Investment Q&A

Q: Hi again,
Sorry the symbol I was asking about is HEU. I've copied the question again below.

Hi 5i, I think over the next 3-5 years oil is going to rally up. In doing some reading I found this etf. The management fee is definitely higher than I like. I'm not exactly sure how the 200% correlation works but it sounds like if energy goes up it would be a good thing. Could you give your opinion on this fund, also could you give some better options for getting some more energy in my portfolio if you know of some. Thanks!

Q: This is an answer to Paul who had $500K US and wanted to exchange to CAD.

I think your example was great (It would be considered Norberts Gambit?) in the original Norberts Gambit I believe it's suggested to just buy a US Dollar tracking ETF?

That aside - I worked at CIBC as a Financial Service Rep for a while and when I had clients with large sums of US or CAD that needed to be converted I could call our traders and book the best rate possible for clients (I could haggle with them) - usually this would mean I could get as much (or more) as a whole percentage difference as the bank typically charges a two percent fee. I would recommend he calling Cal-Forex or some other trader, getting a quote on the BEST rate, then calling his bank and asking if they can match it (or beat it), or he will go to the other provider (bluff if you want) - the bank should comply...

just my 2 cents, the safest, easiest way would be to just have his bank exchange it - but personally I prefer your suggestion.

Q: I am not sure if this question should be asked in the forum or here.

I have a little more than $500,000 US in a Canadian bank US$ account that I would like to convert to Canadian dollars. What is the cheapest/easiest way to this? I know there are on line brokerages that do this but I am a little queasy about handling a transaction of this size through cyber space. Does one bank have a better reputation for foreign currency transactions than another or are they all priced the same?

Appreciate any advice you can provide.

Paul F.

Q: Hi Peter and Ryan,

I have a cash account at TD Waterhouse (TDW), and I use their Investment Savings Account (ISA) for the cash portion of my portfolio. Currently, the interest rate for that account is 0.75%, and it has been at that level for a long time. I also have an account at Meridian Credit Union. They have a High Interest Savings Account (HISA) for short term cash that pays double what the TDW ISA pays, and the interest rate they are offering on that account has been at that level or higher for a long time. My question is as follows: How risky would it be to park more than 100K in a Meridian HISA? In other words, how solid is Meridian as a financial institution?

Many thanks for the great service.

Q: Hello. Since I started investing, I've been told that selling covered call is the safest and easiest way to earn extra income. However, I've found that the cost of buying and selling covered call options in the Canadian stock market is extremely expensive. If the stock is called away, the bank will charge an extra $49 as handling fee per transaction for both sides (no matter the amount of the contract). Do you know if there are any investment institutions that offer no handling fee at the end of the expiry? I've heard that Interactive Broker may be one of them. Are you aware of any others? If I could switch some of my portfolio to a cheaper trading institution, do you think it is worth the hassle to sell covered call? MANY THANKS.

Q: What would your 3 favorite growth stocks be going forward (US or Canada) and 3 fav dividend stocks (US or Can)
Tks

Q: Morning,

Just a question regarding how you determine returns for the model portfolios. Is it based on time weight return (Modified Dietz method), or is it a money weighted return (XIRR).

I'm trying to figure out how to determine my returns on my own portfolios, and have been using XIRR since the beginning, which do you use or suggest for a DIY investor?

Thanks.

Q: Hi guys, I apologise for beating this topic to death but at what percentage of the float do investors start to worry when a stock is being shorted.

Thank you

Q: My partner and I are retiring soon on a portfolio of around a million dollars, comprised of more than 50 stocks. Compared to your Balanced model portfolio (22 stocks), the number of stocks I have in my portfolio seems to be too many. I have both large & mid cap stocks (85% of portfolio) and small cap growth stocks (15%) in the portfolio. The percentage I've allotted to each stock is not equal. Some of the smaller riskier stocks could be as low as 1% weighting in the total portfolio. My questions are (1) Is this a good investment strategy to include both balanced safer equity and higher growth riskier equity in a portfolio? (2) What should be the optimal number of stocks in a large portfolio? (3) Is there a general rule of thumb for the weighting of each stock category (large cap, mid cap & small cap)? I want to make sure that what I've done is correct, especially since we are retiring soon. THANK YOU IN ADVANCE.

Q: Hi Guys,

Am I still fine holding these companies in my U.S. portfolio, DIS, SBUX, V, HD, BRK.B and eft's SPY, QQQ, and VIG (All have a 3% weighting). 5 year time frame and low/medium risk.
My concern is that most of the individual stocks are in the Consumer sectors and I am overweighted in my total portfolio (25%) in these sectors.
thanks,
Jim

Q: Hi Guys, Am I correct in assuming that if the Fed raises the interest rate in June that the US bank stocks will go up,the US dollar up and gold/gold stocks down in conjunction with that move?
On a personal note when I renew I understand that my unused question credits will be carried forward. Correct? Thanks as always
Mike

Q: I just wanted to clarify about dividends. What happens when one sells stocks before dividends are distributed? Do we lose the dividends in this case? Are dividends prorated for the period stocks are held? Is there any suggested good practice for this? Do etfs differ from stocks in this regard? Thanks very much. Shyam

Q: The recent 5i Globe & Mail article referred to a method of transferring Cdn to US dollars by means of using Interlisted stocks. Where on your site can I find more information on this.

Q: I read with interest your recent article in the Post and was intrigued by the comment that research shows 90% of portfolio returns come from sector allocation - if a person wanted to take advantage of that, in a simple, easy to manage and inexpensive way (ignoring taxes for the moment) what would be your view be on an approach where one's equity component of their portfolio consisted entirely of a number of ETF's with each one of the ETF's focused on a particular sector, with a periodic (say quarterly) rebalancing? What specific ETF's would you suggest for such a portfolio? Thank you.

Q: In a question Oliver asked on May 18th you answered "In our Q&A we have a tab for 'Interesting Companies not yet followed' as well as 'growth companies'.

I'm sorry, but I cannot find the tab. Can you be more explicit as to how to get there.

Thanks

Sheldon

Q: If the u.s. fed raises interest rates,what impact might this have on AQN and Zwh? Thank you.

Q: In a recent reply you talk about Sunlife's better "growth profile". Obviously this is very important in determining which companies to consider. However, I am not sure how one best determines this. Would you have some guidelines on what to look for using SLF as an example?
Many thanks for your considered response.
Mike

Q: Without going to individual Co websites, how can I find out whether a Co's Dividends are paid by Mth. Qtr or Yr? Is there a List somewhere?

Thanks. Austin

Q: What is your opinion? I'm thinking of creating a "synthetic annuity" by investing some U.S. money in a U.S. covered call etf, namely SPXX. It provides a generous dividend (about 7%) and seems as secure as a regular annuity since it invests in the S&P 500 stocks. I know the share price may decline along with the market, and the dividend may fluctuate. Therefore the income isn't as fixed as a regular annuity. However, I also retain some principle and don't give it all to an insurance company. Generally speaking, what do you think of such a "synthetic annuity?"

Q: Hello Team,
Can you help clarify for me what seems to be a contradiction. Markets are supposed to have priced in the possibility of a US rate increase sometime this year. Yet, when the Fed minutes released today (May 18) indicate that may indeed be the case, markets react with volatility (i.e., gold down, oil down, US dollar up, financial stocks up, etc.).
My question is, if the market has priced in a rate increase, why is there so much volatility when there is the hint it might actually happen?
Thank you, Michael