Investment Q&A

Q: I hold Japan and South Korea ETFs for diversification. EWY’s holdings include Samsung and other large well-run large industrials in South Korea but EWY has nothing for several years (continues instead to go glug-glug). Likewise, my various Japan ETFs hold good businesses yet seem to have only downward trajectories. Do you think these ETFs have sunk so much now that one may as well ride it out? OR:

Is it better to sell any ? Which to sell and which to keep? (In theory I could sell now and revisit later, but I have never done that well. My several questions today show my various psych biases. Yes, one can be self-aware AND continue to make the same behavioral mistakes).

Q: I bought EWG and VGK in tax-deferred accounts for diversification. Both are currency-unhedged. There has been significant uncertainty in the businesses held in these ETFs and both are down significantly. I had decided to ride things out and did not sell these and other such ETFs (the usual loss-aversion ).

Most of us have become increasingly concerned about Europe area companies (humanitarian crises, ongoing war, energy costs). Is one better to sell now, take the loss and come back later? OR do you think these ETFs have dropped so much now that there is a better than even chance of recovery in their price?

Q: I have only US$ available and tend to invest only in inter-listed companies (e.g. a Cdn bank, Canadian Oilco, and other large caps). I asked both iTRADE and RBC-DI *NOT* to convert the dividends such companies pay in C$, and instead let me accumulate C$. My understanding is that an investor has the legal right to demand the bank NOT to convert dvidends.

However both brokers I name here claim that to avoid unwanted Forex conversion, I need to ask them to journal the holdings over to the “side” I want.
In your experience, is this normal? Or can one insist the broker leave the holdings in the currency of original purchase? Do the brokers have a legal right to make the above-noted demand?

This issue affects many 5i members:
I had wanted both brokers not to convert because they were applying the worst possible exchange rates. Many of your members will have holdings bought on TSX where the company pays dividend in US$. AQN (inter-listed) is one of several Canadian companies that pays dividends in US$ . I believe you likely have many members who object to the very disadvantageous exchange rates applied by brokers — and certainly many would object to “automatic” conversion, surely.

If brokers are within their rights, are there not laws, rules & regs that require brokers to apply FAIR exchange rates?

Q: Peter and His Wonder Team
I am not a doomsday type but am an old Boy Scout. Our motto was "Be Prepared". If Paranoid Putin does use a limited nuclear bomb...one authority said that the West would "annihilation his army with conventional weapons. If that were to happen I suspect the markets would crash.
So please give me your opinion...what would happen to gold companies? I trust gold coins would be safe...if so which ones should be purchased. Please give your opinion on this matter! Thank you for your excellent service.

Q: I own ILMN, VEEV, GH but not LNTH. Would you recommend a switch to LNTH for more growth? I can use ILMN and VEEV for a tax loss - should these be repurchased or just buy LNTH (or another stock?)for more growth?

Thanks for your service !

Q: Hot.un has a mouth watering dividend of 8.71%
It recently reinstated its dividend and is way below what it was before Covid, both in price and dividend amount
Is it worth the risk

Q: Hello 5i Team

I track the NCIB purchases by Imperial Oil and have noticed the following:

Exxon Mobil reports their insider sales to IMO on a weekly basis (shows up on both 5i data feed and SEDI weekly reports).

Imperial Oil purchases on the open market are only reported at month end, showing the daily purchases.

I have noticed with other Canadian companies (CNQ and Suncor) appear to report monthly however they only report the months total purchases and not the daily purchases.

Question

Is Imperial (i.e. Canadian companies) only required to report their NCIB purchases on a monthly basis? This is in contrast to the US SEC requirements which appear to required daily reporting on a delayed basis.

Is there a website that lists the requirements for NCIB purchases or would I have to consult the relevant TSX guidelines or securities legislation?

Thanks

Q: Peter; Apples and oranges but which one do you prefer in todays environment? Thanks. Rod

Q: How does Suncor's sale of wind and solar assets to Canadian Utilities Limited impacted there potential as an "energy" company in the long term 10-20 years? To me it seems this sale indicates they focusing on petroleum products. To put this into context, I bought at $21.50; sold half at $45; and am holding the remaining shares long term assuming they have the potential to be a major energy company even as the world moves away from petroleum as its main energy source.

Should I still hold or move on? I am looking for reasonable growth over 10-20 years with this money.

Q: On Scotia iTrade under news Absolute Software they say on November 8 they will report first quarter Fiscal 2023 Financial Results. On their earnings review, they say on Q4 2022 an earnings per share estimate was -0.08 and the actual was -0.10. They are calling it a surprise in red -25.0% and the stock is down today. This is confusing because in the news it stated it was not reporting until Nov. 8 which is a ways away. Yet, in their earnings review they say a surprise -25.0% on the report. How does this sound to 5i? Thank you.

Q: Hi Everyone at 5i!!!! I have a TFSA with a goodly amount of Tech stocks, Shop. Light speed , unity software, Crowdstrike NVDA etc… most of which are in the tank. So my thinking is to just hang on for five plus years in hopes of recovery. I see no sense in selling because the realized losses would cause severe heartburn. The TFSA also has half of its value in divided paying stocks .. banks , Fortis,.. etc. So now my question… would you suggest I reinvest the dividends in the beaten up tech stocks in anticipation of a comeback or reinvest the dividends into their source stocks. I am newly retired but don’t need the money and hopefully not for quite a while . Cheers, Tamara

Q: I'm bearish on the Euro (compared to the US dollar). Can you give me the name of a couple of stocks or ETFs that would be appropriate to consider, if I believe in this thesis?

Q: How much of an overlap is there between VGT and FDN? Is one substitutable for the other?

Q: Hi 5i Team,

With small and mid-cap stocks at very low valuations what would be your must owns for stocks in the US and Canada for solid growth over the next 1-5 years with the core characteristics that you look for including solid growth in revenues, strong balance sheet and etc.?

Over the course of the next 6 months would you be a buyer of small to mid cap stocks or large cap stocks? I'm a long-term investor with a medium to high growth risk tolerance.

Thanks as always,
Jon

Q: About 2 years ago I invested in RSP the equal weight SP 500 etf. Since that time SPY the cap weighted etf has decreased about 10% more than RSP. Now that tech valuations have come back down I am considering selling RSP and buying SPY. I recall reading here that you expect tech and consumer discretionary sectors to lead once inflation starts to move down and interest rates peak. You have also mentioned that markets look ahead.

It looks like both tech and consumer discretionary are down more than 11% in the last month.

Could you give me your assessment of this trade?

Q: Can you please rank these REITS as long term investments?
Does this ranking change if we are in for a long period of inflation?

Can you please rank them by valuation at today's prices?

Q: With rising interest rate BANKS,AND SUNLIFE ,MFI,Great west will benefit and are buyable by selling other stocks with loss?

Q: I have some cash on hand that i will invest in a GIC or deposit into a high interest savings account. With interest rates expected to risewould you suggest putting the cash into a GIC (1 year term) or a high interest savings account? Please provide your reasons for selecting a GIC or HISA. Are there other safe investments that will provide a reasonable rate of return? I am considering a 1 year term for a GIC. Would you suggest a different term for a GIC? I do not need the cash for the next few years.

Q: AMT has been beaten down badly. I have some funds in US $ that I thought I should put to work. This should be fairly recession resilient but will sharply higher interest rates hurt this company when they have any of their substantial debt coming up for renewal? I am never sure what drags down the value of utilities, telcos, reits, etc when interest rates go up. Is it the fact that TINA is no longer true or is it the big debt loads become too big when they have to be renewed at higher rates? Or is it a combo of the two? AMT has not had a particularly high dividend at least recently so I am not sure the TINA effect applies in this situation. What is your take?

Q: In a potentially inflationary, or even a potentially stagflation environment I like the composition of this small cap ETF since it is slightly overweight on industrials and materials - Would you agree?

It appears quite cheap. Is that mainly because of the cyclical nature of a lot of their holdings?

I'm seeing a 5.67% yield. Would this be sustainable in the mentioned potential economic environment? On one hand these are small caps, which perhaps puts that yield at risk. On the other hand, one would think that the materials and industrial make-up would help hold it up. Thoughts ?