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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: Considering how Trudeau and Freehand are cranking up our deficit what are thoughts longer term thoughts on the direction of the loonie?. I’m guessing that with the strength in oil lately our dollar does rise but when does debt override the price of oil? I am leaning more and more towards the world’s reserve currency because of the current “green leaning” government but the recent loonie strength gives me reservations.
Your thoughts please.
Thanks for your great work!
Bob
Read Answer Asked by Robert on March 15, 2021
Q: Hey guys,

I have $18,000 in an RRSP and I am looking to split up my Money into Canadian Currency ETF's. I am thinking of an S&P 500, TSX 60, Emerging Markets and European ETF's.
What are your recommendations and allocation % for each. Timeline is 25-30 years.

Thanks a bunch
Read Answer Asked by Nick on March 15, 2021
Q: A general comment in response to the flurry of questions pursuant to XBC's recent declines. I, too, have taken a paper hit on XBC (down by half). But I went in knowing the risks and am playing the long game. This could turn out badly, or not. But it is part of a well-diversified portfolio, so the one hit is tolerable.

I'd like to remind fellow members all stocks have risks, and 5i to its credit has been consistent about potential risks of XBC and the view that it is a longer-term hold. Below are quotes pulled from 5i's December 21, 2020 Review (Report), followed by answers to some recent questions from members.

REPORT

"Xebec has customer concentration risks with five main customers accounting for ~40% of Xebec’s total revenue."

"...XBC faces risks associated with volatility of oil and natural gas prices as many of Xebec’s customers rely on the sale of natural gas."

"While the stock can see severe volatility in any short-term period, we think XBC is a name in the renewable energy space that has the potential to reward patient investors over the long-run."

"B+. Fundamentally strong. ... Good for the long-term, but some risks exist."


ANSWERS

Feb. 11, 2021 to Garth: "We like XBC's prospects and growth. It is still quite high risk and the higher valuation today adds more."

Feb. 1 to Ilie: "We think XBC has room to run from here, but we would take a long term approach."

Jan. 26 to Warren's question in which he states he's looking for growth and has high risk tolerance: "We would consider ... XBC..."

Jan. 21 to Kay:
"...would be fine buying XBC today with a long term view."

PS: I'm a paying member as everyone else and have no relationship whatsoever with the company or any of its owners or staff.
Read Answer Asked by Marc on March 15, 2021
Q: Not a question, but a comment on the question of when BFT will merge with Paysafe, the merger vote has been set for March 25 (https://www.sec.gov/Archives/edgar/data/1818355/000119312521060961/d81873ddefm14a.htm). If approved, PSFE should start trading on March 26 or possibly the 29th. https://spactrack.net/daniel/ is an excellent resource for tracking SPAC mergers.
Read Answer Asked by Michael on March 13, 2021
Q: Can I get your take on this US ETF. It seems to have out-performed all the other smallcaps this year. I have some money in it and am thinking of increasing my holding here.
Read Answer Asked by John on March 13, 2021
Q: With the price of gold bullion falling the dividend yields for several gold miners is looking attractive. At a selling price of $1,700 and a production cost of ~$900 it would seem that dividends are not at risk. Would you agree that this is an opportune time to purchase some the miners who have attractive dividend yields? I have listed three which are on my watch list. Are there others you consider worthy of further investigation?
Thank you
Read Answer Asked by Ronald on March 13, 2021
Q: This is more a comment about covered calls. I invested in a few of the covered calls in October 2017 primarily for the income. A larger percentage of the investment was in the BMO Canadian Covered call and when it was purchased the TSX was at 16,000 and the unit value was approx 20.00. Now the TSX is at 18, 837 and the unit value is $17.46. The energy stocks in general are still down about 10% compared to October 2017 however the banks that the ETF holds are around 20% higher. The downdraft in March last year was painful but I needed the income so I did not sell any of the BMO covered calls. Most of them are still lower except the US ETF. I do expect that over time the stock market will continue to rise (as it has over the last 100 years) and I will get back to what I paid for the ETF's however my story shows how these work with a major downturn in the market.
Read Answer Asked by Bradley on March 13, 2021
Q: Dear 5i
I currently don't own any individual bank stocks as i have achieved this exposure via the ETF`s CDZ and ZLB . I'm beginning to think though in the current climate that adding individual bank stocks might not be a bad idea in all 3 of our RRSP accounts , as opposed to adding more to the above noted ETF`s . I'm also planning on adding SLF and GSY .
So do you recommend sticking to the original plan and just add to the ETF`s or start accumulating individual bank related stocks for each of the accounts to add a bit more banking punch?
Thanks
Bill C
Ps Retired
Read Answer Asked by Bill on March 13, 2021
Q: Hi Peter, Ryan, and Team,

Sorry for yet another question about Xebec. I realize that stocks in the growth portfolio are by nature quite volatile, and since this holding is in a TFSA, and XBC closed today (Friday) with a loss in the account of 36.6%, we're wondering (based on your long experience in bull and bear markets or when a particular stock runs into difficulties), what kind of timeline we 'could' expect to recoup this loss.. We're aware that the 'green' sector, of which Xebec is a key player, stands to benefit from environmental initiatives and programs from different governments, including our Canadian regime, and the Biden administration, among others. However, since Xebec's problems appear to be somewhat company related, what advice can you offer? I should add that we both are fortunate to have defined-benefit pensions, and don't need the TFSA funds, but it's certainly gut-wrenching to see such a loss in one day! Your guidance is always greatly valued.
Read Answer Asked by Jerry on March 13, 2021
Q: Hola 5i (I am currently in Mexico hence the "hola"). I have not sold my siyata wireless so today I checked their press releases and then this quarter they have announced three large sales of their equipment. The stock popped a bit and has since pulled back. Is this the sort of stock that has to have constant good news press releases to keep its upward momentum? Would a strong quarterly report give it some traction? I know Siyata has had nothing but pain for long term holders so it has to find new investors who think its story about its potential grow can come true. If more police, fire, and ambulance departments want the sort of device that Siyata makes they could be some great sales momemtum and a tiny company doesn't need to make that many sales to make their "comps" from previous quarters look good. Do you see any potential for this microcap?
Read Answer Asked by Paul on March 13, 2021
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