Investment Q&A

Q: I like a lot of ideas that Adam brought up today, and 5i response. Lets take stocks like CSU, LMN, AXON, and i could name many more, they are always BUYS at 5i, at the high and at the low, if you have a 5 year outlook. Maybe say that the stock has run to far and wait for a better buy lower, like Cramer does even on his favourites .
Too many investors feel that everything will always keep going up, and as some of 5i investors have found out . Well maybe we have found the low on some of 5i favourites.
Thanks Again

Q: Hi,

The other day I sold 300 shares of a company from an RRSP account. A minute later I submitted a buy order for the same amount of shares in my TFSA. Both the buy and sell were for the same price.

Today I received a call from my broker advising that I had broken the rules(?) and engaged in a wash trade.

Can you enlighten me as to what and whose rules I have broken?

Q: In your profiles under detailed quote you report the dividend but NOT the Yield
Why
As a result us seniors who have RRifs and depend on the income have to go to another site to get the yield.

Q: What is “Cash Value in Life Insurance”. I heard there is Tax Benefits. Is there a video or book. Do you know how it works is there benefit for retirement.

Thanks for the great advice

Q: Dear Team:

Nice articles in your 5 From 5i. Thanks.

This question is based on one of the articles about Retirement portfolio. By Christine Benz.

She talks about 8 (EIGHT!!) years worth of funds invested in BONDS in Bucket #2 for withdrawals! The example in this case study is 80000 per year minus the person's Social Security income. (US based of course.)

Question: Is this allocation to Bonds excessive or reasonable, especially in the coming years of inflation (rate increase) or worse Stagflation(rate decrease/probable/possible?)

I know every person's situation is different. But in terms of principles of asset allocation for a pre-retiree/retiree in Canada, is this a reasonable template?

Q: I know it is a milion $ question.
Do you expect the oil/gas stocks swing to negative regardless of oil shortages all based on sentiment?

Q: It was in the news recently that the Federal Reserve had called in the Banks for briefings. It appeared to be centred around the issue of private credit and exposures in the system. The last time I recall a scenario where the Banks were called in was during the financial crisis in 2008 and at that time there was a lot of discussion about corporate liquidity and potential mergers as the crisis of confidence unfolded. What is your perspective on this situation?

Q: Dear Peter et al:

First of all KUDOS to Chris for his appearance on BNN Bloomberg today. His voice was calm, measured and answers balanced.

A question for you. Slightly different from the usual. As everyone is talking about US Israel Iran war, the tariffs have taken a backseat! Trump Xi meeting has been postponed. Asia and many small countries in the world and European countries too have been affected by the current crisis involving oil price.

Surely they can't afford to pay the tariffs, can they? How is that going to play out ? They cut down their exports to the US? Is Global recession inevitable EVEN IF peace breaks out? Your fellow Sprott alumni, Rick Rule is fond of saying "Tariffs are taxes"! Isn't that the worst thing one can do during a recession?

My friends from South Asia and South East Asia tell me things pretty hard in their cities. Small businesses have already been shut down. This doesn't get much air time in North America.

Anyway, your take on this is welcome.

Q: What is involved with your appearances on BNN? What preparation do you do? Are they paid appearances? Do they limit the size of your entourage? Are you wearing makeup? What do you do during commercial breaks? Do they feed guests and if yes how is the food? Just curious to hear what we don't see on TV. Thanks!

Q: What are you thoughts on the direction of the economies in Canada and the U.S.,inflation or recession?
What sectors would do well for each scenario/

Q: The market is proving pretty resilient given the turmoil around the Iran war and the global impact to Oil markets and economies.

However, there are several additional underlying challenges already being experienced in the markets, like Govt Debt, fear of Inflation and increasing Interest Rates, bad credit, and so on…

I know this is a difficult question, but given the global disruption of the Iran War plus the current market concerns, do you feel that the recent minor pullback in the markets could soon expand into a correction of 10 to 20%??

The market seems to be on a knife’s edge right now and depending on the days headlines could change very quickly.

Thanks
Tim

Q: Dear Team:
Not sure who the author of Rockets and Duds is/are.

What methodology do you use? Percentage of price increase is obvious. Do you look at Technical Analysis? (Momentum oscillators) Can one use that methodology to identify the rockets BEFORE they take off?! Any predictive variable?
The second part of the question, sticking to the same Rocket metaphor, once you identify the Rockets, can one benefit from the "After burn"! :) Till the module falls off!! Catch the momentum and ride it for a little while! LOL.

I wonder how your rockets have fared from the time you published them.
A cool home work for me!

Just for fun question.

Q: Can you provide some context around who you include in the “The Best Stock Ideas”
section of your website?

Q: Last week I was talking to my 80-something neighbour “Jim” (Canadian resident) who recently returned home from his (owned) condo in Arizona.

Over tea this morning Jim’s spouse Susan broadly shared with us her concern of how messy and drawn-out it might be for her personally to dispose of the U.S. property in the event Jim dies before her. Their adult kids want nothing to do with the condo, don’t want to travel to the U.S., and wonder why their parents continue to own instead of lease.

Jim handles the finances and is a strong and silent type. He jokes with me he is immortal because he has no concrete plans of dying. (wtf?..). In his mind, Susan is concerned over nothing because his will transfers everything to her upon his death. Jim changes the subject when Susan asks about the future of the condo. She doesn’t want the stress of settling the disposition in his absence.

Questions:
In your experience,
1)how common is this situation?
2)is there anything Jim (and people in his situation) commonly overlook in this simple plan?

Q: RE: TD Direct Investing - Stock Lending Program

This idea is new to me, and I’m interested in better understanding the concept.

According to the website, the benefit of participating is the interest the person lending their stock receives, which is split 50/50 with TD. There is no indication of what percentage interest you’ll receive. While I understand interest would fluctuate, without a range, it’s hard to determine the actual benefit or whether participation is worthwhile.

For an individual investor.
1) What are the major pros and cons of participating in a program like this?
2) Are there big differences if using a tax-deferred account vs a taxable account?

Q: I am thinking of buying the following ETF's: VCNS, XEF, XIU, WXM, ZSP, VEE, ZAG,VVL, XQQ and XUT. Which of the following accounts: TFSA, FHSA, Non-Registered, and RSP, would be best for Canadian tax reasons to put each one in?

Q: Retired, dividend-income investor. I've been pondering this question for months.

I run a concentrated portfolio, normally holding approximately 10 ETFs and 10-12 stocks.....plus fixed income. Over the years with 5iR, I have tried to follow your rough guidelines...as follows:

1. Target < 15% Covered Call ETFs => I'm just over 15%....ok as is.
2. Target < 15% per Fund company => I'm just over 16% with BMO ETFs (ZLB, ZUT, ZRE, ZWC), 15% with iShares (CDZ, XIT, XST), and < 5% with other funds (NNRG, HHL, HMAX, etc.).

If the target % is based on my entire portfolio, I am ok. However, if it is based on "equity-only", my #'s jump to 22%, 17% and 8% respectively.

Q#1 = please clarify Equity only vs entire portfolio. How much leeway is there if it is only on Equities?

3. CIPF insurance target < $1mm per account (TFSA/Cash total versus RRSP/RRIF total), allowing for the 50-50 spousal split on joint accounts. I'm ok currently, but starting to crowd the limit on one of these.

4. Then we throw in some of the recent questions about a very simplified portfolio based on only a handful of ETFs, so you would obviously be over the limits above.

Q#2 = how do we meet all of these potentially opposing targets?

Thanks....Steve

Q: Hello,
Which US ETF do you recommend to keep cash in USD. Safety being the first priority (US equivalent to PSA or CSAV in Canada). Thank you.

Q: Stepping back and ignoring what is currently happening with the price of gold, what percentage of a portfolio do you think an average investor should dedicate to gold?
Thanks as always.

Q: I think I agree with Eric Nuttal that we have not yet seen the full impact of the middle east problems and that energy supplies will be tight for at least a few years. But seriously, who can really predict anything geopolitical these days?

In any case, if this is correct, would you be inclined to dump big energy consumers (e.g. NTR - which you like, and I own) in favour of energy producers? If so, would you go with oil & gas or renewables? Large caps or smaller caps? Suggestioned names most welcome!