Investment Q&A

Q: In a recent market update you stated that the markets were approaching or beginning to appear a little frothy!!

Given that the markets have continued to reach all time highs (albeit earnings have been very good) do you continue to view the market as somewhat frothy or full on frothy??

How would you position your holdings going into a potentially frothy market?

Thank you
Tim

Q: Just want to confirm my understanding of attribution rules on these points below:
1. If a grandparent gifts $5,000 to an adult grandchild (over age 18) to be used for investing purposes, there is no attribution rules applicable.

2. But no such luck, if gifting funds to a spouse or to a minor child under 18, where the funds are being used for investing. Attribution rules will apply.

3. If a spouse puts the gifted funds in a TFSA, how will CRA be able to track attribution back to the gifter?

Thanks.

Q: Rather than selling a position and buying it back 30 days later, can you double down on a losing position and then sell half 30 days later to capture the loss? I considered options...but sounds like one cannot use options to maintain exposure and still log a capital loss.

Q: Palantir CEO Alex Karp on Monday characterized his company’s performance using a simple rule that has historically boded well for tech stock returns.

Karp said in a release that the company’s score with the “Rule of 40” was a 94%


Rule of 40 says that the sum of the revenue growth rate and the profit margin should be 40% or higher.

Do you use this?

How can an average investor measure & use it?

Can it be used on all stocks [company's]?

Thank you.

Q: Like most people, I am worried about Trump tampering with the fed. That being said, I noticed in a recent article, that the people Trump has in mind for Powell's post tend to look more at forecasting rather than recent data. How much of this is spin and how much is forecasting a legitimate approach for the fed?

Q: Hi, To my understanding regarding tax harvesting, if i sell X stock for a loss , sell Y Stock or ETF for profit to negate the loss and then buy back Y stock or ETF within 30 days period still i will be able to claim loss in my cash account. Please confirm. Thanks

Q: Hubby and I are getting close to retirement. Would you be comfortable with your entire portfolio at Questrade? Or WeathSimple? The free trading is really attractive. Or would you suggest having some at a brokerage at one of the big banks, for more security? Thanks.

Q: Hi, I have a general question about portfolio management and overall positioning. I have a pretty good overall diversified portfolio with quality names that are often discussed here, though I don't really hold any names in utilities or materials. I'm early 40's and generally on the growth side of investing. My highest sectors are tech (27%), Financials (19%), Industrials (14%), Cyclicals (9%) and Energy (8%). My lowest sectors are Staples (5%), Health care (5%), and Communications (4%). Crypto is at 4%. REITS zero as my house is paid off.

How often should we re-position sector allocation in a year for our portfolio? Is it once or twice a year? Quarterly? I'm not talking about big sector changes but small adjustments such as trimming tech and adding to other sectors. Some of these market rotations happen quickly in the market. Its not a question of IF a correction will happen, but more WHEN and how to be prepared for it. What is the best way to capture upside vs downside protection? What are some key metrics to look at in our individual names? Gains have been good the last few years and I've been around to experience many crashes over the last 25 years since University and have learned a lot about holding quality long term compounders. Thank you!

Q: With all the tariffs bouncing around, I decided to work another year after starting my CPP and OAS. Although I took 30% tax off both, I still got nailed for taxes because I made too much.
I plan to purchase RRSPs to counter this for next year but I just want to make sure I can still buy RRSPs after 65 years of age. Is that correct?
I realize I'll eventually have to move it all into a RIF by 71.

thanks,

Paul

Q: Hi there, if you had to buy 3 Canadian and 3 US stocks today that you feel have multibagger potential, looking out 5 to 10 years, which stocks would they be? Not looking for names that high a decent chance to go to 0 either however!

Q: Peter's comments about RRSPs and RIFs are from an individual taxpayers prospective. If we look at the design and take a country wide perspective it is much different. If we assume the money put into an RRSP and the tax refund earns a return of x% and we can assume the money goes in a Y% tax rate and is taken out of the RRSP/RIF at a Z% tax rate, the end result is that the money is the RRSP/RIF is totally tax FREE as the tax is balanced by the earnings on the tax refund. It does not matter what X, Y and Z are. Note that this is looking at the country as a whole. Some will earn more X and some less but the average of the whole country will be X and the average tax rates will be Y and Z and some will chose to spend their tax refund but eventually the money will end up with someone who invests it. So the entire RRSP program is essentially tax free money for the economy over the programs' life. I've done the numbers back and forth and it always turns out the same way. So if you save the tax refund, invest it, pay tax on it, it will eventually pay the tax on your RRSP withdrawals, "on average".

Q: Hi 5i,
I've just read Thomas's question regarding taxation on RRIF's. He has absolutely identified a serious issue affecting taxpayers and estate planning, which I see often in dealing with estates through my work.
The tax deferment we receive by contributing to RRSP's pays the government off in spades when the day comes that the resulting RRIF (or the RRSP if no RRIF has yet been created) is taxed.
If a spouse dies and his/her spouse is beneficiary of the deceased's RRSP or RRIF there are no tax consequences - a spousal rollover applies, and taxes continue to be deferred. However, when the surviving spouse (legal or common law) dies, the entirety of the RRIF in that person's hands is taxed as income of that deceased person in their year of death. I have seen many cases where the RRIF of a surviving spouse is made up of both his /hers and that of the deceased spouse and is worth in excess of $5M. That is a whole lot of income for an estate to pay tax on at one time. (Because investments held in a RRIF are considered income at the time of death they are not taxed based on capital gain, which would result in less tax being owed - their value at death is deemed to be income.)
I don't believe there is any way around this costly trap except to control taxes while living by taking considerable money out of a large RRIF every year and paying tax on it in affordable chunks. Other than that, surviving children are going to bear the brunt of the tax liability when the estate of their last to die parent pays income tax on whatever is left in the RRIF at the time of death.
If any of your readers have other strategies for reducing tax on large RRIF's I'd sure like to hear them.
Peter

Q: With rich valuations in the market and inflation poised to move higher on tariff deals, what would be your asset mix to preserve capital while seeking a modest total return of around 4%?

Q: When I look at what the insiders are doing on a company which is available on some sites, with the stocks they hold, I see:

Sell post exercise?
Exercise?
Sell;
Award?

Which of these should be concerning? Could you please explain the terminology of the ones above with a question mark.
Thank you.

Q: Hi 5i Team - With gold up substantially the past year or so and now that gold stocks seem to be participating more, I am interested in taking a small position in a few junior exploration companies. I already have two mid tier producers. Are there any exploration companies that that you may be aware of that have reasonable funding and potential for decent discoveries. Past successes of management would also help. Or is there a reputable site or publication that might cover this sort of thing. Thanks.

Q: I was on forums looking at a question about parking US cash. The discussion was between Rob and Jeff dated Feb. 4, 2025. It seemed from my understanding that you can have T Bills that pay about the best rates and at that time it was 5% plus. I have accounts online both US and Canadian. Are these US online accounts set up to buy T Bills like I buy a stock? Thanks so much.

Q: Good morning, In a recent question I inquired about brokers that held U.S. stocks in U.S. funds in a RRIF accounts . I asked this question, as much to my surprise Wealthsimple does not hold U.S. stocks in U.S. funds in a RRIF account. They are held in CAD. I am looking at Qtrade and TD invest for this account. Is there a preference? Open to any ideas. Thank you.

Q: Only Canadian dividend stocks own in non-register account qualify for the Dividend Tax Credit? Am I correct?

Q: Can you please give me your Top 15 dividend stocks that qualify for dividend tax credit.

If possible at least one in each sector

Thanks for your great service

Q: When can we expect the next investing and economic report card and if there was a recent one ,where can we find it?