Investment Q&A

Q: Hello, thank you for the p / e article. Reading it made me reflect to p / e ratio vs p / cf and p / free cf. I thought professional money managers don t look too much at p / e but use p / free cf to really assess the merit of a company. Can you please comment on that and clarify how it is calculated. My understanding is that cf is net income plus all accounting expenses which are not really paid such as amortization and free cash flow involves reducing the cf by deducting all capex necessary to maintain your asset base. Please add some subtlety to your explanation if you have time. Thanks.

Q: Could you explain when the funds are hedged and unhedged how they work with the movement of the dollar ?

Q: Hello:
What do you think the chances are that the Bank of Canada might lower its benchmark
intetest rate.
Thanks: Jerry

Q: 6:42 PM 2/9/2016
Hello Peter
Could you please comment on the Algonquin Power takeover of Empire Electric in Missouri. The deal looks very interesting to me. Algonquin are simultaneously offering 5.00% Convertible Debentures - Instalment Receipts. The Conversion price is $10.60 well below the closing price of the shares yesterday $11.54.
Could you answer these questions for me and comment on the Company and on the Debenture issue.

1. It seems very surprising to have the conversion price LESS than the market price. Why?
2. Would you prefer the Debentures or the Common shares for steady income.
3. Will the common shares trade down to the conversion price on open Feb 10th?
Many thanks.......... Paul K

Q: In regards to Mike's search for Canadian Dividend Aristocrats he may find this site helpful:
http://www.dividendgrowthinvestingandretirement.com/canadian-dividend-all-star-list/

Q: Looks like strong volume today relative to historical daily averages on the tsx. Anything to read from this either positive or negative?

Thanks

Robert

Q: I keep hearing the phrase "the market sell-off has been orderly". What does that mean?

Q: Further to "February 08, 2016 (asked by patricia)" earlier this morning. I have numerous CAD margin accounts at TD Waterhouse. This is to facilitate selling one stock and then quickly buying another stock without waiting for settlement date. I NEVER have a debit balance in my margin accounts. My understanding is that my stock positions are held in BULK SEG at the brokerage and treated as if the margin account was a Cash account. Can you comment on this. Is there still any danger during a banking crisis??

Q: You mentioned that we should keep our money below $100,000 at ANY bank to have the CDIC coverage. Is this just Canadian banks?
Does this apply to Waterhouse accounts?
Is it the total amount that is held in an institution or is it individual accounts that have to be under $100,000? What happens to the $$'s above $100,000? Thank you.

Q: Everyone talks about the headwind of demographics on growth. With the baby-boomers retiring, the workforce is shrinking and that compromises growth, resulting in lower expected returns from investing in the markets. Are you aware of any research that discusses when the growth in the workforce from the next generation will balance out the decline from the baby-boomer generation? Also, how much of a factor is immigration?

Great service, Thanks,

Q: Hi Peter!

What broad market and sector specific ETF's that are currency hedged would you recommend for the US market for a 2 year hold?

Ian

Q: Good morning Peter and Team,

I came across a website listing "Canadian Dividend Aristocrats"
http://www.topyields.nl/tsx-canadian-dividend-aristocrats/

Looking at the Payout Ratio column, I see that negative and over 100% payout ratios are shown in orange, and I was surprised to see BYD.UN with a payout ratio of -26. My understanding is that a negative payout ratio means that a company is losing money while still paying a dividend. Surely this isn't the case for Boyd - one of my stellar performers! Could you please clarify? Even ENB shows a payout ratio of -534 (!) which seems absurd. Is it possible that the data on this website should be taken with a grain of salt? Finally, could you please recommend a website that shows (hopefully) accurate payout ratios, if in fact the ones shown on this site are incorrect?

Thanks for your continuing advice, recommendations, and learning opportunities.

Q: Hello,
After reading your recent recommended link on bear markets in Canada by Raymond James, I have a question involving his recommendations at the end. I've been following your Balanced Portfolio as I find it suited to my risk tolerance. I was planning to just weather the storm with it, maybe purchasing more during this down time. However, is it recommended to also diversify into bonds and gold, as the article recommends?

A second question, in the same vein, is regarding porfolio management more broadly. What are (and where can I learn more about) particular asset combinations that historically have had higher returns in the long term for any particular risk tolerance?

Q: Hope everyone enjoyed the cruise and that it wasn't as choppy as markets!
My question is on Covered Calls in the CDN market and I wonder if you would have 5 stocks to suggest for this strategy. I note that using this strategy in the US market … AAPL, CSCO, DIS have way more activity and choices, but I like this idea for CDN stocks that I already own, per the suggestions from 5i.
Your thoughts please, and welcome back to reality.
Peter

Q: Good Morning All, I have a general question regarding banks, cash and the economy. I have noticed a lot of talk about negative interest rates, bank bail ins and a cashless society with limits on withdrawls. Do you see any of this as a realistic threat and if so, how does someone protect themselves?

Q: I have about 10% of my RRSP portfolio currently in cash earning 0.75%. I plan to invest it in a fixed income vehicle sometime in 2016. I noticed today that Rona is trading at $23.40 about 3% less than the takeover price. Would investing some of this money in Rona at its current price be a smart alternative to a fixed income vehicle?

Q: Capitulating :( (me) .... so expect the market to turn up very soon!

Nonetheless, I am now firmly in the "income camp" and have reviewed the 5i Income portfolio where I already hold all but ADW and IGM of your stocks but none of the ETFS (VCH, XHY, CVD,CPD, ZRE). With the exception of VCH they have all taken it on the chin in the last year - like so much else.

I am building a "sleep at night portfolio" and have set aside an appropriate cash reserve portion. The rest will stay in the market. With "sleep" well and make a few bucks top of mind, would you recommend any of the 4 ETF's or something else like ZWB, ZDV? Thanks for help with this project.

Q: Good morning Peter and team! My 21 daughter has $20,000 to invest in a TFSA for the first time. For someone of this age, with the potential to withdraw some money within a 1-2 year horizon, would you recommend ETFs or individual stocks (or both), and what would be your top 3-5 picks at this time? Thanks! Lois

Q: What do you think would be the impact on equity prices if the US and or Canada implemented a negative interest rate policy? Thank you.

Q: Good morning,

I do not understand how the bond market works and do not have any in my portfolio. In your income portfolio you have xhy. Is it necessary to have a fixed income stocks in a portfolio? Please explain me how the bond market works or do have sites in the internet that would explain it? Is the decrease in price in xhy all due to decrease of the Canadian dollar?

Thank you

Paul