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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: Hello 5i,
Crius has a 248.6% Payout Ratio for the March 31 2018 quarter! It is claimed that this is for Phantom Unit Rights: cash paid in compensation for time invested by upper echelon. This is according to a Phantom Units Rights Plan (PURP). Does this take place every three years? Distributable Cash was 3.7 million and total distribution was 9.2 million. Does this make sense?
I hope that words involving "phantom" and "PURP" are words that actually do bode well for future success.
Read Answer Asked by STANLEY on June 04, 2018
Q: Hi 5i,
In Jan 2018, I added mtum to my mom’s tfsa as her us $ holding. It would represent the most risky part of her holdings in the Tfsa
Since then, I have read that momentum stocks/strategies do not do well in a bear market. Is there any truth to that claim? With a pb over 4 and a pe over 26 should I stay the course, or purchase 2 or 3 value stocks in her account with that us $?. If the latter, any suggestions?
Many thanks,
Read Answer Asked by Kat on June 04, 2018
Q: Further to a question about directing USD dividends (paid by Canadian companies) to a USD bank account: I think the question is both more complicated and more simple than 5i's answer suggests.

As is generally understood, a number of Canadian companies - for example, CSU, NSU, and OTEX - can by bought/sold in either CAD or USD, but pay dividends in USD. At the same time, many Canadians have occasion to make purchases in USD. This leads to three questions:

1) is it better to buy/sell in CAD, or in USD?

2) how do you accept USD dividends without paying currency conversion costs?

3) how do you move USD from a brokerage account to a banking account without paying currency conversion costs?

As concerns (1): supposing that the stock were equally liquid on Canadian and American exchanges, the question comes down to tax-preparation preferences. If you buy/sell in CAD, then you don't have to do currency conversions when determining the adjusted cost base.

As concerns (2): any competent brokerage will have some way of accepting USD-denominated dividends without currency conversion. For example, at TD, if you held CSU/NSU/OTEX/etc in a USD-denominated account, then dividends would be accepted in USD. To move a position from a CAD account to a USD account, you ask the broker to 'journal' the position from one account to the other. Journalling incurs no currency conversion fees, but you will have to remember to ask the broker to do the journalling for you, each time you make a purchase (or sale.) And, of course, you will still have to currency-convert the amount of each dividend for tax-preparation purposes.

Note that some brokerages - for example, Interactive - do not segregate CAD- and USD-denominated stocks in separate accounts.

As concerns (3): some banks - for example, TD - provide for USD-denominated accounts/cards. Once you've set this up, you should be able to move funds from a (TD) USD brokerage account to a USD bank account or credit card in much the same way as you would CAD-denominated funds. Of course, the bank will charge you a fee (or require a minimum balance) for this.

Clearly, there are certain dependencies, here, on the services of particular banks/brokerages. In general, however, it should be possible to do as the member asked: direct USD dividends to a USD bank account without (double) currency conversion.
Read Answer Asked by John on June 04, 2018
Q: Good day...my question is concerning 5 G being the new evolution in wireless...which companies in your 3 portfolios would be part of this expansion and if you could rate them highest possibility to lowest possibility...also, thanks for the great education that I am receiving from being a member...Eugene
Read Answer Asked by gene on June 04, 2018
Q: Good Morning. In addition to my Canadian holdings, I have a well diversified of large cap US equities, most of them return a small dividend, all of them highly are highly affected by the news of the day, hour, minute.
As this ETF, returns a decent dividend, year after year increase in value & would diversify my holdings into small-cap stocks in sectors less available in Canada, do you think it may be a wise investment, as an alternative to IWO? I think, perhaps unreasonably, that small cap companies may be less subject to "news", because if these politicians mention CAT or say FB, as examples, everyone has an opinion, however small caps daily fly under the rhetoric radar.
I am not trying to hide from volatility by selling large caps to take a position in small caps, just trying to reduce it overall, in my holdings.
Do you know of any other US EFT, that is similar in nature to this one?
Thank you so much in advance.

Read Answer Asked by Susan on June 04, 2018
Q: RBC direct investing is offering a private placement at $76.15 while the last trade was at $78.24, does it make sense to place an expression of interest. Secondly what does the following mean. " Please be advised that if you participate in this new issue offering, RBC Direct Investing will receive a selling concession equal to C$1.43 per share"
If i expressed interest in owning 1000 shares would i actually get less? Please help me understand the math and logic behind this?
Read Answer Asked by Brian on June 04, 2018
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