Investment Q&A

Q: Quite a few subscribers mention that they want to increase their fixed income percentage in their portfolio. Yet they ask for your advice on bonds. In my experience, they are not the same. I think of fixed income as a GIC. Your thoughts?

Q: Peter;
Closed Funds (CEFs).
Intrigued by your recent articles on DIY investor’s advantages and becoming a fund manager again, I re-read a couple of my books on hedge funds by Seabastian Mallaby, Edward O. Thorp, and Simon Lack’s “The Hedge Fund Mirage: The illusion of big money and why it’s too good to be true”.
In the latter 2012 book Simon Lack argues large hedge funds and most institutions ignore closed funds which leaves good opportunities for small hedge funds and sophisticated investors of which there are very few in his opinion. In Lack’s opinion the CEF space is dominated by individual retail investors who chase yield that is mis-stated (CEFs publish a distribution yield rather than the actual yield so are engaging in ROC) and foolishly buy IPOs of CEFs. Lack says numerous articles and books have been written on this subject and how to evaluate CEFs but my research did not produce very much at all. Do you have any views and suggestions on how an individual could or should approach this opportunity if it still exists?
WRS.

Q: When the U.S. market is closed for the day is there any effect on the Canadian market as to volume or shorting of positions or anything? Also vice versa when the Canadian market is closed?

Q: Your answer to Costa about how to handle GoEasy (or any stock) after a double or triple is one of the reasons why I subscribe to 5i. Thanks for your clarity.

Q: Hi 5i,

I am new in the Canadian market and want to learn more the behavior of Canadian stocks. I found those Canadian stocks both traded in US and Canada behave very good price momentum. KXS is not listed company in US. However, I have found there is a KXSCF (OTC traded in USD), does it usually trade actively for such cases. I have a feeling that the reason it dropped due to the company is not listed in US market. Do you agree that we should invest for those companies traded in both US and Canada market, they will behave much better with more volume transactions and better price momentum. Many thanks and kindly advise.

Q: Effective Monday, Questrade will accept & approve trades starting at 7 AM. What are the benefits & risks of this? Thanks!

Get a headstart on your trading day. Starting Monday, January 18, pre-market trading will open half an hour earlier at 7 am ET.
Here is what this earlier start time means for you:
GTEM orders for U.S. trades can be placed or filled as early as 7 am ET
Day orders may be approved as early as 7 am ET on Canadian or U.S. routes, but will continue to be filled only on market open
Reminder: U.S. markets are closed on Monday, January 18 for Martin Luther King Jr. Day.

Q: Thanks for all your excellent work. Having recently moved to the US and opted to convert my young-ish Nova Scotia pension account to an RRSP and a LIRA, I’m looking to invest the ~100k in these accounts. Horizon: at least 5 years, but probably much more (I’m 40). Having narrowed down a tentative list of names (see below – tech-heavy, I realize), and with a focus on growth, I’m hoping to sort out the best buying strategy. Specifically: (1) At this moment, does the conventional wisdom to buy each stock gradually makes sense to you as good rule of thumb (e.g., over the course of a year, for each stock, adding a quarter of the total intended position once every few months or so)? (2) Also: I’d greatly appreciate seeing a ranked list of, say, which five of these stocks you think it would be especially wise to start with (i.e., buy now, or buy more of sooner) and which five you think I should wait to buy. Feel free to dock me for two questions! Thanks a ton, Chris

CSU, SHOP, LSPD, XBC, SYZ, BEP.UN, PHO, KXS, ENGH, WELL, GUD, EGT, SJ, BNS, WSP, STC, ATZ, LAC, BYD, REAL

Q: How does a Canadian investor become part of a new US issue. POSH IPO investors were able to garner over 100% return on the first day of trading but I'm not aware how to become part of a US IPO.

Thanks!
Adam

Q: I would like a definition of a few words that are in the Asset Allocation & Other Statistics section of your portfolios, namely:
Active, upside capture of 2.40 vs 1, Down Semi-Std Dev. of 1.14% vs .60%.
I read the basic definitions in Investopedia and would like to know the relation between the data.

Q: Markets are very high. Do you anticipate a crash like last year? And how should we position ourselves at this time? Thank You.

Q: Peter, I have finally got organized and opened us accounts for each family members' registered plans - rsp, tfsa, lira. With the current strength of CAD relative to USD, it seems like a good time to increase US equity exposure. I am using Norbert's gambit to transfer funds from CAD to USD accounts. I have a couple general questions:

- do you see this as a good time to increase us equity exposure both from a currency and market perspective?
- would it be best to concentrate us holdings in the rsp accounts to avoid/defer us withholding taxes (or does this matter)? I will be holding some equities (tech, biotech) and some index funds (e.g. ARK)
- on a related note, is there any disadvantage to holding ARK etfs over their Canadian counterparts offered by Emerge (apart from the latter's higher MERs)?

Thanks in advance and also thanks for your great service.

Best wishes,

David

Q: Re Nizar's question about using USD as a deposit for TFSA. I did this last year. NEVER again. I use TD WebBroker. I had called for help and told the cash would be converted to Money market funds and deposited in the TFSA. Problem was the conversion was miscalculated and too large for annual deposit. Covid was happening at the time, and TD reduced Help line hours. I had to scramble to send CRA an explanation for the overpayment. It took many weeks calling the Help line before the extra cash was withdrawn.

Q: In your experience, how do underwriters of new issues "support" the price of a stock once trading has commenced; and what kind of under-standings do parties agree to regarding the timing and other aspects
of this activity? Thank you.

Q: Hello Peter,
In general, what does one do if a stock that was doing very well all of a sudden goes in a downward spiral without any news? I am using Nuvei as an example, but the question applies to other stocks that may experience similar investor sentiment.. Also, what is the best site to get earnings release dates as wells as latest news releases? Thanks very much

Q: With regard to the question about not being able to log in to TD WebBroker, here are two things to try. The first has worked for me. The second is worth trying.
Log in to EasyWeb, then switch over to WebBroker by clicking on an investment account. Log in on your phone using the mobile app. It may be that the inability to log in to WebBroker is due to a DDOS attack on the WebBroker log in, not that the entire system is down, and the banking and mobile log ins are not being hit. As a last resort you could phone them, but given the response time these days, that may be equally frustrating.

Q: Hello Peter,
I hope this does not reduce my credits as it is a general question which i am sure other members would appreciate having an answer... I find overall the TD webbroker has many issues where one cannot log in at times. Today, it has been down a good part of the morning.. What avenues do investors have as we could be losing a substantial sum if we want to sell or buy stocks and the site is down at times.. There has to be some accountability for trading platforms. If these are not the type of questions relevant for this site, please let me know. Thanks in advance.

Q: Why do some stocks not have an options market? Are they not missing out on the benefits of those that do?

Q: Hi guys - when (if ever) does it make sense to sell individual stocks and replace them with a focused ETF? For example, I hold the 3 chip stocks above (though only for about 3 months, so only modest gains) since I expect AI, gaming and 5G to be areas of growth in the next few years. Would it make sense to sell these and replace them with SMH, which holds 25 semi-conductor stocks? These 3 are among the top SMH holdings and SMH holds other interesting stocks like TSM, ASML and MRVL. Obvious downsides are that buying SMH would add stocks that aren't currently doing so well (INTL) and would dilute my concentration in these 3. For a non-professional, part-time investor does this simplification make sense or does it significantly limit the upside?

Q: Happy new year!
A general question. I'm keeping 15% cash in my TFSA. I'd like to spend them whenever the market drops. However they don't generate interest. I'm wondering if there are anything such as bonds that gives me daily interest, or at least short term interest. If so could you suggest what bonds would be a great buy.
Thanks!

Q: Hello
This year, I plan to purchase an emerging market ETF (thank you for the suggestion) for my and my husband's TFSA. My question is - should I put most of the funds in a few lump sums or monthly over a year? Emerging markets seem undervalued compared to other markets and this fund has been steadily increasing which makes me think it will steadily increase over the year.
thanks