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Investment Q&A

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Q: During the Spring I liquidated my CDN Equity portfolio. I wanted to move away from managing indidual positions and move to a more passive approach. Then I read Ryan's excellent article, Why it's almost impossible to be a passive investor in Canada. I looked at HEW; but it is very small with only about $12m invested. Are there other ETFs that do an equal weight S&P 60? I also am considering VCN and CDZ. I also looked at Two mutual funds, Mawer Canadian Equity and Lester CDN Equity Fund. There are High Conviction funds available; but with very high MER's.
Would you please recommend a portfolio structure that would meet my needs, I am a conservative senior. Please have the suggestions add to 100%.
Thanks Guys for keeping us thinking outside the box.
Read Answer Asked by Warren on July 20, 2017
Q: Can you give your thoughts on CDZ in light of the following Globe commentary (similar to other blurbs I've seen in the Globe):

"And another thing: The way some dividend ETFs weight their individual constituents is a bit nuts. Take the iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ). Choosing stocks that have raised their dividends regularly, as this ETF does, is a great strategy, but assigning the largest weightings to stocks with the highest yields is a problem. Why? Because a high yield is often a sign of a struggling company whose dividend is unsustainable.

Case in point: At the end of April, CDZ’s largest holding was Aimia (AIM), which at the time yielded 8.8 per cent. But the loyalty plan operator’s shares collapsed in May after Air Canada said it would be parting ways with Aeroplan, and Aimia recently suspended all dividends. CDZ’s top holding now? Corus Entertainment (CJR.B), another struggling company that yields about 8.7 per cent and hasn’t raised its dividend since January, 2015."

https://www.theglobeandmail.com/globe-investor/investor-education/im-still-waiting-for-the-perfect-dividend-etf/article35453106/

Would you recommend a switch to a different ETF for broad-based Cdn exposure in an RRSP? What alternatives do you like that are not over-exposed to financials/materials?
Read Answer Asked by Chris on July 14, 2017
Q: In order to avoid individual stock risk, my wife (retired) has asked my opinion on investing 30% of her total portfolio in 10% each of Canada, Europe, and the U.S. (The remaining 70% is composed of 5-year laddered GIC's) I have suggested the following... Canada would be broken down into ZWC and CDZ (on a 40/60 split), Europe would be broadly broken down into ZWE and XIN (40/60 split), and the U.S. would be broken down into ZWH and CUD (40/60 split). What do you think of this strategy? Would you recommend different ETF's to balance the covered calls for the three geographic areas? Thanks!
Read Answer Asked by Paul W on June 02, 2017
Q: Can you provide some data points around dividend "growers" companies and if not available dividend companies in general. Current P/E forward looking vs. historic average and ranges. Just wanting to get an idea on how much higher than the average these stocks are currently compared to historic levels, how overvalued they "may" be to help assess downside risk. Thanks!
Read Answer Asked by Husseinali on May 31, 2017
Q: Hallo I5, is there a tax advantage between dfn, df and zwu, would you please rate or rank them from safety point of view. Perhaps suggesting a couple better ones. I do not have any India holding. Would you consider either of the above safe with reasonable MER, perhaps a suggesting a couple better ones. Many thanks, J.A.P. Burlington
Read Answer Asked by Joseph on May 08, 2017
Q: My Father has finally caught on that paying the RBC +2% for their mutual funds is eroding his returns and asked for some help. He doesn't have the knowledge or temperament to jump into stocks so I am suggesting he move some investments to ETFs. He is 70, has a teachers pension and 250k of RSP "fun money" to play with. Since I view his pension as his fixed income portion of his portfolio I dont see any reason to get him into any fixed income ETFs or match your model ETF portfolio. I plan to suggest he move about 25k each into xwd, cdz and vgg for a start to get his feet wet. Then once he is comfortable move the rest into those same 3 funds ( assuming they are still on your suggested list at that time).

Any recommended adjustments to this approach in terms of ETFs or my equal weighting.
Read Answer Asked by Tom on March 15, 2017
Q: Hi 5i, I'm moving money from my broker (40+ stocks, 500K) to a few ETFs (Equal Weight) , I'm considering the following ETFs: XIC, IWO, CDZ, SPY, FDN, and FIE; would you please help me choose four or five ETFs from the list, I'm looking for moderate growth, and of course preservation if capital.
Thanks
Read Answer Asked by Fernando on March 15, 2017
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