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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: I am a senior who needs dividends. Currently preferred shares are 20% of my taxable account(10% overall). I hold PPL.PR.M and ALA.PR.I. Could you recommend 2-3 other minimum rate resets?
I held and sold my Concordia shares the day before you took them out of the growth portfolio. Your advice has been great and very consistent. I wish 5i was around 50 years ago.

Thanks, Jim
Read Answer Asked by William on August 18, 2016
Q: Can the terms of the recently announced debenture be seen to suggest good things are in store for this company? The deal has a conversion option that is 30% - 40% higher than the current stock price. Given that this stock has shown very little growth over the past five years and you have suggested previously that you feel it is primarily an income stock it seems like a high bar to reach to convert. Since this is a bought deal, I would assume that this means the underwriters think this conversion price is quite attractive. Why would the conversion have been set at such a price? Does this strongly suggest something is in the works from a growth/acquisition point of view? And is the interest rate being paid expensive/cheap?

On a secondary note, is the debt from the previous takeover declining at a reasonable rate?

As always, appreciate your insight. I would also like to add that the changes you instituted several months ago are really working well. I am a long time subscriber and I keep learning more and more every day, so thanks.

Paul F.
Read Answer Asked by Paul on August 17, 2016
Q: Good morning,
I own BCE preferred shares BCI-INC-CUM RED 1ST PR-AA. The value has dropped in half since my purchase. I understand these can be redeemed in 2017 for $25.
If BCE decides not to redeem the shares and extends the security can they change(reduce!) the rate of return which is currently 3.5%?
Read Answer Asked by Margot on August 02, 2016
Q: I currently hold BPY (up 50% over cost) and H&R in my portfolio 4% and 3% respectively.
I am considering swapping BPY for BEP for the additional income. Your thoughts?

I also plan to crystallize my capital losses and purchase the following ETFs:
Non registered:
ZPW – US Put Write
ZWE – Europe Covered Call hedged to CAD.
ZWH – US covered call
CPD – CAD preferred
XRE – Capped REIT

Registered (RRIF):
PGX:US – Preferred.

Each would constitute 2% - 3% of my portfolio. Diversification is my intention, but risk and surety of income is the primary consideration in all of the above noted.

Again, your thoughts.

Thank you for considering my questions

Gail
Read Answer Asked by Gail on August 02, 2016
Q: I am looking for general advice on the fixed income side of a portfolio. Where should I go to find fixed income that has a decent return? Or should I not worry about that, and concentrate on dividends from stable companies.

I have about 10% cash, and 10% altogether in ZPR, CVD, CSU.DB (all three obviously not fixed income). BTW, retirement in ten years or so.
Read Answer Asked by Richard on August 02, 2016
Q: I am considering purchasing a preferred ETF. Perhaps, one of CPD, ZPR, PPS or HPR. I notice that HPR has the lowest yield and highest MER but over the past 5 years it has done appreciable better; i.e., lost quite a bit less, than the other three. Is this attributable to its 'active' management or is there something different about its diversity of preferred shares?
Read Answer Asked by richard on August 02, 2016
Q: Thank you for providing a great service. Your recent comments on the Canadian Preferred Share Market and iShares CPD are greatly appreciated.
Please comment on
1) Please comment on iShares US Pfd Stock ETF (PFF) which trades in US$.
2) Is there any merit in holding a portion of a fixed income portfolio. PFF is about 5% of my total portfolio. Considering the recent upswing I have done well with PFF and have enjoyed the distributions within a registered RRSP. Should I consider holding it?

Thanks

Stephen
Read Answer Asked by J Stephen on July 29, 2016
Q: Preferred shares and fixed income

Hi 5i team : I own only common stocks in my portfolio and since I am a mature person that is near retirement, I have the feeling that my exposure to common stocks is very high. So far, to mitigate my risk, I keep daily of the market changes, so I do not get caught in a drastic downturn.
To get more protection, I have thought in buying some preferred shares , but I know nothing about them to start a position.
Are the P.S. a good way to go ?, if so, what should I learn about them and how (references, books, etc), also what would be a reasonable percentage of my portfolio to have in P.S.?
thanks for your help
Alex
Read Answer Asked by Alejandro (Alex) on July 28, 2016
Q: Greetings Peter and team:

I hold the BCE, Brookfield and Fairfax preferred shares referenced. Obviously they have not fared well over the last few years. I am wondering if there is any reason to hold them at this point? I did notice on Monday when the market was broadly down that they were among the few holdings that were up. Do you think holding them as insurance against a market decline has any merit, or should I just book the loss and move on? As always, your insight is appreciated. Thank-you,
Read Answer Asked by Stephen R. on July 27, 2016
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