thoughts you have about how a short interest in SHOP, or more generally any company, might become debilitating for a stock's price would be appreciated.
Thank you, Michael

Q: Hello Peter, Ryan et al:

A while ago you had shared your experience after reviewing portfolios for the members. I vaguely recall you talking about sector allocation , asset allocation and such.
Is the magical number of 100 k per year income/withdrawal ( that seems to the number most articles seem to suggest that one needs to retire comfortably) realistic in the current climate? To me it looks as though one needs enormous amount of money to generate this kind of steady stream of money.

What type of portfolios you suggest to would be seniors to generate this kind of steady stream with a lot less money!
I know you can only give broad stroke suggestions.

A suggestion: You can also through your blog give your recent experience after reviewing members' portfolios, of course masking the identity etc., That will be useful.
Thanks in advance.

Q: I must convert my RRSP to a RRIF this year. I want to add about 10 good company stocks that have 1,3,5&10 year compounded returns > 10% to boost the overall annual performance. I have identified the companies and now I want to pick the least volatile ones. I have data regarding beta, return on equity and debt to equity. I'm inclined to do my selection based on the lowest beta, highest ROE and lowest debt to equity in that order. Does this seem effective to accomplish my goal and/or can you suggest a more effective selection process? Thank you.

Q: I have sold 40% of my shopify position to take some profit and am now sitting with 6% cash in my non registered investment account. What options might be available to me to park the cash until I see some exceptional buying opportunities. Second question is that I am seeing several investment articles recommend a larger cash position as there may be a correction given very high valuations that appear to have too much "hype or anticipation" factored in. What percentage would you recommend I maintain in my investment account. I am sitting at approximately 6% in my non registered account and 10 % in my RRSP. Thank you for the great service.
Deborah

Q: Thanks for putting the Sector for each stock in the model portfolios.

Q: I don't have much experience with investing, but from what I've seen, the share prices of companies in the days after an IPO are almost always higher than the initial IPO price. Is it a no brainer then to try and get into as many IPOs as possible, particularly if they're of the "high profile" variety?

Q: I tried to search the site in the blog section for information on the 5% suggestion for individual stocks. No actual search feature for individual articles. so could I get a reason for the purpose of the suggestion. How it should work ie if you have 7% do go back to 5 or let it ride and wait what would the top percentage when to trim. I have TD up 0ver 200% at 12% of portfolio but it is a good dividen payer and stable stock??

Q: Hi.

Im borrowing funds for investing purposes.Since this is my first time doing this, I want to ask your advice if I use in non registered acct or my TFSA.I know I can get a tax credit for interest payment of the loan but with TFsa everything is tax free except theres no tax credit for my loan.Jist dont exactly known the calculafion.Im in 40% marginal tax bracket.

Appreciate your help. Thanks.

Q: Thank you so much for the sector column in your portfolios.
Decision making just became so much quicker and easier.
I bet a lot more investors will looking at balancing their portfolios.
Something I thank you for convincing me how important it is.

Q: Hint : If you keep your DRIPs in a TFSA , you won't have to keep confirmation slips and piles of dividend records, and you won't have to spend forever determining your ACB when you sell ... the lessons we learn later in life !

Q: When should one check, price or news, on the companies they hold or potentially might purchase? I check in the morning before the market opens, noon and after hours. I don't mind the reading but is three to four times a day to much?

Q: I am trying to determine when share certificates were issued. my father is elderley and can not recall. I have the certificate numbers that were recorded on a piece of paper but with no date. is it possible to determine the date and if so how would I do this? I do not know what broker was used.
Thanks for your help.

Q: My portfolio is a combination of the Balanced and Growth model portfolios. I'm torn between your advice to "let winners run" and your advice on keeping sectors reasonably balanced. Tech is up and energy is down....so in theory, I should be selling some Shopify and Kinaxis and buying more Whitecap and Raging River. SHOP and KXS are not yet over 5% of my portfolio so I don't need to sell them to reduce risk. My instincts tell me to let the winners keep running until I see some life in the energy stocks, even if that means being very light in that sector. Your advice, please. Thanks!

Alan

Q: Hi Peter:

Why would analysts raise their targets on Veresen to $20 this morning?

Thanks

Q: I am a senior , I am of the view that bonds , preferred shares, fixed income are not as effective an investment device compared to Canadian bank shares. I don't see a lot of risk over the years, but large and consistent yields. Besides liquidity in a bad recession, where else do you see downside by treating bank stocks as fixed ,long term income investments, hence overweight positions in a portfolio.Thanks to a great team for your exceptional service, Jerry

Q: Dear 5i
My son has $6000 to invest and prefers solid earnings growth companies . He does not need the money anytime soon . What stocks would you suggest at this time .
I suggested no more than 5% in any one stock but this would not be much per stock with this amount of money . How many stocks should he have and what would you consider a full position under this scenario ?
Thanks
Bill C.

Q: Do you know how to simply purchase a single stock as a gift for a child. Thanks.

Q: Can you please give a brief overview of Modernadvisor and Wealthsimple, the advantages and disadvantages of using them over the do it yourself approach and also perhaps how long they have been in business.

Many thanks!

Q: These are some stocks in my Margin Account that don't pay a dividend . In my RSP, I have BCE , ABT , BPF.UN , and REITS and royalty trusts that pay great dividends .I have a fortune sitting in my RSP that keeps on growing due to dividends but I am 67 years old with a pretty low income . I am thinking that I be rotating these names and increasing my dividend income rather than increasing my RRIF liability in a few years ? I would really appreciate your advice - Thankyou for helping me have such "problems" .