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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: I am thinking of investing in VXC (or maybe XAW) in my RRSP. I understand that since this is a fund of funds and some of the underlying ETFs are US based, that there will be foreign withholding tax of some amount. To avoid the tax, am I better off to invest in the underlying ETFs (Canadian versions only) specifically VFV, VIU and VEE? (small cap I could not find). How much of an issue is the foreign withholding tax? Is it small enough to not bother buying all these underlying ETFs directly? Your thoughts please.
Read Answer Asked by David on May 28, 2021
Q: This is an excellent response to Charles’ question asked on May 27 about what to do when stocks are down 50%:

Diversification and position sizing are two items that can help mitigate this 'pain' so the drawdowns do not hurt as much. Otherwise, the best answer we think is just understanding what one owns both on the stock (what type volaitlity might we expect) and on the company (does the short-term volatility 'matter' vs long-term). The optimal answer can only be known in hindsight unfortunately. While we typically don't like averaging down in names, [once drawdowns like this pass and settle down, it can be an opportunity to add to a position once/if momentum starts to work in a company's favour again]. We not generally like stops either. Good companies, over 15 years, might have 7 or more very large drawdowns that might get stopped out (my emphasis added).

My question: how do we know when momentum is starting to work in favour again? A few days of share price increase with more volume? What I generally do is ask has anything fundamental to co changed. If not, and based on the fact that I was prepared to buy at a higher price, I simply buy more understanding risks and do not try to time the market, which can drive one crazy. I do though want to understand more about what generally signals a turn for the better.
Read Answer Asked by James on May 28, 2021
Q: What would you do - if a stock you own is rising rapidly (50% or more) with no explanation in the short term what would you do?
Clayton
Read Answer Asked by Clayton on May 28, 2021
Q: Do you have a preference between selling naked and covered calls? Also, is selling naked calls permitted in a registered account?

Thanks.
Read Answer Asked by Alan on May 28, 2021
Q: At the end of the day yesterday (Thursday) there was large volume trades - is there any news to go along with the volumes of shares trading hands? I assume is was not retail traders.
Clayton
Read Answer Asked by Clayton on May 28, 2021
Q: As an older senior, I own CDZ for dividends. Would ZWC be a better option?
thanks
Read Answer Asked by M.S. on May 28, 2021
Q: Hello 5i Team
Using Nine Point Energy Fund as an example, when the company has three versions of a mutual fund (Series A, Series F and an ETF) how are the portfolios structured? Are the funds structured as three separate accounts (i.e. the portfolio manager purchases the same security in three separate accounts) or are the funds held in one common account (i.e. the portfolio manager purchases the a security in one account) and the returns/expenses calculated as proportional amounts?
Does either method have an impact on fees or the liquidity (using the example where the EFT version is smaller in value than the Series A or Series F) of the funds?
Thank you
Read Answer Asked by Stephen on May 28, 2021
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