Investment Q&A

Q: Can you give any information about algorithm trading? I have heard that it makes up between 65-75% of all daily trading. It seems like BNN and others barely mention it. Do they think that it might scare investors to know how much control algos seem to have on the markets. Thanks for any enlightenment that you can give me as well as others

Q: One of your subscribers said this in a question answered today, "I own 500 shares of TOU. Because I bought them a couple years ago and trimmed as they rose, my dollar cost average on these shares is zero!!" Is dollar cost average different from book value and if it is not, how does it go to zero?

Q: Hi Peter and team, would appreciate your thoughts on what the TFSA should be used for and why, fixed income or capital gains. Thank you

Q: Over the next two years or so, at least to the end of the current situation, is it best to use new money to buy dividend stocks for total return rather than growth stocks or ETFs???........Tom

Q: if you have a drip on a US company . do they still deduct the non resident tax

Q: Hi Peter,
Reading your National Post article this week titled 'potential read flags to watch for when picking next stock', I was interested in the first item 'short interest'. You mention that one should always check the short positions of companies wanting to purchase. So tell us please, what is the easiest and most efficient way to identify the short positions of a Canadian company? Thanks for your good advice!

Q: I'm pondering dipping my toe into ETFs. The reason for this is that I got the feeling from another 5iR response that given the current stock market turbulence, it is better to buy diversification via an ETF rather than buy new US or Canadian stocks positions or top up existing equity positions. What say you, 5iR? Like did I "read" that response right???......Tom

Q: Retired, dividend-income investor. I harvested some ZRE related tax losses in my Cash account in October. I am now rebuilding a position in my wife's TFSA. I was planning on 3 tranches, every second month (using your suggested "spread out your investments over a 6 month period). I bought my first wave a week ago.

Now that Chairman Powell has made his recent remarks about the potential slowdown in the rate of interest rate increases, does this change your thoughts about the pace of investing new monies into the market? Would you endorse accelerating the injection of new $$$....specifically for ZRE?

Thanks...Steve

Q: Me, pondering buy CIBC CDRs to top up US positions as the Canadian dollar is about 0.74 rather higher at say .80 FX exchange. Then later, when the FX trade out of the CDRs and then invest in the require stocks. The CDRs will me held in TFSA and LIF and perhaps a few in trade account.....What are the pros and cons of this approach???

Also, on the CDRs web site, the NAV of each CDRs is shown. What are the elements or components included in calculated for the NAV?.....For example, is it the final price of the day for the stock adjust for FX at that time and then also the hedging fee?........Thanks for the assistance and learning too!!!..........Tom

Q: Peter and team, not sure how to word this but I’ll try. When one buys a bond at less than face value [say $92] when it comes it comes due at the $100 face value, correct? On my brokers website it has a yield for semi annual and annual returns. Let’s say that’s 5% and it comes due in 3 years. Does that 5% make up a combination of the eight dollar capital gain plus the interest paid while I own it. If not how is that 5% calculated. Feel free to pick an existing bond being sold at a discount in order to answer my question. Are there any specific bonds or bond sectors that stand out as investable? I assume I’m better off, if I want to buy a discount, to wait until the next BOC announcement regarding rates.
Thanks as always
Bryan

Q: I subscribe to Stockwatch, the globe and mail, Wall street Journal , Barrons and bloomberg.com yet I still seem to miss company news when it is not issued as a press release. eg analyst upgrade, story on the company not from those sources, etc.
Is there one site that offers all that information? I am assuming it would be a paid site.

Q: Can you supply a few suggestions of dividend stocks that may be good to purchase during tax loss selling? Canadian and US if possible.
A few growth stocks would be a good balance to this question as well! Thanks, James

Q: I read a couple of recent posts on how bad TD brokerage was and how good National Bank was. Greg ended his post with “TD sucks”. That gave me a great chuckle. I am a TD client and am quite satisfied with their service but this is not to defend TD.

I have started a thread in the Forum under Brokerages and Research Tools on National Bank on the pros and cons of using that brokerage. I am intrigued by their zero commissions but am a bit skeptical on their overall offerings and service levels. I hope Greg and some others will post on their experiences with National.

Anyway, I do have a question for 5i. If I moved one of my accounts to National, with zero commissions, how do they make money from me? I don’t trade on margin, so no margin interest there. I don’t sell stocks short. I don’t buy or sell options. So, why would they want my business, or maybe they won’t?

Thanks
Dave

Q: Perhaps a dumb question, but who exactly is buying the GOC 5 year bond with ytm of 3.15%?
5 yr GICs are 5+%
Inflation 6+%
5 yr investment corporates are 5+%
Prime lending rate 5.95% and virtually certain to go higher
I realize that the market is betting that rates will fall in the coming years (we’ll see), but these numbers still don’t square up with the GOC 5 yr bond price imo. Is it a liquidity thing?

Q: If my base case was for a soft landing in the US economy, a slowing of rate increases and calmness in bond markets, what three sectors in the US would you favour?

Q: In most of the offerings of Bank Structured Note offerings, this line appears..

The Bank may benefit from the difference between the amount it is obligated to pay under the Notes, net of related expenses, and the returns it may generate in hedging such obligations.

I believe this implies that any options,dollar hedges,derivatives ,futures, EFT'S or derivatives thereof,long and shorts positions of any of these...that the bank would most likely be the other side of any trades within these notes.

Question...It seems that the bank can and will dictate the outcome of these risky things thru related expenses.(.ie the bank deals the cards then plays the hand) ...is the deck not stacked against the retail investor of such so called investment instruments?

Q: I am wondering what your thoughts are on annuities for a retiree, assuming no need to leave wealth on passing. Also assuming two scenarios: (1) putting all one's money in annuities, and (2) a small portion to ensure not ending up homeless while investing the rest in high risk growth stocks. Okay let's add a third one, a well balanced portfolio all in equities a little light though on dividends, with a floor protection of annuities. Talking about a straight life annuity, nothing fancy. Thank you.

Q: Looking for an industrial stock to pair with WSP. CNR has lower volatility, but a higher p/e compared to TFII. I am older looking for total return close to 10%. Would welcome other suggestions. Thank you

Q: My question is about the safety of CDRs. Is there any added risk (I recognize they are relatively new) in buying a CDR vs just buying the relevant security. My example is that of United Health (UNH.US). It is listed in US, and also a CDR in Canada. I would prefer to buy CDR as I have more available CAD than USD.

Q: I have owned the big 6 banks forever and they're the building blocks of my portfolio, but for a friend initiating a position with one of them do you have a preference right now for best entry position? They're all rallying sharply in the last month. Thank you.