Investment Q&A

Q: Hello .. I would like your opinion on EARK (Emerge ARK Global Disruptive Innovation ETF) for a long term hold in an already well-diversified portfolio... or are there better options for this theme.? Thanks!

Q: I'm thinking of choosing a managed mutual fund for my exposure to the precious metals sector due to all the risks associated with this sector.
What mutual fund would be your favorite for this volatile sector. It seems reasonable to me to pay an MER for a really good manager, when returns can very a much as 40% some years.
Thanks Gord

Q: Hi 5i
A question about reporting to CRA and Form T1135. I believe that If the "specified foreign property" is over $100,000 and is held inside a RRIF, RRSP or TFSA you do not have to report it on the form, is this correct...?

Q: Hello 5i. I use symbol ^TNX:US to track/monitor the 10 year US T note. Is there an equivalent symbol for the Canadian 10 year note that I can use for on-line access. Many thx. Steve

Q: This question is about covered call strategies. I know that your mission is primarily to gibe advice on individual stocks but you are often good enough to share your knowledge on other points, as well. So, i will submit this question. If it doesn't fit into your framework, that's ok, too.

I know thatyou like to sell covered calls a month out. If i don't have any intention of owning the stock, i imagine that it doesn't really matter if i buy the stock one month, collect the option and then buy the same stock back again a month later at a higher price. Because i am only interested in collecting money on the money i have. Right? ( i am doing thisin a tfsa. I have googled it but haven't found a definitive answer on whether I can do this there? Am i ok with that? ). If i am going month by month is it better to take a lower payout, knowing that you are more likely to have to give up the stock, or go a couple of dollars less in the premium payout in order to have a higher possibility of keeping the stock, realising that this is a monthly process? a number of questions here so please feel free to subtract the appropriate number of points, if you decide to answer.
Thanks again for your grat service

Q: What is your opinion on this new issue

Q: I am seeking to understand why it makes sense for an individual investor to limit the number of equities to about 30, when ETFs have well over 100. Due to age I am considering switching more to ETFs.

Thanks for your great service - much appreciated!!!
Cyril

Q: It appears that the corona virus is continuing to affect the world markets...
I realize that it is still very early in the developing story but what kind of affect did previous health situations have on the U.S. and Canadian market place???
Ed in Montreal

Q: Can you please recommend an Active ETF and Momentum ETF that you would consider buying How often Active and Momentum management change their portfolio.

If possible in Canadian dollar.

Thanks for your great service.

Q: Hedging Strategies- With the recent run up of stocks, what are the suggested preferred options to protect ones portfolio gains from significant market correction to the downside? Selling existing stocks will lead to considerable taxation in my current scenario, with most investments being outside RRSP Accounts. Please provide a few ideas.

Q: When evaluating various US listed ETF's for dividend growth and stability )eg: DGRO, VIG, DGRW, SCHD) is there any value or merit in looking at the p/e ratio of the ETF itself to determine value as another metric before a purchase. Many thx. Steve

Q: Like many CDN Investors, I am overweight Canada. Plan to reduce that in 2020. Looking at candidates I find some "Canadian" investments have the majority of their assets outside the country. Example: BGI.UN - only 20% of assets are in Canada, yet it pays quarterly $CDN income. Seems it would meet my objective. Please provide names of other CDN-based candidates that hold a lot of ex-Canada assets and derive much/most of their income from those. Looking for US/International diversity and some $CDN income. I hold some US Pharma stocks directly and a Vanguard S&P 500 Index ETF (10% of total portfolio). Thank you.
IslandJohn

Q: Can you please recommend a Canadian stock which also trades on a US exchange and pays dividends in US$ ? My idea is to purchase in my tfsa and transfer to a US$ tsfa so I can collect the dividends in US$. Good dividend yield would be nice too! Thank you.

Q: I noticed in one of the questions asked yesterday there was the following disclosure: Authors of this answer have a financial or other interest in AAPL, AMZN, GOOG at the time of answering this question. This seems new any reasons to start including it?

Also as you give us great quality names such as SHOP which is up over 1700% since it is inter listed can you by the US listed shares ? Or is the team not allowed to buy inter-listed companies?

Q: In a TFSA would commission and other fees be considered a withdrawal and therefor could be replaced the following year.

Q: Good morning team
Can you steer me in the direction of some very good articles on Reverse mortgages please? I'm thinking of major upgades/renovations to my home. I spoke to an appraiser and he pointed out to me that if we hit a 10 year ish stretch of decline or no growth in realestate that it could be a very bad idea if I chose to sell??
Thanks for keeping me on track. All is going very well at this juncture.!

Q: Let's suppose Ottawa increases the capital gains inclusion rate, say jan2,2021.
Would that increased rate apply to capital gains prior to Jan 2,2021 or to capital gains from jan2,2021 ?

Q: You noted a couple of days ago that you (almost) always put a limit price in place when buying/selling. The few times that I have done this I find it to be very cumbersome because I then often have to wait or even check back an hour or two later to find out if I was able to purchase the stock at my chosen price. I have even missed out on a purchase because I went in too low. While it is nice to get the lowest price I am a bit confused as to your comments because you often state that it is best to purchase a stock without trying to time it too carefully because in the long run (and I am a long term holder) a few cents here or there isn't going to be material. So when do you suggest we place a limit on the buy - always, only with small caps, only when it is a lightly traded stock or just when the bid-ask is rather large? And if using a limit, how do you know what price to go in at?

Appreciate your insight.

Paul F.

Q: Often one hears an investment advisor (especially those with a long-term buy-and-hold style) say: “if you had bought $10,000 worth of company X in 1990, you would have $1,000,000 (or whatever) now. Yet, these same advisors (and this would include 5i) usually also advocate regular “trimming back” if any one security becomes overweight in a portfolio. But you can’t have it both ways!!—if you are lucky enough to get a 20-bagger, or 40-bagger, or (in my more extreme example above) a 100-bagger, you won’t get the aforementioned immense absolute $$ gain if you constantly trim back the winner(s). My own style typically is to just keep adding new $$ to my other (lower-weight) holdings, and thereby avoid selling my winners: e.g., I’ve had CP, ENB, NA, TRP, CAE, TD, QSR [via predecessors WEN and THI], etc., for >20 years, and have hardly ever sold any shares (and have often regretted those times I did sell a few shares for “trimming” (rebalancing) purposes. The only time I was hurt by not rebalancing was when AIG became 15% of my portfolio, and it subsequently imploded during the 2008-2009 financial crisis. But, otherwise, my general reluctance to sell high-quality securities has paid off. I am curious what comments 5i might have.....

Ted

Q: Hi 5i team,

During the fall, I saw several questions on stock metrics, so I thought I would follow up before earnings season starts again, as I notice differences between business sites, depending on assumptions. I tend to defer to the Companies section as that is what you use in your answers, I believe.

In the Companies data, are the PE ratios and the various Price to Comparisons TTM or forward looking? I use Price to Sales all the time for those tech stocks that do not show any earnings. Would you view around 10X as getting expensive or under which offers relative “value”, if I can use that term for tech stocks? I notice in a recent question, you mentioned LSPD, one of your favourites, but that trades over 30 times. I really don’t use the Price to Cash Flow or Free Cash Flow ratios. They seem to be all over the map, with wide variances, so I have trouble interpreting their significance. Which one do you prefer and what would be a general threshold for getting expensive?

Thanks again for the insight.
Dave