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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: 1) Even Stephen Poloz, Governor of the Bank of Canada, has set aside the issue of NAFTA claiming there remains uncertainty until he knows more about the nature of the risk, he will not focus of that topic. The much greater risk to Canada will be the US Tax Reform. Will Canadians also shift business to the States because it will save 50% in taxes. So, the tax reform is a far bigger issue than NAFTA. How would a Canadian company's move to the US affect me as a shareholder?

2) It appears the flight from income taxed states, especially California, to Texas and Florida particularly, will continue. Seven U.S. states currently don’t have an income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Residents of New Hampshire and Tennessee also, though they may pay tax on dividends and income from investments. I understand that four states, Minnesota, Alaska, Connecticut, and New Jersey, and the District of Columbia levy corporate income tax rates of 9% or higher. These are the States that may see the withdraw of many corporate headquarters. Six states, North Carolina, North Dakota, Colorado, Mississippi, South Carolina, and Utah, have top rates at or below 5%. Is there any benefit long term to investing in companies headquartered in non taxed States?
Read Answer Asked by LARRY on December 29, 2017
Q: Hello Team,

I know you guys don't advise on tax questions but as simple as this one is no one seems to give me a straightforward answer. So, I hope you can help. Which of the following is right regarding RRSP contribution year for 2017:
1- 01 January 2017 to 28 February 2018 (14 months)
2- 01 March 2017 to 28 February 2018 (12 months)

According to an HR Block agent, it is option 1. According to a CRA agent it is option 2. I appreciate it if you are able to support your answer with a website reference from CRA?

Merry Christmas and Happy 2018!
Read Answer Asked by Saeed on December 27, 2017
Q: First of all Merry Christmas and Happy New Year to the 5i team and all my fellow subscribers.

My question relates to where should I invest (RRSP vs TFSA vs Non Registered).

I am 53 yrs old and plan to retire in the next 12 yrs. My current investment portfolio is virtually 100% in RRSPs. My goal is to build a strong dividend portfolio of Canadian stocks coupled with an International and Bond ETF. My question is where should I keep my investments? RRSP? TFSA? or Non Registered?

I am entering my peak earning years and feel that I can retire comfortably on approx. 70% of my current income. I see potential benefits in all 3 but not sure where I should keep my investments. I will likely be at a lower tax rate than I am now than when I am ready to withdrawal from my RRSP. However, who knows what will happen with tax rates. As well, income from my RRSP (but not my TFSA) would impact my OAS clawback.

Any suggestions would be greatly appreciated.
Read Answer Asked by Nick on December 27, 2017
Q: Peter and His Wonder Team
How are annual portfolio returns calculated? I thought I knew but now am not sure. I thought Dec 31 was the date that everyone did there mathematics...measuring the difference that occurred during that year. Are there other ways? For example can you just use any day during the year that your portfolio hit its high and use that number? In other words is there accounting consistency between the financial institutions and retail investors or is there a little manipulation for marketing purposes? Thanks for the clarification.
Dr.Ernest Rivait
Read Answer Asked by Ernest on December 22, 2017
Q: Hi,
I have many of my stocks enlisted in DRIP. I am a long term investor and don't need to draw on any of the dividends right now and have a well diversified portfolio. What types of stocks would be ideal or better to enlist as DRIP? Growth stocks don't really pay dividends so we can probably ignore those. Comparing stocks such as AQN, GSY, SIS, ECI, SGY, etc..how would you rank them for DRIP or would they all be fine?? I have many stocks that pay decent dividends but I'm trying not to continue to drip in losing stocks where I can invest those dividends elsewhere.

Thanks, Merry Christmas and Happy Holidays!!
Read Answer Asked by Keith on December 22, 2017
Q: Hi 5i,

I'm a younger guy (mid 30s) who's fortunate enough to have saved hard and basically paid off my primary residence. I'm now looking to redeploy that equity through a credit line, which comes at a cost of prime + 0.5%. Our TFSAs are maxed (aligned with model BE/growth portfolios) and RRSP contributions are healthy, so I'm comfortable with our total equity exposure, but I would like a low-risk income-oriented holding in a new non-registered account that yields enough after tax to offset the cost of capital on the credit segment. Is there anything that comes to mind? Maybe a series of Prefs (neutralizes rate risk assiciated with this strategy) with a few high-yielding equities to bump up the overall yield?

Thanks for your help!
Read Answer Asked by Michael on December 21, 2017
Q: If we are to believe that history is our best teacher, what in your opinion, were the major factors that contributed to the Dow Jones Sell off in Aug 2015 and Jan 2016? Was it mainly global financial events re Greece and China? What are the best tools to monitor the events that could lead to a similar correction? Thanks for your wisdom. Use as many credits as required, as I have 143 left. :)
Read Answer Asked by Allan on December 21, 2017
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