Investment Q&A

Q: Hi gang,

With all the talk about ESG I was wondering if it could be added to your stock info page? I realize it may not factor high in your evaluation of a company, but a lot of fund managers are referencing in their answers to questions about stocks.

For example today's guest on Market Call used it in her response to a Q on ATD, stating that because they sell cigarettes in their convenience store, she would not invest in the company.

Thx again for all your great work!

Q: These Canadian banks and probably others seem to be strong proponents of ESG principles in running their companies. It seems clear that at least some aspects of ESG impacts profit negatively and therefor share price. A recent Financial Post column suggests the growth of this approach will erode the performance of companies and ultimately the Canadian economy. At the same time some investors see it as essential in choosing investments. Has 5i written about this trend and what weight do you place on it in making investment recommendations? Your opinion would be very helpful.

Q: We are 100% fully of the view that a great company is going to be a good investment, long term, despite whatever the market does.
Re your response above to Antonio.

Thank you, I have over the few years of reading your answers taken this idea to heart and am now much more comfortable with market or company moves.. I sleep well at night and have avoided some emotional market mistakes as a result.
So thank you again and good holiday to everyone.
Peter

Q: The takeover date is fast approaching and based on the current stock price, it doesn't look like the market is anticipating a higher offer in spite of minority shareholder opposition. Question -- Shares of GC are being held in a registered Employee Share Plan. In addition to receiving the proxy to vote for/against the deal, there is also a form included with the proxy to tender shares at the $39 price that is date sensitive. If shares are tended at the $39 price and then a higher price is later offered, will the shareholder that tendered the shares at $39 still receive the higher offer? The employee would prefer to vote against the $39 in anticipation of a higher offer but would not want to be in the position of being stuck with the shares by not tendering them on the form sent with the proxy. Than you.

Q: Your thoughts on:
1. Stock Rover versus any other of your suggestions for stock & portfolio tracking sites/businesses (that include tracking Canadian stocks (e.g. TSE) stocks)?
2. How secure is it to have these companies (e.g. stock rover) track our individual portfolios? They are gathering such personal financial information on us that i imagine other third parties would love to get their hands on- How much risk of our data ($ personal holdings/worth) being shared, or not so much?

Q: Hello 5i Team
I am calculating 3, 5, 10 and 20 year compound annual growth (CAG) rates for dividends for select companies.
The questions I have are:
1 – Are CAG rates calculated for the company fiscal years (i.e. the Canadian Banks fiscal year ends October 31) or the calendar year (December 31)?
2 – Are CAG rates calculated for the dividend declaration date, record date or payment date? For some companies the payment date is after their fiscal year ends (i.e. CNQ with a year end of December 31 and the fourth quarter payment date is January 01 of the following year).
3 – Do you know what Bloomberg/Eikon/TSX use in their calculations?
Thanks

Q: Hi 5i,

Do you know where you can find the "downside beta" and "upside beta" for TSX listed stocks?

Thanks
John

Q: From today's Wall street Journal:
Tesla’s 125-fold increase isn’t even the best gain since it listed. That honor, at least among the top 3,000 stocks in the U.S., goes to Xpel Inc., which makes film to protect car paintwork. It was a penny stock with a market value of a bit more than half a million dollars when Tesla came to market, and has since soared almost 170,000%, leaving Tesla in the dust.

I cringe when I read this. I bought 400,000 shares of this company at less than 15 cents in 2011. Just goes to show you, that it never hurts to hold on to some position. Alas I sold after making a 10 bagger.

Q: Can you recommend the best way to purchase a Canadian equity in-trust for a child that is not my dependent?

Q: Steve asked about donating shares to charity. Would this site be a good choice as well: https://www.canadahelps.org/en/donate/donate-securities/

Q: This is a comment to your answer to Kapil regarding deductiblity of interest. I alawys thought that as long as the money that is borrowed be used to generate income "irrespective of it is a line of credit or a mortgage" then interest on this money is tax deductible.

Q: Hi, the GICs of smaller banks through TD direct investing such as Equitable, Home Equity and PC Bank offer much better rates than the big 5 and insurco banks. I know they are CDIC insured up to $100k but would still like to invest knowing they are decent and relatively secure companies. Could you comment on or rank the 3 mentioned in this regard and any you would pass on, Thanks

Q: Hi 5i team,
I will use XBC as an example here. It is now approaching $1B market cap. You guys always seem to reference this as a magic threshold that can bring in bigger investors that either don’t like the small cap space or are not permitted there by their mandate. I am curious if this is a key threshold for just Canadian companies or is the threshold typically higher for U.S. companies, where the cap sizes are proportionately higher.
Thanks again for the insight.
Dave

Q: Hello Peter and the rest of the 5i Team. I have been investing on my own for about the last 5 years and have done ok primarily sticking to well managed, established companies. In the last year or so, I have added some more "growthy" names, which you guys have suggested and have worked out very nicely (thank-you). My concern now is trying to hang on to what I have made. I hear a lot about the market cycle and money rotating out of one sector into another. I am also picking up on future inflationary concerns and how now is a good time to start buying gold stocks. Also, interest rates are so low and really have nowhere to go but up. Government debt levels are mind-blowing? What does this all mean for the market? I know that having a balanced/diversified portfolio is important and it is difficult to time the market, but based on where we are in the cycle, is there historically a preferred sector that I should be moving some of my money into? Gold, resources, financials, real estate? Or is it time to take some profits and increase cash positions? With interest rates so low and eventually moving up, does it make sense to buy bond funds/ETFs? Can you please help me make sense of all this and suggest a few names to consider?
Hopefully my question makes sense. Thank-you.

Q: What is the process for selling an equity for a tax loss, but also giving the same stock to a charity to claim a tax deduction?

Q: Hi,
I am thinking to borrow money from HELOC or LOC and invest in non-registered accounts. ($50,000). This is 1-3 years plan. Can I right off LOC interest from my personal income tax? please suggest if this is a good strategy in this time of year ? Also what are best options to invest ? Thanks

Q: Not a Q but a comment. My biggest winner (not by $ which is SHOP - thanks for that!) is RPI.UN which I bought at 2009 bottom. A 1600 bagger!
Most of it came from dividends. I would never have guessed that possible.

Q: Hi Peter
My wife and I are fully invested in TFSA and RSP accounts. I have about $150,000 to invest. I guess I need to use taxable accounts, which I have no knowledge about.
Can you point me some good resources on taxable accounts and how to get started.
If I am already at the top of the tax bracket, is it worth consulting with a tax consultant before I go down this path?
Any guidance on approach and methodology will be very helpful.
Appreciate your great work!
Thanks

Q: enbridge came out with annual investors day presentation today and just wondering if you guys listened to it. they increased the dividend by only 3% but to me that was being cautious for outlook next year cause who knows what will happen but happy in their decision to raise a bit at least. just wanted your thoughts and as a sidenote i get a
newsletter from a reputable writer in ontario here and he was saying in one of his latest reports that 80% of all trading on the canadian markets [tsx] comes from south of the border now. i did not know that and is this right?
thanks

Q: Hello,

In the upcoming shareholder meeting, the following changes to the investment restrictions are proposed:

Current Investment Restriction:
[Each iShares Fund] shall store all the Bullion owned by the iShares Fund in: (i) with respect to CGL, the vault facilities of a Schedule I Canadian chartered bank or an approved subcustodian or sub-subcustodian or an affiliate or a division thereof on a segregated basis; and (ii) with respect to SVR, the vault facilities of a Schedule I Canadian chartered bank, or an affiliate or a division thereof, or a sub-custodian on an allocated basis.
[Each iShares Fund] shall ensure that the Custodian has adequate insurance in place in respect of the Bullion held by the Custodian on behalf of the Fund.

Proposed Investment Restriction:
[Each iShares Fund] shall store all of the Bullion owned by the iShares Fund in the vault facilities of one or more entities that meet the requirements to act as a custodian or sub-custodian for assets as described in NI 81-102 (or are permitted to act as a custodian or sub-custodian pursuant to exemptive relief from the applicable requirements granted by the Securities Authorities), on an allocated and segregated basis.
[Each iShares Fund] shall ensure that the Custodian itself has, or that the Custodian or sub-custodian(s) are required to ensure that their respective sub-custodian(s) have, adequate insurance arrangements in place in respect of the Bullion held on behalf of the Fund by such Custodian or sub-custodian(s), as applicable.

Would you be able to please explain in simple(-er) terms what's being proposed here?
Also, if the proposal is approved, how it would affect attractiveness of CGL going forward? I.e. would it be a good idea to continue to hold it?

Thank you kindly