Q: Considering the Canadian $ vs US $ does it still makes sense to use CDN $ to buy US Equities. Looks to me like you would lose 15% right of the top.
Thank you as always for a great service.
Thank you as always for a great service.
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Investment Q&A
Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.
Q: Hello Peter & Co,
Judy asked on Nov 27 about withdrawals from a RRIF. I am 71 and I understand that in a RRIF any withdrawal from any type of security is considered as retirement income; it is treated as cash and therefore taxed as such. In a tax sheltered account, there is no such thing as capital gains or dividend tax credits; when an income is withdrawn the whole amount is taxed as cash income. The reason is that all contributions one has made to an RRSP (within the prescribed limits) were tax deductible. The taxes one has not paid then will have to be paid later but, in counterpart, all the gains made were free of taxes thus boosting the compounding effect.
Regards,
Tony
Judy asked on Nov 27 about withdrawals from a RRIF. I am 71 and I understand that in a RRIF any withdrawal from any type of security is considered as retirement income; it is treated as cash and therefore taxed as such. In a tax sheltered account, there is no such thing as capital gains or dividend tax credits; when an income is withdrawn the whole amount is taxed as cash income. The reason is that all contributions one has made to an RRSP (within the prescribed limits) were tax deductible. The taxes one has not paid then will have to be paid later but, in counterpart, all the gains made were free of taxes thus boosting the compounding effect.
Regards,
Tony
Q: Hello Peter and Staff;
Is there any downside to purchasing an ETF in December, in terms of distribution of units. I know in the past when I have held mutual funds, I have taken a hit early in the new year which pertained to a fund timing purchase in the last couple of months of the previous year. ?any similarity in operation of etfs and mutual funds in this regard?. Thank you very much
Is there any downside to purchasing an ETF in December, in terms of distribution of units. I know in the past when I have held mutual funds, I have taken a hit early in the new year which pertained to a fund timing purchase in the last couple of months of the previous year. ?any similarity in operation of etfs and mutual funds in this regard?. Thank you very much
Q: Regarding the question on RIF withdrawals,I try not to withdraw dividend stocks in kind - I leave them in my RIF and withdraw the dividend income in cash. If I withdraw dividend stocks in kind, the dividend gross up on top of the taxable amount of the withdrawal, cpp and oas, gets my taxable income too high (despite the dividend tax credit). So, for my required RIF withdrawal, I take the cash from dividends and top up the amount required with an in kind transfer of a non dividend stock such as GIL. I will pay capital gains in the future obviously. Do any of your members who have to make RIF withdrawals have any other ideas? It is a bit of a difficult transition to go from accumulating retirement funds, to then having to use them to fund retirement - something I should have been thinking about 10 years before retirement! My advice to anyone who has to live off their investments is to top up their TFSA's and to think about how to position your portfolio between RSP's and investment accounts well before retirement.
Q: Would you provide insights to a “Kitchen Sink Quarter” used to describe a company’s quarterly financials? One definition found on the web is: “To kitchen sink is to announce all of a company's bad financial news at one time. A company deliberately overloads a report or press conference to overwhelm the reader/listener.”
1) What other items can be included as “bad financial news” in addition to:
a) write downs (i.e.: closing parts of operations and/or higher than anticipated cost of merging companies),
b) bad loans/investments (i.e.: for financial institutions)
c) Restated financial statements (i.e.: due to accounting irregularities, income tax rulings)
d) Change in senior management
2) In your experience, is this a normal event which occurs to companies within all industries? Or more prevalent in specific industries (Eg: Banks during the 2008/2009 financial crisis) or trend with the market cycle?
3) Are there indications/trends when a company may report a “Kitchen Sink quarter” (E.g.: 4Q yearend)?
4) How do markets generally react to a “kitchen sink quarter” – i.e.: good news, wait and see or bad news? How would you view this type of quarter?
5) Would companies rated by 5i with grades B+ and higher, less likely to experience a “Kitchen sink quarter” due to its quality?
Thank you.
1) What other items can be included as “bad financial news” in addition to:
a) write downs (i.e.: closing parts of operations and/or higher than anticipated cost of merging companies),
b) bad loans/investments (i.e.: for financial institutions)
c) Restated financial statements (i.e.: due to accounting irregularities, income tax rulings)
d) Change in senior management
2) In your experience, is this a normal event which occurs to companies within all industries? Or more prevalent in specific industries (Eg: Banks during the 2008/2009 financial crisis) or trend with the market cycle?
3) Are there indications/trends when a company may report a “Kitchen Sink quarter” (E.g.: 4Q yearend)?
4) How do markets generally react to a “kitchen sink quarter” – i.e.: good news, wait and see or bad news? How would you view this type of quarter?
5) Would companies rated by 5i with grades B+ and higher, less likely to experience a “Kitchen sink quarter” due to its quality?
Thank you.
Q: In addition to your comment, I have a rule to follow very strictly my orders. At the open, it is open season for your trade if you do not want to control it. A good placement requires a little effort, also be aware that most "professional" traders enter the market around 10h30 to avoid the fog of your type of trade at the open... At the office you can use your phone to place a trade, better in my view.
Q: The ex dividend date is Nov 26.2014, the date of record is No 28. If I sold the stock on the 26th who gets the dividend.
Q: In response to Dennis Mcv comments on brokerage permissions.
I understand that brokers/bankers can only loan out your shares for short selling if they are in a margin account. So they tell us!!!
I think the only way to ensure that your shares are not short sold is if you hold in your hands the physical stock certificate. but who does that today. I have always believed that the practice of short selling is not a good thing and is destructive by its very nature.
I understand that brokers/bankers can only loan out your shares for short selling if they are in a margin account. So they tell us!!!
I think the only way to ensure that your shares are not short sold is if you hold in your hands the physical stock certificate. but who does that today. I have always believed that the practice of short selling is not a good thing and is destructive by its very nature.
Q: Hi, like most of your members, I have an on-line trading account. The problem that I encounter when I wish to buy shares is that I'm at work when the markets are open and I don't want to use my work computer to make trades. How do you suggest we place a Buy order once you've chosen an equity that you wish to purchase. You once wrote that we shouldn't place a "market" bid as that is like giving a blank cheque. Should I place a bid in before I leave for work and limit it to the previous day's closing price? Or what do you suggest?
Thank you for the education,
Thank you for the education,
Q: Hi Peter and team, On Nov 5th YRI and K hit multi-year lows. Just 20 days later they have gained/recovered 22% and 54% respectively from that multi-year lows. Would like to know the underlying reasons for this quick recovery. Thanks.
Q: My question concerns RIF withdrawals. Within my RIF portfolio, I have Canadian and U.S. equities, cash, corporate bonds - 2018. During the course of the year, I require about 75% of the minimum withdrawal to cover the expenses for the year. I generally withdraw the assets in-kind. I would like some advice as to what strategy I should use to determine what assets should be withdrawn.
Q: Hi Peter and team,
Could you please suggest several investments for a portion of a portfolio, in a non-registered account, where capital preservation and income (as frequently as yearly or more) are a priority?
It would be important to avoid the risk of losing capitol over a 5 year time frame. A distribution/interest/dividend/etc payment is also important for this investment.
With GIC rates being so low, I'm struggling with what to do.
Could you please recommend a few ideas which would yield more than a GIC while also minimizing risk and taking into account the tax implications of it being in a non-registered account.
Thank you very much for all of your helpful answers.
Could you please suggest several investments for a portion of a portfolio, in a non-registered account, where capital preservation and income (as frequently as yearly or more) are a priority?
It would be important to avoid the risk of losing capitol over a 5 year time frame. A distribution/interest/dividend/etc payment is also important for this investment.
With GIC rates being so low, I'm struggling with what to do.
Could you please recommend a few ideas which would yield more than a GIC while also minimizing risk and taking into account the tax implications of it being in a non-registered account.
Thank you very much for all of your helpful answers.
Q:
Hi Peter et al:
I owned 1000 vod at a cost of $25,459.95. for every 11 vod I received 6 new vod. I also received 263 verizon shares, and a cash payment of $4928.01. I know you are not in the tax advisory business, but perhaps wsome member comments are possible. BMO INVESTORLINE tells me they will issue a T5 showing the full cash payment as foreign income. They also mentioned an election under section 86.1 of the act to defer
some or all of the amount. When I checked section 86.1 deals with spinoffs. Comments Please.
Thanks,
BEN
Hi Peter et al:
I owned 1000 vod at a cost of $25,459.95. for every 11 vod I received 6 new vod. I also received 263 verizon shares, and a cash payment of $4928.01. I know you are not in the tax advisory business, but perhaps wsome member comments are possible. BMO INVESTORLINE tells me they will issue a T5 showing the full cash payment as foreign income. They also mentioned an election under section 86.1 of the act to defer
some or all of the amount. When I checked section 86.1 deals with spinoffs. Comments Please.
Thanks,
BEN
Q: I have noticed that when you suggest to members that tax loss selling might be a desired activity to lower taxes, you have used a 23% saving. Am I correct that this is because the Ontario maximum Tax on Capital Gains is 46% X 1/2? I live in Alberta, and I believe our similar rate is 39% X 1/2. Just clarifying.
Thanks for all you do for the members.
Thanks for all you do for the members.
Q: Much thanks to the post by 'Peter' re: Shorting America
By Walter Cruttenden.https://www.sec.gov/comments/4-627/4627-95.pdf
Short selling with it's manipulating ways has always been a sore topic with me .
I would advise every investor to confirm with their investing broker that they 'do not' want any shorting of equities held in your name without your permission.
Thank you D McV
By Walter Cruttenden.https://www.sec.gov/comments/4-627/4627-95.pdf
Short selling with it's manipulating ways has always been a sore topic with me .
I would advise every investor to confirm with their investing broker that they 'do not' want any shorting of equities held in your name without your permission.
Thank you D McV
Q: I must have missed it but how do you calculate your fee for your Portfolio Review service?
Thanks and I am very impressed by your (and my)portfolio performances.
Thanks and I am very impressed by your (and my)portfolio performances.
Q: Just wondering if I wanted a portfolio review is the fee that 5i charges tax deductible?
Thanks
Dolores
Thanks
Dolores
Q: Hello Peter & Co
Some of my holdings have a negative beta (globe investor); how does one explain that?
Thanks
Tony
Some of my holdings have a negative beta (globe investor); how does one explain that?
Thanks
Tony
Q: Thought this was an interesting article on the history of short selling. https://www.sec.gov/comments/4-627/4627-95.pdf
Q: Hello Peter & Co,
In the fall of 2008 (I was then 65) I converted my RRSP portfolio to cash with the intention of taking over the responsibility of managing the investments; the objective was to generate a 7% compound annual return with the assumption of a 3% annual inflation rate on the income for the next 25 years. My retirement would have been 60% from the RRSP (now RRIF) portfolio and 40% from fixed/guaranteed sources such as CPP, OAS and a very small private pension.
Since the portfolio's inception date of June 30, 2009 (I am now 71) I have managed to get a much higher compound annual return of 17% (all in equity at a low beta volatility of 0.4), which has allowed me to double the RRIF income (vs the original plan) and assuming a reversion to the original 7% compound return for the next 20 years.
As a consequence, the original income split of 60/40 will now be 70/30; in light of that, I a wondering if I should reduce the equity portion of the portfolio to arrive at 60/40.
Would it be wise to do so?
Thanks,
Tony
In the fall of 2008 (I was then 65) I converted my RRSP portfolio to cash with the intention of taking over the responsibility of managing the investments; the objective was to generate a 7% compound annual return with the assumption of a 3% annual inflation rate on the income for the next 25 years. My retirement would have been 60% from the RRSP (now RRIF) portfolio and 40% from fixed/guaranteed sources such as CPP, OAS and a very small private pension.
Since the portfolio's inception date of June 30, 2009 (I am now 71) I have managed to get a much higher compound annual return of 17% (all in equity at a low beta volatility of 0.4), which has allowed me to double the RRIF income (vs the original plan) and assuming a reversion to the original 7% compound return for the next 20 years.
As a consequence, the original income split of 60/40 will now be 70/30; in light of that, I a wondering if I should reduce the equity portion of the portfolio to arrive at 60/40.
Would it be wise to do so?
Thanks,
Tony