Investment Q&A

Q: When is is tax like loss selling generally finished? I’m looking to buy a stock that has declined for the better part of this year and has good prospects for next year.

Q: In response to "Cacey on October 25, 2021" TD Webbroker has added an excellent section dedicated to analysts where they are all rated on percentage of wins and their percentage return. TD has recently made improvement to Advance Dashboard to those of you who may have given up in despair.

Q: There's a TSLA.TO stock. Which shows Elon R. Musk as CEO. It's quite cheap compared to the US Stock. Are they the same? Is buying the Canadian version safe?

Q: Is there a Scorecard or Rating Agency, that tracks the long-term performance of different Rating Agencies and Analysts ?
On the extremes; "T" has a 50% + spread in target prices, maybe rightfully so.
The different Poles here, are two widely used Analysts. One of which is to be vastly proven wrong, pending they scramble to adjust.

Q: Can you please clarify for me the following:

In terms of dividends, there is an "ex-dividend date", and a "pay date".
If one owns shares as of the ex dividend date and sells before the pay date, does one collect the dividend anyway?

Appreciate your help.

Q: My 28yr old son is looking to build a diversified ETF portfolio with 100% equity exposure with a bent towards growth given his long investment horizon.  These will be spread across his TFSA, RRSP and Non-Registered accounts.  Since he will be contributing smaller amounts on a regular basis a zero commission platform such as Wealthsimple is appealing.  However, they charge 1.5% fee for all currency conversions making it only practical to hold Canadian traded ETF's.  As a result he is considering the following:

ZSP 40%
XIC 25%
TEC 20%
VIU 10%
VEE 5%

ZSP + XIC + VIU + VEE together create a mix of ETFs that are globally diversified and very similar to the structure of XEQT/VEQT.  Versus XEQT/VEQT This portfolio has a slightly lower weighted-average MER at 0.16% and also has 20% in TEC (in place of something like QQQ) which is more growth oriented. Here are how the sectors would be weighted with this portfolio:

Info 31%
Financial 15%
Cons Disc 11%
Industrial 9%
Healthcare 8%
Communica 7%
Cons Staples 5%
Energy 5%
Materials 4%
Utilities 2%
Real Estate 2%

These would be the top 10 holdings with this portfolio and these top 10 would account for 24% of holdings in this portfolio:

AAPL5.1% MSFT4.9% AMZN3.2% GOOGL1.8% FB1.7% GOOG1.7% TSLA1.5% SHOP1.4% RY1.2% NVDA1.2%

If this was you at 28, can you please comment on
- are the 5 ETFs he has chosen ones you would go with given his objectives, if not, what changes/substitutes would you make along with recommended % allocations?
- is his % allocation across the 5 appropriate or would you make changes? For example I thought there might be too much overlap between ZSP and TEC as they are both highly invested in AAPL, MSFT, AMZ and FB and he is looking at 60% going into these 2 ETF's. That may well be what you want at his age but  I wonder if he is better served by reducing ZSP to 25% -30% and TEC to 15% and add  the remaining 15-20% to CDZ or VGG (or something else?)
- given he will be making contributions to his TFSA, RRSP and Non-registered, which ETF would be best in which account and why? 

Thanks for all your help, 
Scott

Q: Hello 5i
I have been selling options on the US stocks that I own to make a little extra money. IMy question has to do with buying back the option. I think what I do is ok but I want to check with you in case I am missing something. If I decide to buy the option back before expiration date, if I have a feeling that the stock price has a good chance of continuing to rise.

I check to see how much I made with the premium and combine that with the difference now between the strike price and the current value of the stock.. For instance, Costco at a strike price of $460. The stock is now $477, for a difference of $17. Then I check how much it will cost for me to buy the option back. In many cases, I will get pretty close to the original premiums,, say in this case, $210 rather than $250. Then I can sell another option. The only downside that I can see is if the stock price should decline after buying back the options. I would only do this, of course, with stocks that I wanted to hold anyway. Any problems here?
thanks for you service

Q: Hello Peter,

I am learning how to build a position and would like to know how one should go about it.
In this case, I waited nearer to market close to buy AMD. As the price kept going up relentlessly, I decided to buy half a position.
I was aware that it was near the 52 week high and that it was going to report after 2 trading days. So the chances of the price retreating before that was not going to happen. Am I correct to assume that?
And now for buying more to complete my position. Should one do it immediately tomorrow, the next trading day or should one wait for the earnings report and buy once the trend is confirmed?
Thank you in advance.
Regards
Rajiv

Q: Hello. I would appreciate your opinion about the merits or otherwise of investing in CDRs as a way for Canadians to hold an interest in US stocks - particularly the high value tech stocks. Is there any particular risk in trading through the newish exchange offering these investment vehicles.

Q: A recent guest on BNN market call (Blackswan Dexterios) mentioned use index overlay to protect on the downside. Being in the sales game it is portrayed an the sprinkling of magic dust. Going under the hood they are obviously making the use of options.

What specific strategies involving options do you feel are useful for this type of strategy ? Buying or writing calls or puts or any strategies such as straddles etc. What are the pros and cons?

Thank you,

Paul

Q: Peter & 5i team. I remember asking a question about holding TOU around $8.00 I believe. Well guess what it came back and more than performed. XBC who knows the market . Also we cannot outguess the market and winners & losers have been around. 5i has provided good information over the years Thank you

Q: loss aversion-when the pain of a loss is greater than the satisfaction from a win.
many of your members suffer from it and its a retail investors greatest sin
using xbc and mrs as examples you seem to be encouraging your readers. to hold on even though you say they are on a short lease-WHY!
take the loss use it at tax time, so many great companies to buy-aritzia, gsy, lspd, nvei -i could go on and. on.
and why do you keep insisting you have to give a company 3-5 years-where did that come from.?

dave

Q: Good morning,

Some information for James I think. I have had a LIRA with BMO Investorline since 2011. I have a pretty much 50/50 split with Canadian stocks and US stocks. I do the conversion once and then the cash stays in that currency. If I sell a US stock I settle in US dollars, If I sell a cdn stock I settle in CAD dollars. The dividends all get collected in the appropriate currency as well. For example Starbucks pays me in US cash and Altagas pays me in CAD dollars.

Hopefully this helps

Jimmy

Q: Re James Qtrade USD LIRA issue, a while back I asked Qtrade the same thing about USD spousal RRSP and they said not available too. I asked why, they said there was not the customer demand for it. Perhaps as a smaller broker they just do what they feel they have to in order to keep most customers happy.

Q: Public Feature Request: Could you add a filter to focus on Favourites for a given ticker?

This would allow a quick view (and reminder) of the answers I find most useful for a given stock.

Cheers / Thanks!

Q: Hello Peter & Team,

As per Bob Dylan... "The times they are a changin"

I have some new money to deploy and I am a little confused right now regarding where I should put it and how much cash I should leave out!

With what's going on in China, supply chain issues combined with pent up demand and lots of cash on hand, increasing energy costs, and the shortage of labor, I think everyone can agree we are about to/are in and inflationary period which could last for a few years.

I don't think it's a bad thing. And I don't think the markets are going to be (long term) adversely effected. But I do think there are companies/sectors which will do better than others in an inflationary environment. As an example... financials should do well. Inevitable rate hikes plus their ability to pass along added costs to the customer makes sense for them to be able to continue generating good cash flow.

My questions
1. We have all done very well in tech thanks to your guidance. How do you see this sector performing over the coming 1 - 3 years? It would be a shame for the 5i family to see all the capital gains we've recently enjoyed be depleted.
2. Which sectors and specifically which companies do you think will do well in this environment moving forward?
3. With respect to the 5i portfolios which many of us follow closely, what plans/changes are you considering keeping in mind the increasing cost-of-business landscape?

Thanks for all you do.

gm

Q: For my kids RESP's I buy low cost TD index funds "e-series" to keep things simple. However I notice they added a disclaimer which didn't used to be there when buying this last time, it says "A short-term trading fee of up to 2%, payable to the fund, may apply to all units of TD Mutual Funds (except money market funds". What does this mean? Short term makes it sound like I get the money back? But if not, f they are adding 2% to the purchase of low cost index funds, those are no longer low cost. Thoughts?

Q: Hi Peter and Team, I am hoping you or perhaps other members can help me here.
I have a rather large pension entitlement which, upon my recent retirement, I can move to a LIRA. While attempting to open a LIRA account with Qtrade, I was told that its LIRA accounts are available only in Cdn dollar - but no USD - this despite the fact that its RRSP accounts are available in combined CAD and USD and despite the fact that a LIRA, as you know, is simply an RRSP with an overlay of pension-law restrictions which 'lock in' the funds. The Qtrade rep had no explanation for this, except "maybe it's a regulatory issue or CRA needs to approve". That makes no sense to me.
My concern is that a CAD-only account will either limit me to Canadian investments or I will constantly be paying currency conversion fees to Qtrade every time I want to buy or sell USD securities or receive USD dividends.
As best I recall, most brokers moved to providing combined CAD-USD accounts over a decade ago. Am I missing something that might be preventing Qtrade from providing the service I need or is it just a decade behind its competitors?
Thank you!

Q: Hello 5i,

Can you please explain to me the difference between the following selling techniques:

Stop market, stop limit, trailing stop market and trailing stop limit. I am a new investor and would appreciate some concrete examples. Also feel free to supplement your explanations with links to any good videos. I find this tricky...I hate being stuck holding a stock for years before it bounces back.

Q: I think Will Rogers advise was "Buy a stock and if it goes up sell it. If it doesn"t go up don't buy it."