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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: Could you please remind me what size market cap refers to small, mid and large cap companies? Are the numbers different between Canada and U.S.?
Thank you
Read Answer Asked by J on January 12, 2024
Q: Seems to me finding stocks to create personal wealth over the long term is not that hard if a bit of effort is put into it, could be said all you need is common sense perhaps. Also seems to me the most common mistake for small diy'ers would be portfolio management, the buying and selling mostly, tax planning perhaps to a much lesser degree. 5i has provided many many good ideas as a long term member over the years, a few loosers too - dont want your head to swell too much. 5i deserves much credit to my success, thank you very much. Your investing ideas have provided several opportunities, I feel it's the portfolio managment skills you've taught me that was more important to create wealth. All that being said, could you expand on this remark you posted today, "we tend to leave some (minor) room to add if opportunities present themselves in the future" ?
Read Answer Asked by Charles on January 09, 2024
Q: Under Investment Q & A, as an example, Target price history - PYPL, current high target price $118.00, the deviation (line with dots) recent 13.9 -- can you explain what this indicates.

I am a long term member and I am noticing the below more than in the past:

A lot of questions have "take as many credits as needed". For instance, the longer the question the more credits are required or the more research done the more credits required, or the more companies asked about the more credits required? Please advise.

Thank you
Appreciate the years of good service.

Read Answer Asked by Dennis on January 09, 2024
Q: Peter; Re Lin’s question on his sons FHSA at TD- my granddaughter also has her FHSA at TD - I advised her to buy an ETF instead of the TD MF - but TD wont allow it- or individual stocks, Very restrictive - and ANTI TRADE ! Haha.
Rod
Read Answer Asked by Rodney on January 08, 2024
Q: Fellow 5i members: i'm interested in reading about your best allocation of capital (other than stock purchases) which has created value in your life beyond your investment account. After all, bettering our life quality is why we began investing in the first place. I've just created a thread under Forums..Non-investment topics. I titled it 'Best Spending ideas 2024'. I believe that our large community of prosperous and like-minded people has alot of good ideas to share. I've shared a few of my best allocations of capital in the thread. I invite you to spend a few minutes sharing and lets get the conversation started so we can learn from one another.
Read Answer Asked by steve on January 08, 2024
Q: Dear Peter

1) is there a CDIC insurance limit of US$ 100K for US denominated accounts, or is it CAD$ 100K for US denominated accounts?
2) we have US$ and CAD$ denominated TFSAs with account numbers having the same first 6 alphanumerics and the last alphanumeric being different. For CDIC cover, would these US$ and CAD$ TSFA's count as one account or two accounts?
3) We bank at one of the largest banks in Canada and we have two investment accounts which are 5 times bigger than CDIC insurance cover. We wonder what other investors do in such situations -- do they open more investment accounts at other institutions in order to get the CDIC cover? Do they just stay with their current broker to keep their investment tracking simpler?

We'd appreciate your comments on: a) options and, b) what most investors try to do, if anything.

Happy New Year. Many thanks for your usual sound advice.
Hi again Peter - re my earlier questions about CDIC insurance, i have found out that usd is a covered currency, in fact the CDIC website says foreign currency which captures a lot. I've asked TD whether our non-registered USD and CAD accounts are insured separately for $100k each or are insured as 1 account - still waiting. And re the ability to better CDIC insurance with more accounts for our fixed income, i'm still interested to know of any innovative approaches you may have seen. Many thanks.
Read Answer Asked by TOM on January 08, 2024
Q: I previously asked you about the rule of 40 for SaaS companies here:
https://www.5iresearch.ca/questions/text/rule+of+40#answer163822. Could you explain further why this model doesn't seem to work for companies in other industries?

For example, ATD has a low single digit free cash flow margin and would not meet the rule of 40 threshold, but it has proven to be a consistently good investment over the years despite that fact. Why doesn't its poor profitability hold it back and what other criteria would you consider important in lieu of the rule of 40 that help you identify it as a good investment?
Read Answer Asked by Adam on January 03, 2024
Q: Hi
I know that this question is almost impossible to answer and it is anyone's guess but what is the end game for this mounting debt in the US? 34 trillion? Perhaps 10 trillion of that is domestic? Still a stagering number. GDP is 26.24 Trillion with that volume it sounds manageable but they and other goverments dither about, eventually kicking the can down the road. At what point does this come to a head in your opinion? Perhaps a year or an event that you see as an epoch?
Thank you
J
Read Answer Asked by Jeremy on January 03, 2024
Q: This is a general market question. I hold too many companies in my equity accounts and would like to reduce the number. On the other hand, my overall portfolio is up more than 11% over he past 3 months. I am overweight financials but I see them as benefitting from potential rate drop. Most of my holdings are growth oriented. I do hold approximately 15% fixed income, short and longer term bonds.

What would be your overall approach given potential rate drop and anticipated slow economic growth? 90% of my holdings are for long term. 10% are trades.

Take as many credits as required.

Thanks for all your help.

Mike
Read Answer Asked by Michael on January 02, 2024
Q: Good Morning 5i Team,

1. Is the capital gains tax the same on CDN and US stocks in a cash account?
2. Does one pay more tax selling US stocks with no dividends in an RSP or cash account?
3. Are the dividends from preferred shares eligible for a tax credit? Or does it depend on the offer?

Delete question credits as required.

Thank you and keep up the great work.
Read Answer Asked by David on January 02, 2024
Q: Hi Guys,

My question is revolving around an article or a webinar that you've done or planned to do on the 2024 outlook. Best categories, interest rate outlook etc etc.

If you've done such please send me the link. If you haven't do you plan to do something like this?

Sheldon
Read Answer Asked by Sheldon on January 02, 2024
Q: Happy New Year everyone!

Can you please update us on your outlook for US Small Caps in 2024? Is it better to invest in US or Canada? A few selected stocks or ETF? If ETF what’s best for top return?

Sorry for all the questions please take as many credits as necessary.

Thanks happy investing!
Read Answer Asked by Robert on January 01, 2024
Q: I am concerned about the US political situation. Should Trump manage to win the upcoming election and the US loses its democracy, I fear that this will not be good for the financial markets. Do you know what the results were in other countries that elected far right political parties? I have a sizable portfolio that is almost 50% weighted to the US. I would like to know how to prepare for this possibility short of selling all our US investments. Thank you
Read Answer Asked by Richard on December 27, 2023
Q: This is just a comment on Bob's question about the best and worst months in the stock market and I always remember this fun sarcastic quote from Mark Twain. Happy Holidays!

“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”
Read Answer Asked by Keith on December 23, 2023
Q: A few months back I asked a question about timing for a conversion of American dollars to Canadian dollars. My understanding at the time was the Canadian dollar would weaken over the coming months. As I’m in no hurry, you agreed waiting for a decline was a good strategy. I’m still okay waiting but was hoping you could provide an explanation as to why the US dollar has been weakening. I’m somewhat perplexed that our dollar would be showing strength given the difference in the two economies. Given the US is entering an election year and our federal government continues to demonstrate its fiscal incompetence with almost every announcement (sorry, couldn’t resist!), could you please also provide a ‘best guess’ for where the Canadian dollar might land 6 months from now.
Thanks, as always.
Read Answer Asked by Warren on December 22, 2023
Q: WHAT ARE best MONTHS worst MONTHS FOR stock MARKETS.

how does JANUARY rank /

thank YOU RAK.
Read Answer Asked by bob on December 22, 2023
Q: Please make it public at your discretion.

In response to Maureen's question about a tax calculator, I have used the one at Ernst & Young for years. It is very robust and includes interest income and all of the provinces and federal tax.

https://www.ey.com/en_ca/tax/tax-calculators

Paul F.
Read Answer Asked by Paul on December 21, 2023