Investment Q&A

Q: Re: Bank exchange fees when investing in U.S. securities, funds, ETF’s.

It is good to see 5I is involved in Financial Literacy Month. I think a valid contribution to your Members could be as follows:

I believe there is a (hopefully small) percentage of Canadian investors of U.S. traded securities that are purchasing and selling within their Cdn. dollar investment account. (As you know, even at par, buying a US security in a Cdn account will cost approx. 2% in bank exchange fees, and selling that security will cost another 2%).
I also believe that these self-directed investors are unaware that most banks will set up a USD investment account, registered or unregistered, for them at no charge allowing any trading and dividends to transact within that account avoiding the bank exchange fee on each transaction. Of course there will be that fee on the initial transfer of funds into that account, (but not if U.S. securities are transferred from the Cdn to the U.S. account).

I recall that Questrade was once advertising on BNN that they had an account to avoid these fees, but it really wasn’t an effective message.

Are you aware of any good method to purchase U.S. dollars at better rates than banks will offer?

Thank you!

Q: I have about 20% of my total portfolio in U.S. equities. Do you see that amount as reasonable or in lieu of stronger growth predicted in the US should I consider putting any new money into the US instead of Canada.
Would you have any favourite ways to play, for example much is being said about regional us banks, have things gone too far too fast to get in now. Your valuable opinion would be much appreciated.

Q: A request to Santa and his band of merry elves at 5i. On Sept 9, 2015 you answered a request by Eugene for a list of stocks trading below "tangible book value" (your phrase) but considered profitable. You did not recommend them. They were all trading on the Venture and many were/are illiquid. Nevertheless, they have performed tolerably well, and 3 of those stocks: BVO,EIL,CDN have done exceptionally well. The only stinker in the group was CFL picked by Eugene. So on my Christmas wish list is a request to 5i to do it again, only this time my only restriction is to keep it any Canadian exchange. I don't write in very often, so I would like to take this opportunity to wish everyone at 5i a very Merry Christmas...........Lionel

Q: Hello 5i Team,
The markets keep going up. When do you think tax loss selling will begin?
Thank you for your insights,
Pamela

Q: This is more of a portfolio management or investor psychology question. I am trying to determine when I should sell a stock. I am currently up 71% and have exited half my position already. The stock has continued to climb almost in a straight line since selling. I have crystalized exactly half my gains with the other half being unrealized. I don’t want to be a victim of just selling a stock because its up. I also don’t want to possibly give up the unrealized gains since its a smaller company. What's your thoughts?

Q: I took a flyer on both CGC & APH yesterday & immediately covered with stops on both to protect any downside. Today I was (on paper) up significantly on both, however the automatic market control system placed 3 separate Stop Trade Orders on CGC throughout the day & 2 separate stops on APH. Unfortunately, I lost on both. Perhaps it might be beneficial to advise members of the Catch 22 that can result.

Q: Hi Peter,

I'm just curious ... Who are your heroes are in the investment world that have shaped your investment philosphy? Are there any books or insights that describe your investment process?

5i, thanks for the great work that you do. You're doing a great service to Canadian investors.

Elliott

Q: Hi Peter /group I presently have around $300,000 cash (in a tradable business account)I do not want to take any /little risk with this hard earned $. What should I invest in with Capital preservation being the #1 focus. Thanks for your valued advise

Q: How will the offer work? Are shareholders to expect an offer, in writing, requesting that they tender their shares for $24.00 share?

Q: Could you outline the best strategy when the underlying stock for a covered call goes significantly higher or lower prior to the expiration of the call? Thanks!

Q: portfolio- with recent scenario (new us president) looks like people moving to more growth oriented names. as such what would be recommended sector allocation. thanks

Q: Given the "new" political landscape in the US, which sectors should do well ?

Q: Any opinion of the firm and their funds, Ewing Morris, in Toronto?

Q: Hi Guys,

My 82 year old parent's new financial advisor ( the other one just disappeared without notice) has propose the following for their TFSA:
Mr.; MER Allocation
Fidelity Global Monthly Income F .80% 20%
Fid Monthly Income F .70% 20%
Fiera Income Opportunities F .82% 20%
First Trust Senior Load ETF ? 10%
Northwest Healthcare Property 10%
Pro Real Estate Inv. Trust 10%
Healthcare Leader Inc Fund EFT ? 10%

Mrs.;
Dynamic Blue Chip Eq. Fund FE ? 30%
Dynamic Global Value Fund DSC ? 3%
Dynamic Stragic Yield Fund LL ? 21%
Fidelity Strategic Income Fund F .75% 26%
Cibc Cdn Equity Auto ? 6%
CI High Income FE ? 8%
CI High Income Dsc ? 6%

Both are low income and live off their dividends.

What I am looking for is a general answer; yes it looks OK or are they still paying way too much for fees (the advisor is charging 1% + to handle their investments).

thanks,

Jim

Q: Hi Peter
Can you comment on Binary Options? My friend put $10,000 with Magnum Binary options two weeks ago and has been told that she is now at $10,750. They recommend that she increase her investment to $50,000 and they will manage it to make her some money. She is dealing with a fellow out of Bulgaria and it sounds a little scammish to me. Any thoughts?
Guy R

Q: If I receive $10000.00 in dividend income, do I get an additional 18% contribution room in my RSP from this income?

Q: Re: Jason question
I would very highly recommand the site "Masters in busines" from Bloomberg and scrolll down to the interview of Aswath Damodaran by Barry Ritholtz, on Valuation, data and investing. I consider this interview the most unbiaised and educating I never had the chance to hear on the difficulties of valuing companies.
IN HOPE THIS IS USEFUL
Claude

Q: Hi guys,

I was looking at Free Cash Flow Yield as a metric to evaluate companies that I want to invest in. Do you find this metric useful? Also, what would be considered a good free cash flow yield? I've heard people look at companies with 10% free cash flow yield, but that seems like it would be hard to find. Some of the companies in my portfolio like Disney and Stella Jones seem to have closer to 5% free cash flow yield. I know Disney has been investing heavily in their parks, which has lowered their FCF yield in the short-term.

Thanks,
Jason

Q: Hi Peter,
These long bond etf (ZLC, XLB, ZFL) have done very well with YTD total return of 10.48, 10.35 and 8.91 respectively
Why have they done so well?
Is it too late to consider them for RRIF income investment going forward? If so, which one do you recommend, thanks

Q: Hello 5i Team,
Do Peter &/or Ryan make a point of meeting the management of the companies in your three portfolios?
Thanks
Dave