Investment Q&A

Q: Hi team,
I just read your reply to Murray on activity in a TFSA and potential CRA thresholds. It causes me some concern. I do most of my trading in my TFSA to maximize my tax-free growth. I am not even close to $500,000 but typically average more than 5 trades per week. My style is to add and trim positions in stocks based on momentum and growth outlook. So, I trim off some of one stock to add a bit more of another. I don’t consider myself a day trader, where someone buys a penny stock or pot stock in the morning and flips it in the afternoon. I am into big cap stocks and do most trading in U.S. tech names (not that it matters). I read various articles that CRA interest would only be triggered by much more trading than 5 per week. So, I have two questions. Is the 5 per week threshold just your personal view or have you seen some evidence of that? Secondly, there must be millions of TFSAs in Canada. How would CRA have access to trading activity?
Thanks again,
dave

Q: Dear 5i
It was great seeing you at the Money Show.
I have been a member for 6 months and love your service. I would like clarification on something that I have read regarding very active investment accounts that are TFSAs but perhaps it also applies to RRSPs. Although I am not currently an extremely active investor in terms of number of trades placed, and it doesn't really suit my temperament, I have read that the CRA has designated some of these very active accounts as a "business" and removed the tax shelter from any gains realized within these accounts. What is the actual rule regarding this? What I read was very ambiguous and not quantified. Thanks so much for your help.
Kind regards,
Murray

Q: Hi guys,
I hold one ETF and a mix of equities (selected from your portfolios) in my TFSA, with the following weightings:
COV 5.48
CSU 6.70
GSY 5.42
KXS 4.93
PBH 4.26
PHO 4.50
SHOP 7.57
SIS 6.59
TOY 6.05
TSGI 5.63
VUN 30.35
WEED 12.51
Everything is up from initial purchase (many thanks) but some have grown much faster than others. I am considering rebalancing and/or adding a new position. Is there a notable position that you would add/remove (e.g, VUN in exchange for equities)? I have VXC and VCN in my RRSP so maybe VUN is better located in there.
Thanks for the amazing service and knowledge base that 5i provides.
Mark

Q: Morning guys:
I have a cash trading account. I need to put some names in a tax free savings account. Looking at the above names . Can I sleep at night with these names for tax free accounts. Thanks for your great work.
Best in the business boys.
Mark.

Q: Peter/Ryan,
What strategy/positions would you recommend now for a new TFSA with $30k cash and no other holdings ? Owner is 55 and with a well balanced RRSP etc. Thanks.

Q: Hi, I've been holding some cash for a few months in my TFSA. I'm 52, growth oriented investor. I have TV as the sole investment at the moment in this account. Can you suggest a strategy for building out the account with stocks? How should the investments differ from my rsp? Thanks.

Q: Hello Peter and team,
I look after a TFSA for a 25 year old, which currently has about $12,000, divided evenly among 4 stocks: PHO, GOOG, COV, and KWH-UN.
It also has ~$3000 cash to deploy. I am planning to buy CSU on the recent dip, but before I do, I wanted to check whether you would support this move, or perhaps have another suggestion, since the account is already quite tech-heavy. I don't mind being overweight in tech, esp. given the long investment time horizon. Any suggestion either for or against, and any other stocks you would suggest instead of CSU?
Thanks again for your excellent service!

Q: Helio 5i
My wife and i are setting up our RRSP`s largely in fixed income , ETF`s and large dividend paying stocks in preparation for retirement so as to have steady income when the time comes .Assume that all RRSP accts are balanced appropriately.
We also have a fairly large sum of money in both of our TFSA accts (maxed out) and in a margin acct.
The question is , if we are set up appropriately in our RRSP`s in terms of balanced portfolios , how should we approach the monies in the TFSA`s and the margin acct ? Should be mainly go with higher quality equity stocks or should we balance those two accts similar the the RRSP accts ie stocks, fixed income etc ? ( note the margin acct is not borrowed money). Are ETF`s appropriate for TFSA accts ?
Thanks
Bill C

Q: Good day,

I currently have 2600$ in cash in my TFSA investment portfolio. I was looking to add from the your Income portfolio. What would would recommend from this portfolio?

Q: Why the CRA is targeting some TFSA accounts in court; Should an average investor be worried? by Jonathan Chevreau Aug 27, 2018 https://www.moneysense.ca/save/investing/cra-tfsa-accounts-court/

I don't think this is something I need to worry about just yet as I only have $81k in my account and my wife has $106k in her KTFSA (I call it the Kinda Tax Free Saving Account because it's kinda ok to make some money just not too much). We both still have $7k TFSA room for this yr. but we also have plenty of RRSP contribution room. In light of this article, I'm wondering if we should hold off adding to our TFSA until more clarity is provided by the either the courts or CRA.

Like many, I'm sure we aren't using our accounts like a business but at the same time I don't know what triggers an audit. Nor do I wish to find out since I don’t have the time/resources to prove our innocents. I'm starting to think this may be concerning to more than just a handful of 'savvy' investors as the article would imply.

We appreciate your insight on this topic.
Thanks

Q: Hi Peter and Team,

I can never stop saying thanks for your great stock recommendations and giving me confidence to drop mutual funds from my portfolios.

A question about my TFSA. I hold PBH, PHO, SIS, KXS and WPK. The performance has been quite good as I am using the TFSA for long term growth. Any suggestions on the need to change any of the stocks in this mix?

Thanks.

Marvin

Q: Greetings! I am looking to add to my TFSA (long term), holdings that have good yield and strong dividend growth. I was considering either AQN or EMA, or should I divert from utilities and go with something with more potential for capital appreciation, TCL?
thank you!

Q: Good afternoon,
With the spin out of Equinox's copper assets "Solaris Copper Inc. I received a letter from my brokerage firm informing me the shares of Solaris have been deemed to be a non-qualified investment for registered plans under the income tax act. Without getting into the penalties that may be incurred, can I forget the letter since my shares are in my TFSA.
Thanks,
Charlie

Q: Hi Peter/Ryan,
I recently sold MG from my daughters TFSA and would like to either add to 1 or 2 of her portfolio underweight holdings (DOL, SIS, TCL.A, PKI) (all held in her TFSA) and/or buy PBH in her TFSA which is also in her investment acct at a portfolio weight of 3%.
My inclination is to add to DOL and buy PBH. Plan is long term hold. Any thoughts? Disregard sector percentages.
Many thanks.

Q: I would like to add two growth stocks to my TFSA. I would appreciate 3 suggestions to choose from. Thanks for a great service. Dan

Q: What is the most tax effective way to hold US stocks? I’m 32 with a good income, and have a full balanced tfsa holding Canadian stocks and etfs. I’m interested in building an account to hold US dividend aristocrats/Kings set up on auto deposit/drips as a set it and forget it style account. From everything I’ve read the dividend aristocrats generally have returned better than market average with good security and fairly stable growth, would you agree? I own my own companies so my income is structured to be very low tax, so I don’t need the break offered by the rrsps but I do have quite a bit of contribution room there. Would you recommend rrsp for US holdings for tax reduction, or is there a more efficient way?

Thanks

Q: In the near future I will be making some TFSA investments. My understanding, from commentary I have heard, is that it is wise to not invest in US stocks as the US government withholds dividend payments inside such an investment vehicle.
However, my thinking is that this does not necessarily mean that buying US stocks inside a TFSA is an absolute no no as this negative should be balanced against the positives with a given US stock. If the company is a fast growing US tech stock, for example, that doesn't pay a dividend then the withholding of dividend income is a moot point. Please comment. Thanks very much.

Q: Is it necessary to wait 30 days to rebuy same stocks in tfsp.Thanks

Q: Hi. What are your views regarding buying Twitter as part of a well-diversified portfolio? Thx

Q: Since writing covered calls and cash-secured uncovered puts has the same risk/reward profile why is only covered call writing permitted in registered accounts? Is that a government regulation or an individual bank decision?

Thank you.

Milan