Investment Q&A

Q: I am trying to understand how an ETF like XIU works. Does a shareholder actually own any stocks when they own this etf, or do they just own shares in a fund that tracks the TSX 60, but doesn't actually own the individual companies?

Q: Hi I was hoping you could clarify an answer you provided on January 7th about NVDA and trimming below 10%. In past, you have said “ let winners run.”

I’m torn with which approach to take as it seems contradicting. I do hold a very large position in NVDA (exceeding 10%) and need some clarity. Thanks so much.

Q: I am planning to deploy the $7000 in the TFSA sometime next week. The TFSA is growth focused and for a long term hold (5-10+ years).

These are the 3 names I am thinking of adding to:
CSU - today's price is $4400 ish
BN - today's price is $82 - $83 ish.
NVDA - today's price is $144 USD ish.

Due to CSU's high price tag, I can only add to 2 of the 3 names. Which 2 names would you add to, at today's prices?

Q: I have a question regarding bought deals.....is it wrong to think of them as setting a 'floor' on stock prices in the short term with the reason being that if some organisation bought a large multi-million position in the company at a discounted price (usually vs the current market price) that it would mean that they value the company at least the purchase price of the stock but would most likely believe it has room to grow.

Therefore, you could see this is a potential short-term ceiling on the price of the shares and that 'value' is seen by others at this price? I also realise it may take away some of the demand for the stock as the 'news' settles but I'm curious what I can learn from reading the 'bought deal' news announcements.

Am I missing anything and what 'insight' can you read into a bought deal?

Happy new year and thanks for your help as always!

Q: While reviewing the purchasing/selling by insiders I noted some transactions as derivative buy or sale by BCE. The type of securities were identified also as "equity swap-long position".
Can you please clarify what the terms "derivative buy" and "equity swap" mean ?
Thank you

Q: hi,
the TSX 10 years ago (jan 2014 ) was around 14,673. using the current price as I write ( 24,817 ) gives an annual rate of return based on these numbers is less than 3.5%! I assume that the dividends are not included in the numbers I provided ( from globe investor chart )? is this correct? do you have numbers for the average TSX dividend yield over the last 10 years? this compares with ( using same "method" as above with TSX ) with the S&P500 doing approximately 11.7% annual return over the last 10 years ( again, not sure if this includes the average dividend yield of the S&P500 in the numbers?). a snapshot in time of course, but illustrating the gross underperformance of the TSX in comparison the US markets ( nothing new here ). can you provide current valuation data/analyses for the TSX and S&P500 and comparisons to historic valuations please. Can you please include valuation methods of the "Fed-model" (and CDN equivalent), Ben Graham, Buffet, Schiller and other "big names" one might use please...
all the best
Chris

Q: Everyone, what are your investing red flags? Clayton

Q: hi,
do you have data for the average dividend yield for the TSX index for the last 5 and 10 years?
cheers, chris

Q: Looking to invest in Visa on NYSE at $383 but on Canadian site found Visa.ca at $30. What is Visa.ca, is it some play on Visa

Q: For Nizar - A cleaner listing of Peter's Financial Post articles:

https://financialpost.com/author/peterhodson/

Q: I am planning to write covered calls on some of my RRIF holdings in order to generate more cash to meet minimum withdrawal requirements. If this a good strategy? Can you offer me any guidance as to what percentage above the current market price that the strike price should be for a six month call option? If not six months, what option term would you recommend? It seems to me there must have been some studies done to determine the "sweet spot" for covered call option writing, but I would nevertheless welcome your advice.

Q: Everybody knows about tax loss selling late in the calendar year, but I am wondering about the significance of tax GAIN selling in early January. People waiting to sell a stock until the next year in order to delay paying taxes. How much of an impact does this have on stock prices early in the year? What type of stock is more vulnerable to tax gain selling? Obviously, stocks that have large gains, but there are lots of those, and many continue to do well early in January. Do you have any thoughts on which stocks on the TSX might be likely to see share price weakness in early January due to tax gain selling? Does this type of share price weakness typically reverse itself fairly quickly?

Q: Would like to increase my Google holdings, I have the problem in buying goog outright in a tfsa or buying cdr . I have never bought a cdr and ask would this be good idea or should I just buy the US Google . What are the pros and cons of cdr and what are the best way to buy cdr? I have goog in a cash account but my tfsa would require selling existing securities .
Doug

Q: How do you buy cdr for Google?

Q: Is the recent deal by BCE in the USA "written in stone" or can it be cancelled by either party at this time. Looks like the deal has almost destroyed the co. Thanks

Q: A significant portion of my portfolio is allocated to SPY and QQQ. When i feel a need to hedge what are the pro's and con's of Shorting (using inverse etfs) as opposed to just selling the SPY and QQQ positions.
I'm not trying to sidestep a routine pullback (< 10%) it is more the corrections (10 to 20%) or Crash scenario's that i'm wanting to protect against.

Q: Apologies if I missed this elsewhere on the site, but I was wondering if you produce (or plan to produce) a report outlining tax loss buying opportunities, or alternatively if you'd be able to suggest a few names to look at/keep an eye on?

I'm currently sitting on ~25% cash and looking for growth or income names with a 3-5 year time horizon. I have a fairly balanced equity portfolio, so agnostic when it comes to sector or market cap. Thanks!

Q: What are the downsides of using a covered call strategy? Not the downsides of a covered call etf.

Thanks

Q: I’m have some non registered stock investments that have capital gains. I was looking to make a donation to a charity using these to offset a tax on gains, as opposed to simply donating cash from cash flow. Is there anything to stop me from simply donating my stocks and then simply buying them back again, essentially to erase my tax burden?

Q: Dear 5i
If a stock is considered to be say 30% above what an analyst considers to be its fair market value but at the same time has an estimated earnings growth rate for the next year of 30-40%, would you consider this stock to be investible ? Assume good fundamentals . I would liken this scenario to a stock having a high P/E ratio ie expensive but has strong earnings growth forecast . Is that how you would see it as well ?
Also are there any Canadian crypto exchanges that you would recommend or would you suggest staying with an American exchange ?
Thanks
Bill C