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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: Re Sylvia's etf dividend question
Just my two cents but I think her question is a very good one. ETF dividends can be tricky. I hold a CIBC canadian index etf that I bought through a friend who is a broker. I didn't research the fund much other than note it has relatively low MER.
I learned though that the dividends are automatically reinvested in units (I was never consulted on this), and in any case are only paid once annually even though all of the underlying paying companies pay either monthly or quarterly. I never actually "see" any dividend. Seems like I am losing some compounding effect there, as the reinvestment occurs only once per year. Over a long period I think this may be significant. Anyway, suggest you research carefully before you buy. Email the fund directly and ask specific questions about the div.
Good luck fellow investors!
Read Answer Asked by john on July 27, 2015
Q: Would you be able to give me any info relative to this US infrastructure stock? Many thanks
Read Answer Asked by Helen on July 27, 2015
Q: Hi Peter and Team!!! It gearing up for a great weekend weather wise, Yay! I have 16,000 to deploy in my RRSP. I would like to buy one or two ETFs that cover the US market, broadly and perhaps dividend aristocrats. VUN and VGG...are in Canadian funds. I would like the equivalent listed in US dollars, paying out in US dollars as well. I asked my investment advisor, and she could not give me any alternatives except for the SPY. Could you suggest some ? And on that topic, is it a good idea to hold another currency (in this case US dollars) in the RRSP, or just have an ETF representing the US market in Canadian funds? Thank you, and have a great weekend!! Cheers, Tamara
Read Answer Asked by Tamara on July 27, 2015
Q: I never thought Oil would of went this far down. I am under water on most but not all. My percentage of oil is at 12.98% of my portfolio. My stocks are BNE, BTE, CPG, FRU, HWO, PGF, SGY, PER.US and SBR.US Just curious should I keep all or some of these. Like Rod L some days I feel like just throwing in the towle on these stocks and move on. Is 12.98 too high and if I should trim. Which ones should I trim Thanks.

Jimmy
Read Answer Asked by Jimmy on July 27, 2015
Q: Hello Peter,
I have XHY and CHB as part of fixed income portfolio. However, wondering the benefit / role of these 2. Very volatile and the dividend not enough to offset the decline in share price ( net loss on year basis). Is it worth holding these with any specific purpose or would you recommend better alternate. My need is more stability and bit growth than pure income. Thanks.
Read Answer Asked by RUPINDER on July 27, 2015
Q: It would appear high production of oil by OPEC and the US is successfully driving down the price of oil. Can you tell what the end game is here, is there an overt pending event that we can monitor that they are driving the market to? If prices are not set by the market, but at the will of foreign entities, why are we investing in Oil Companies?
Read Answer Asked by Phil on July 27, 2015
Q: Could you give me your best estimate on the safty of the dividends of these three stocks for the next 12 months.
Thank you
Read Answer Asked by Allen on July 27, 2015
Q: Hi Peter & Team: I have ZDV in both TFSA & non-registered acct, should I take the loss and get out as energy & financial are weakening? Thank you.
Read Answer Asked by LOUISA on July 27, 2015
Q: I appreciate that this is a US holding and brand new, but just wanted to get your thoughts on its potential. Cyber security is getting a lot of press these days and I do not see this changing anytime soon. Is there any other ETF out there that does the same thing but with a lower MER?

Great job 5I Team and thanks.
Read Answer Asked by MARK on July 27, 2015
Q: I currently have 16% of my portfolio in Consumer Discretionary (CCL.B, DHX.B, DOL, GIL) and about 5% in Utilities (BEP.UN). I was thinking of selling Gildan (GIL) and using proceeds for Interpipeline (IPL).

What are your thoughts of this change based on future growth outlook and share appreciation? Am I selling a good performing stock and trying to catch a falling knife?
Read Answer Asked by Mike on July 27, 2015
Q: Hey 5i, I sold my ACQ at $67 and $42 THANK YOU! I am holding BYD.UN at an upside of 143% AGAIN THANK YOU! I have taken profits on Boyd along the way but wonder what makes it different than ACQ which would help me decide to continue to hold it? Do you see continued growth and what red flags would I look for which would indicate a reversal in growth.
Read Answer Asked by Martin on July 27, 2015
Q: Hello,

Would you considered this two equivalent in terms of future potential? If not do you have a another one?
I am considering selling TOR (for tax reasons) and buying VII?

Thank you
M
Read Answer Asked by Marios on July 27, 2015
Q: I'd like your comments on the following article from the Financial post:

http://business.financialpost.com/investing/trading-desk/switching-from-growth-to-value-stocks

The article suggest the the current environment may be more suitable for value stocks versus growth equities. Given 5i tends to favour growth (I think), what do you think of this? How does one know when a stock is too expensive in relation to its growth?
Read Answer Asked by Mike on July 27, 2015
Q: I am looking to add to my position. Long term hold 4 to 5 year range. Any thoughts as to were the company will be long term or perhaps a future dividend?

Thank you in advance

Ernest
Read Answer Asked by Ernest on July 27, 2015
Q: Hi, Magna's recent acquisition in Germany has received praise from most analysts. However, stock price appears to languish and trade even below the level stock was trading before this announcement ($72).There was also huge volatility/trading, on first two days after this news ( high of $74.50 and low of $68.50).I started a position in Magna recently and would appreciate your comments. Thanks
Read Answer Asked by rajeev on July 27, 2015
Q: This is perhaps the most naive question you've ever answered in your life, but I just have to ask anyway. How do ETFs actually work, in respect to dividends? That is, where do all the dividends go, from the respective companies within one ETF?

For example, I note that VGG has a dividend yield of 1.5%, while any of the single companies within the ETF outperform its yield -- Microsoft, as an example, has a present yield of 2.6% and JNJ is at 3.0%. If one were looking for a decent income stream, wouldn't it be better to simply put your money into the individual stocks and then reap the better reward?

I understand the diversity that is provided by holding an entire basket, but I have found that ETFs very rarely outperform good equities, if they went toe to toe -- and there is always the risk of the under performing equities held within that basket.

In any case, I am still wondering where all the dividends go, from the individual companies, and whether the end consumer ever really profits much from it.

Does the fund manager rake it all in, from the equities? Who wins, who loses on this type of trade.

My apologies if this question should be in the Stupid Queue, but I've just never understood why ETF yields are so much lower, for the most part, than the equities they hold.

Thank you.
Read Answer Asked by Sylvia on July 27, 2015
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