Investment Q&A

Q: Ok, I know you do not really like trades, but what do you think about picking up some shares of Air Transat now and holding them until May/June and taking advantage of the winter busy season. It has worked in the past, a few times really well, others not as well but always made money. This is pretty speculative, and would be for the mad money part of my investments.
Thanks for your opinion.

Q: Hello, with regards to your answer below what does "close membership in Canada" mean? You may have answered this elsewhere, but I haven't seen it are you going to limit the number of subscriptions? If so at how many memberships and are you close to doing so? Thank you.

5i Research Answer:
Thank you. We know there is a lot of demand for US coverage, but we would not change our no-conflict stance in order to achieve that. Lots of things are under consideration, but we certainly do not want to give the impression we will follow US companies any time soon. When we close Membership in Canada we will likely look at this more closely.

- See more at: http://www.5iresearch.ca/questions?st=1&page=2#sthash.wcFjrPnz.dpuf

Q: Do you know of any tool or website that helps determine whether a company is a Passive Foreign Investment Company (PFIC) under the U.S. tax code? In particular I am wondering about Brookfield Asset Management (BAM.A). I have emailed their investor relations department, but have not yet gotten a response.

Q: Peter,

With the new credit system for questions, where can I find out how many I have left to use?

Thanks
John

Q: Hi team
When you say you would be comfortable with a 15 to 20 percent weighing in energy in a portfolio is that a percentage of total portfolio? For example with $700,000 portfolio $100,000 allocated to oil and gas stocks is adequately diversifying the portfolio with the rest in all different sectors. Thanks.

Q: Following up on your comment to Gord today: "It is very unlikely that 5i will report on US stocks. One problem is simply finding staff with experience in the US markets that are willing to commit to no trading", would you be open to the idea of creating a US stock research section where the analysts allowed to hold U.S. securities but must fully disclose them?
I'm pretty sure most 5i Research members are astute enough to discern the difference between objective commentary and biased, self-serving opinion. Moreover, you could institute very strict guidelines for making stock recommendations that would address possible biases.
I have made a lot of effort in the past few years to diversify worldwide (U.S. 40%, Europe 20%) but it's awfully hard to find good, objective information on foreign companies.
Robert

Q: Peter,

As a follow up to Stephan's question on Oct 19, BMO's report on REITS shows only 8 of 34 Reits have return of capital of less than 50%. 16 of the 34 have a return of capital of more than 70%. As a general rule, would this not indicate that REITs are better invested outside of the RRSP.

Regards
John

Q: How do you feel about buying call options in good blue chip dividend paying companies over a longer term? As I understand that options still payout dividends while holding the contract. I have noticed that some contracts have dropped 40-50% while the underlying stock has dropped only 20-30%. This would present a good case for substantial rise and possibly exercising the option down the road. Your thoughts.

Q: Hi 5i Team. Perhaps one thing to remember in these times is that, if you are lucky enough to hold cash and is waiting to get in, you could do it in steps. Take for example, Whitecap. It got to over $18 before the drop. When it got down to 13.95, I went in with half a position. It bounced up violently the following day (2 days later? whatever), I went in with the other half at 14.90. Of course, there could still be another drop in oil prices. For the long run though, we are addicted to the stuff. So it is a hold. I am able to stay calm during all this turmoil because I was unlucky enough to have been invested through Black Monday. 20% drop in one day! This one we are experiencing is a picnic. You don't need to remind me that anniversary will be in a couple of days. Cheers. Henry

Q: Not a question Peter, but another word of thanks to you and your team. My wife and I enjoyed your presentation at the money show on Thurs. We especially were pleased to meet you and Ryan in person and have a few words with you.
Again many thanks for all the help you have given us and many others. Hal

Q: hello, for fixed income portion of portfolio do you consider bonds as a better bet or stable low beta low risk utility/toll collector type stocks - ie BEP.UN, BCE etc. if bonds then which you recommend in current environment - XHY or cbo or chb or cab. if other category, then which ones you rec. thanks.

Q: Please inlighten me on how the Reit distributions are taxed ( Interest or Dividends)...? Basically my question is, would it be more prudent to hold certain Reits in a Registared or Non-Registared acct?

Thanks

Q: Hi 5i team. How should one interpret bid size and ask size when looking at a stock trading on any exchange? For example at one point today there was a bid size of about 143000 and an ask size of about 4000 on a stock I was watching. They seem to change constantly. Does this have to do with computer trading? Thanks for the info. Joe

Q: Thankyou for reassuring all of us in these troubled waters. I have quite a bit of cash to introduce back into markets. Is the 3 days of positive market action a good indicator this down turn may be over? I know you don't have a crystal ball but how do we deploy a substantial amount of dollars back in to the prescribed portfolios?

Q: I have a position in Ithaca that I intend to hold until they start production from the GSA deposit. That hopefully will be mid 2015. If that happens they are supposed to more than double their production to about 26000boe. They have about 50% of current production hedged at $102 until mid 2016. They claim to be on schedule and appear to be well financed. My question is about todays trading. For much of the day the stock was even or up a few cents. In the last hour or so one broker seemed to sell off a position and most of the trades had a symbol beside them and if you checked the expression MOC Trade appeared. I have never seen that before and wondered if you knew what it means. Thanks for any help. Joe

Q: Volume in Enterprise Group has been up last few trading days with 1 million plus shares trading. Given the current market conditions is this a positive or negative or should should I just not pay any attention to volume.
Thanks John

Q: Hello Peter,
What is your opinion today about the strength of the US economy? Do you still think the downturn will be over in a few weeks?
Thank you for your honesty, your integrity and your support.

Q: Inflation or deflation. I read in the book (Fear Greed and the end of the rainbow) a few years ago that if we get in a deflationary environment the last place you want to be is in the stock market. I am getting concerned that deflation is taking over. As the world ever been in a deflationary scenario? Your wisdom please. Thanks.

Q: I am overweighted in the Canadian energy sector and have been caught in the current downtrend. Should I sell some stocks;
BTE,CPG,ENB,VET,WCP and re purchase them at a later date if you think this correction could last several months longer.
Is it better to take a 10-18 % loss now and re-buy the same stocks at a cheaper price. I should have been more diversified!
Thanks for your help.

Q: Good day
My daughter(45 years old and married with 2 young children) has recently received an unexpected gift equating to about 1/3 of her current investments in mutual funds.She plans to invest these new funds in equities/fixed income in a registered plan. Considering the current market situation, what would you suggest for a balanced investment at this time or should she wait for some stability to return to the market?