Investment Q&A

Q: Hi Peter, Ryan, and 5i Team,

Peter, with your experience in markets such as the situation we're now in:

Is dollar-cost-averaging over the next year or so a good way to accumulate some good but beaten-down companies?

Can you recommend several Canadian and US ETFs that I can use to take advantage of this dollar-cost-averaging approach?

Finally, since one cannot predict the market bottom with any certainty, what frequency would you add to one's position (weekly, monthly, or ??)

Thanks in advance for your insight.

Q: In question you responded to today, the information in the questions was not correct. According to NRGI website, this in the correct information
Geographic Allocation as of 08/31/2022
Sector Weight
Canada 83.04
United States 9.32

Q: Hi...further to my recent questions regarding Eric's NRGI ETF, I just want to make sure I understand the tax treatment of this ETF before I purchase it.

According to his website, NRGI is 82% USA and 18% Cdn as of Aug 31/22.

Please correct me if I am wrong:
1. Any share price appreciation will obviously be taxed as Canadian capital gains.
2. Any dividends from a Canadian company will be taxed as Canadian dividends and received the dividend tax credit.
3. Any dividends from a USA company will be taxed as interest income.
4. Any "covered call" dividends from either a USA or Canadian company will be treated as Canadian capital gains (not 100% sure on this one).

So, ignore the share price appreciation aspect for now. Eric has stated the target distribution is 7%.

My conclusion is that the distribution could then be split into roughly 5% dividend (82% of which would be taxed as interest income) and 2% covered call (taxed as capital gain).

Q#1 = So, is it safe to say that the ETF would be taxed with roughly 4% being interest income tax, a negligible amount of Canadian dividends, and the vast majority being taxed as capital gains (share price change plus CC-dividend impact)?

Q#2 = So, I believe it still makes sense to buy this in a Cash Account...do you agree?

Thanks for helping me understand this one....Steve

Q: With brisk FED tightening creating havoc in global currency and bond markets, do you see a slowdown in QT and/or rate increases? While delivering a muted effect on inflation itself, FED actions seem poised to tip off other crises in the world's financial system....is BNS at particular risk because of their emerging market exposure?

Q: Please assess the impact of the latest acquisition on long term profit.
Thank you

Q: Hello
I am looking for contact information for anyone who could value old stock certificates. The certificates are from the 1940's. I have done some research on the certificate company's and have gone through various iterations and now are part of Franco Nevada. Thanks

Q: Would you endorse a switch from ROST to NKE?

Appreciate your insight.

Paul F.

Q: We all know Disney the brand and Disney+ their latest (yet to be profitable) venture. Is this a good time to invest or is this a seismic shift in the business and the stock too?

Q: Where do you. think the price for a barrel of oil is headed in 2023? A difficult question but based on your years of experience, I'd appreciate your opinion. Please give a few reasons for your answer.

Q: Would you buy CNQ:CA that's oilier or the gasier TOU:CA Why and when, Thanks

Q: Hello Peter,
Is Xebec, basically bankrupt and no hope of turnaround? The company is in the right space green energy so what in the world happened here? They have signed many contracts .. is it bad management or ? Would your advice be to sell the moment it is no longer halted or do you think there is chance here of an upswing? This was a favourite on market call. Are the managers who come on do not really understand companies when they recommend it as this is happening at times when looking at other companies such concordia health etc

Q: Enbridge is the only pipeline stock that I currently own. I am looking to buy more. Before I do, do you think the TC Energy involvement in the Kitimat LNG project makes it a better investment right now? Would you consider owning both?

Thanks,

Mike

Q: If Russia drops a nuclear bomb in Ukrainian territory ( a scenario becoming more likely every day ), the question of whether a company’s stock has a compelling P/E ratio is irrelevant.

Forget inflation, forget Covid, forget Trump, forget budget deficits, forget supply chain. Follow Russia/ Ukraine.

Please help me to decide not to sell everything, stock up on cans of beans and head for the hills.

Thanks
Derek

Q: Hello
I bought all these stocks believing they were well positioned for the energy revolution. Investors have not been interested in supporting these companies and now we have one of the first to go bankrupt. More to follow as QST has been on the ropes now for five years or more.
Fact is, when the sea if full of escaping methane (pipeline sabotage), who is going to pay a company to collect methane from cow dung?

Any thoughts on.......
What is it going to take from these companies to go broke?
How much more time do they have in public markets?
Any worth the pain of holding through another market crash?

Thanks

Q: Good morning,

I'm aware of the outlook being more income oriented then growth with this company.

Are we nearing over sold here? With this value contraction and a medium term outlook.

Thank you very much.

Q: Could you please comment on its earnings and future prospects. Buy, sell or hold?

Q: I know your standard advice in terrible markets is do nothing, but I think I read you advising another member it might not be a bad idea to sell some names like Google and Amazon and buy them back after a month. Isn't this risky?

Q: Hello
There are Youtube Investment Advisors pushing the theme of income investing. Nothing else matters, just the income. Not taxation nor ETF price action (Capital Value).

Given this ETF Theme of Covered Call Strategy (some leveraged 25%) are paying such a high distribution, in the right set of market events (down excessive period) can this strategy trade itself to zero?

They are certainly not making 15% income from dividends and call writing. So capital erosion must be the outcome in today's market.

I was holding covered call etfs from BMO during Covid crash. The strategy performed worse, even after distributions, than straight equity holdings. It was a terrible experience as there was zero downside protection and the strategy seemed to accentuate the drawdown.

Given the current environment (more downside in my opinion) are these ETFs setting investors up for an ugly awakening? ( distribution cuts, return of capital (One's own money), price decline and slowness to recover when markets come back)

Thoughts

Q: Hello,

Thank you for all the help in these tough times. The advice from this service does help keep a person grounded in dark days. In anticipation of us reaching peak inflation and small caps beginning to turn around can you let me know which of these you would prefer? Both are trading close in stock price but CTS is much larger according to RBC website 1.3B vs 188M. Both are well down from their highs and both seem to still be growing at a good rate. Which in your view looks like the better horse? Or should a person pick both?

Thanks

Q: Hi, Thanks for today's Market/Portfolio Update, specially the explanation of inverse relationship between value of USD (DXY) and risk assets ( S&P 500, TSX and Stocks in general). Do you think, the market bounce on Wednesday, was for no fundamental/technical reasons, but was a reaction to news from UK of BOE market intervention through Bond buying to support the fledgling economy and a one day breather to unstoppable US Dollar ascent ? Based on this thesis, besides other technicals, would it be prudent to keep an eye on USD uptrend breaking down, before entering into new long positions. Mr David Burrows of Barometer Capital was on BNN recommended to stay on the sidelines, until the market downtrend breaks and at least 2 days of Buying with High Volume is confirmed with follow through for 5 days. Their firm has 30% cash ( due to Stop Loss liquidations in Tech/Financial and others sectors). They own only defensives like Energy, Utilities and Telcos with 0% Tech. Does this strategy make sense, in your view, as most of us are almost fully invested presently as well as in past ? That seems to be the case for past several weeks and months - we buy/add to positions and stocks only get cheaper over following days. BTW, stocks with higher yields in sectors like Utilities/Telcos/Pipelines continue to get decimated - even though, bond yields declined over past 2 days - Any comments , please ? Thank You