Investment Q&A

Q: This is in response to Paul, regarding use of online brokerages.

For the record, I use TD Waterhouse and am reasonably satisfied with it.

I am familiar with Scotia's itrade, as well as BMO Investorline, and if I were to do it all over again, I'd probably choose BMO. Its platform is very clean and is not cluttered with external data that is not relevant to the portfolio. At a glance, (and again, without the "clutter") you can see exactly where you stand, without having to chase reports all over the site. Tabs at the top of the page direct you exactly to your choice of analysis tools. Their analysis tools and education segments are top notch.

Its wide variety of tools can help you analyze your portfolio, from asset allocation to choosing new/emerging stocks, and markets. It has tons of information available at your fingertips! This is what I enjoyed most as a "newbie" investor a few years ago, and which helped me tremendously.

As I mentioned, I am with Waterhouse, and am reasonably satisfied with it, but its platform, I find, is not as user-friendly as is BMO. For a new investor, I would suggest that BMO might be the better choice. TD and Scotia are also good, but in my opinion, would be better for someone who is used to some amount of trading and is comfortable with the jargon and the process. These two platforms, again speaking personally, are more intimidating to the new user than BMO.

BMO has excellent service for newbies, but also provides great advanced tools which you don't necessarily get on other sites, for no charge.

TD's new Advanced platform is intriguing, but it will come with a fee, unless you are a more active trader.

Only my two cents worth, if it helps ...

Q: Scotia iTrade vs BMO Investorline. I have the latter and could not be happier, at $9.95 a trade, and with more information and advice than I could have ever imagined. Updates on our portfolio value by the minute as well as the value of stocks that I'm looking at seriously, detailed info on any stock, advice from all the prominent investment groups, banks, etc. I'm sure that the Scotia product is also very good, but do check them both out carefully.

Q: A very general question- to find info on companies I used to go to msn.money- then I sort of moved over to yahoo finance- what site would you recommend. I am looking for the basics a price chart that goes back 5yrs minimum, the financial statements, maybe earning history-same a min of 5yrs...

Q: Hi Peter,
I am wondering if you have thought about giving a seminar/workshop on investing ? With defined benefit pensions going the way of the dodo it would seem prudent for individuals to take charge of at least part of their portfolio. I am particularly interested in finding something that would help put my two adult children on the right road.
Mike

Q: Comment on comparison of discount brokers.

I moderate a forum on high yield Canadian stocks and have done so for 11 years. This question has frequently come up over that time period and I have noticed some similar conclusions coming up over that time period.
1) Every brokerage will have its die hard fans who swear by one institution--those institutions are never the same.
2) the most general conclusion is that all the brokerages have problems and strong points but all certainly have their problems--seems more luck than picking the "right" one
3) Only trend over the years is that TD has been dominant but the number of complaints against it are also increasing.
4)for the record I have no connection to a brokerage (retired) and use Investorline personally.
Bryon in Elmira

Q: This is my response to Paul's question regarding self trading with a broker. I have used TDW for over 10 years am very satisfied with the performance of their system. I have recently started using their new Advanced Dashboard program and find it to be very complete and happy to be using it.
Good luck Paul in your decission.
Terry

Q: For Paul who asked about trading platforms. I used to be with TD, then moved to Nesbitt Burns and now with HSBC Invest Direct. Use HSBC for 99% my banking and like the world wide representation it provides. Check it out.
Ronald

Q: Peter
I own DHX and have owned it since $2.62.Now it is overweight in my portfolio.Traditional thinking is that I should be selling some and rebalancing.What is wrong with putting a stop loss(lets say 15%) behind the stock and let it run!I spend a lot of time trying to find such an investment and I submit I took more risk at $2.62 cents than I am today.

Q: hello 5i members:
I'd like an opinion on those familiar with using Scotia iTrade for a self-directed investment broker. If comparisons can be made with other experiences ie. BMO Investorline, or TD etc, then that would be helpful.

Q: I would like to clarify my understanding of convertible debentures. AFN.DB, for instance, matures Dec 31 2014 and pays 7% interest. It is callable Dec 31 2013 by the company. I understand that its conversion rate was set at 22.23. Assuming that AgGrowth does not call the debenture and that I was to purchase it in early January, I believe I could expect two interest payments in 2013 and then 22.23 shares if the shares have reached their target price of $44.98 or higher by the end of 2014. Presently, the debenture is priced at about $40. If the shares do not gain further value in 2014, do I get $1000 in cash at the end of 2014 when the debenture matures or does the company change the conversion ratio in order to return the value in shares? Is there a negative impact; i.e., a significant dilution, on the stock price when the company suddenly releases all those shares to pay back the debentures? What is meant by the premium on the debenture? Is it the difference between the present value of the debenture and the value at the conversion rate? I thank you for your information and look forward to your reply.

Q: Hello Peter
Olympia Financial Group just declared a $10 per share special dividend. So now we have to work out what will happen to the stock price right away, and also after the dividend is paid. Does the share price rise now in the expectation of the dividend? Does it stay at the present price after the dividend is paid or does it drop $10 after the dividend? The company may be "dividending" out the profits to the large insider shareholders [and the rest of us]in preparation maybe for selling the company to another bank who might just bid a higher than current price to get it. What current strategy would you advise?
Thank you for the excellent advice. Paul

Q: I would appreciate your input regarding which 3-4 companies in your Model Portfolio represent the best value currently. A brief explanation for your selection would be helpful . Thanks.

Q: new year, new model portfolio?

Q: Further to the earlier question today on DHX Media, I'm curious why it ran up so much on the news. Seems counter intuitive to me. Thanks.

Q: HI 5i,

Now that tapering appears imminent, how badly do you think dividend stocks in my portfolio, like Telus, IPL, Suncor and PBH will be affected?

I sent you this question a couple days ago but haven't heard from you. (Perhaps i sent it to the wrong address?)

Thanks G

Q: In a recent answer you mentioned the concept buying SLF as interest rate protection, Could you please elaborate. I assume you mean the insurers will do well when interest rates go up despite their recent run. Can you clarify why. Do you think the same would be true for the banks? I hold lots of bank stocks and this would please me very much. I hold few insurers an asking should consider holding my nose and buying more.
Thanks, Manfred

Q: I believe I have read that it is unwise to purchase mutual funds in december because they allocate certain amounts that accumulate over the year therefore you could be in for a capitol gain or other tax liability that you did note participate in. I have two funds left to liquidate as a result of moving all my accounts to a discount broker and reallocating resources to individual stocks and ETFs.
Is there any advantage to selling these two funds now to avoid this year end fund activity? I would be doing so early in the new year anyway.

Thank you so much for an educational and profitable year. All the best for the Season and 2014 to the 5i team and members.

Q: A really general question but could you provide a prognostication/guess on the January markets in general. Do you foresee a major shift to the downside and should investors be more defensive than usual.
About 80% of my names are good dividend payers....but I have a few that would suffer when the tide goes out.

Q: Please inform me on the difference between Alimentation Couche Tard stock ATD.A-T and Alimentation Couche Tard stock ATD.B-T

Thank you:
Duane Campbell

Q: Merry Christmas to one and all!

With TFSA season fast approaching, I was wondering if you had any thoughts about how to proceed with buying stocks with this in mind: being fully invested I have little free cash on hand in each of our TFSA accounts. Cash grows, albeit slowly, with left over DRIP money. So, $5500 would seem to limit us to stocks trading at, say, $55.00 per share or less. Stocks I might like to acquire (BAD, VET, BNS, etc., etc.)exceed my ability to buy in what I presume is a board lot, i.e. 100 shares. So, would you prefer buying lower-priced stocks in multiples of 100 or buying a higher-priced, but arguably "better" stock at less than 100 shares? The thesis is "Buy and hold" for distribution/dividend income which first and foremost would be "Dripped". I rarely sell unless there is compelling news that warrants a trade or re-balancing/diversification come into play.
Thanks,
Mike