Investment Q&A

Q: Hi 5i Team. I am just saying thanks for your advice over the years. Diversification in point. I once subscribed to an online investment advice site by G.P. called IWB. It has some very good portfolios, but I think one good lesson on diversification will be in one IWB portfolio i.e., the Growth Portfolio where it often boasts of huge double digit returns since inception but never on an annual basis. Its Growth portfolio has 8 stocks with about 51% Tech and 38% in just two i.e., SHOP (23.5%) and ARKK (14.5%) as of Feb 2021. Yikes. I stopped keeping track about 6-months ago but an update is due this month (maybe in the G&M). It will be interesting to see if diversification is mentioned in the next update. In fairness, the IWB does warn of the risk of investing in the growth portfolio, but it seems your growth portfolio is much more diversified and reporting annual performance is very helpful. Thanks again. Please publish if you think useful.

Q: Thoughts abut John De Goey's 'Next drop in the stock market will be a doozy' article today and its underlying premises?

My thanks.

Q: What do you suggest using as a benchmark for sector allocations? I have been looking at global market sector exposures using the iShares MSCI World ETF (XWD). I also saw the Vanguard Total World Stock ETF (VT), which I believe has more small-cap exposure than MSCI World. If the global market is a good base to use, do you see any reason to deviate from these exposures at the moment?

I assume I shouldn't look at regional exposures the same way, the global market is heavily weighted toward US (60-70%). Would regional exposure for something like VGRO (equity only - US 43% / Canada 30% / International Developed 20% / Emerging 7%) be a good benchmark?

Q: I would like a little help with my stock portfolio construction. I'm looking for guidelines for how much I should be putting into each of the 11 sectors such as banking, telecom, utilities, industrial, technology etc. including REITs. Can you give me approximations for the percentages that go into each sector for a moderate equity portfolio. Please include approximations for the aggressive and conservative portfolio too.

Q: If you work for a company and you have restrictions on when you can buy and sell a stock. There are only certain times a year you are allowed to buy and sell. For example lets assume any one of those in the top ten holdings of HHL.

My question is can you buy and sell HHL during those restricted periods?

Thanks Jimmy

Q: how can i tell how many credits i have left? Do they roll over or is it use em or lose em

Q: Which of the 5i portfolio companies have had the highest level of insider buying recently?
Thanks

Q: I've held a DRIP (in BNS) for about twenty years. It used to be run by the company itself but now is run by Computershare. I liked it in the days when discount brokers could do dividend reinvestments, but that advantage is gone (except for the fractional shares). Also it used to offer a 10% discount on reinvested dividends but no longer does. I am wondering if it is worth keeping the shares in this account, with the main benefits gone and the drawbacks of only being able to buy/sell at month's end still in place, or if I should have them transfered to my unregistered discount brokerage (assuming I can do an in-kind transfer). What do you think?

Q: Not a question. Just came across this article which really puts things into perspective. https://www.etf.com/sections/index-investor-corner/market-headlines-can-be-hazardous-your-wealth?utm_source=newsletter&utm_medium=email&utm_campaign=weeklynewsletter

Q: I would like more USD for travelling to the US. I hold all of the above stocks at Questrade, in both registered and unregistered accts. I asked Questrade to please pay the dividend directly in USD (as paid by the companies), but they said "We would have to journal your positions over to the USD equivalent in order to receive the dividends in USD." Should I journal over the CAN shares to the US equivalent; eg AQN.TO to AQN.US? It would involve a very large amount of money, could I expect a better USD exchange rate with greater volume or would they simply use the day's spot rate?

Q: Good morning 5i
In a response concerning selling call options awhile ago you said that you try to avoid stocks with dividends. I can understand how it adds another layer of difficulty, i am wondering if one checks that the ex-dividend date doesn’t fall sometime before the expirary date of the option, that you would likely be ok. For instance, i have call options on jpmorgan expiring on Feb 18. But i checked that the ex- dividend date doesn’t fall beforehand. It is Ex-Div Date
2022-01-05. Should most of the danger be avoided in such a scenario?

Q: I have to start withdrawal from my RRIF this year. Besides TFSA, I would need some strategies to minimize taxes and OAS clawback. I didn’t find anything in the Forums, and no way to search in the Blog (sorry..). Do you know of any book or good web site for canadians? I’m looking for Tax-efficient ETFs (Horizons, others?..), mutual Funds (Are the Class Series still available?). Anything I could use in a non-registered account. I will aim at capital gains, dividends and interest revenues in that order for individual stocks. PS: I’m a subscriber of « Money Saver » (Possible source of info).
Thanks as usual

Q: Is there software that a retail investor can use to manage his retirement plan. I use an excel spreadsheet to track bonds, GICs, Dividends, et cetera, but the spreadsheet is not too handy.

Q: Did I miss an announcement? Are you still going to be compiling the Summary Report?

Q: What resource(s) would you recommend for beginners to learn about stock options, from the ground up? Is there a way to practice strategies and analyze results without using real money?

Q: With the recent down turn in Google I would like to buy now and hopefully benefit from a price increase when the stocks splits 20 for 1 in July. I have 3,000 US, so I can buy one Google share OR 120 Google CDRs. What would i5R recommend, buy 1 US share OR 120 Google CDRs with CDN funds. Thanks … Cal

Q: In reply to Gordon who asked about a good stock screener that includes US stocks, I use StockRover and pay for the Premium Plus (mid-tier) package for 27.99 USD per month. Different subscription packages are able to access different metrics to screen with and I believe they offer a free trial so you can check it out.

A sample screener I created selects for companies that have grown sales and EPS at 10%+ for 1, 5 and 10 years, have a 1, 2 and 3 year return of 10, 20 and 100% respectively and an ROE of 10+. A total of 44 companies were returned from a NA universe of 15430. Included in the returns of this screener were GoEasy, Apple, NVIDIA - names that should be familiar to us all...I think its pretty powerful and have been very happy with my subscription.

Q: Hi. I have several stocks in my RIFF and TFSA which pay dividends in American dollars although I have purchased them in Canadian dollars. (eg, BAM.A; Open Text etc.) The dividend payout is then converted to Canadian dollars. I like to use the DRIP feature when possible. In order to do so with funds that pay out in USD, I would have to move the securities to my USD. Is this a good idea or are there disadvantages to do so? The securities are long term holds in my portfolio. Thanks for your help.

Q: Further to the comments about the annoying super long questions: 5i, please consider using the Twitter format and limit the number of characters we can use in our questions. This will force us members to keep it sweet and short. 280 is plenty. Thanks

Q: Peter,

The G & M normally lists the individual stocks that make up the various indexes of the TSX. They have changed the format of the paper and on Saturday's edition they have removed this information. Where could I find it?

I am looking for the actual stocks in the index, not the makeup of any ETF.

Thank you

Paul