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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 have a well diversified portfolio in Canada. I have little direct exposure to the US market but I have about $25k in a US cash account right now. I have about a 5 year horizon when I believe I will have to close this account. I am interested in buying some companies or ETFs that are difficult to cover with my Canadian holdings. Could you please name 3 ETFs/Companies for a fairly conservative but not completely risk averse investor to check out.
Thank you for your invaluable help.
Read Answer Asked by Brian on January 23, 2018
Q: Hi Gang,

How accurate would this be, its a clip taken from BNN.

We’ve been keeping a keen eye on the yield curve as it’s the best predictor of an impending recession. While the curve is flattening (short end rising while long end not rising as much) we are but two to three rate rises away from inversion. An inverted yield curve generally leads an actual recession by ~12 months. Based on our calculations we are at least ~18 months away from the next recession.

Thanks
Anthony

Read Answer Asked by Anthony on January 23, 2018
Q: Hi,

Thank you for your valued advice and also fantastic job with the new site as well.

I am looking to diversify my portfolio to the SE Asian market through my TFSA account. I am unfamiliar with investing outside of Canada and am hoping for some advice. In order to alleviate risk, I am looking at the above mentioned 3 ETF's. If you could please provide your input on each of these ETF's it would be appreciated. If you have any alternative suggestions on how to enter SE Asian markets, please let me know. Your input is appreciated.

Thank you,

Paul
Read Answer Asked by Paul on January 23, 2018
Q: I have been watch Conifex for some time and it has been performing quite well. Its PE is under 10, its moving average continues to climb and the stock has almost doubled since July 2017. Conifex's sells to the USA, China, and Japan. It now has operations in bioenergy and started operations of its power generation facility in BC. Price / Book is .8 and they report next month.

How would you rate CFF in light of NAFTA and is this a buy? Can you suggest any other buys in this sector or shall I hold on until NAFTA is resolved one way or another?

Thank you
Read Answer Asked by Martin on January 23, 2018
Q: Good morning 5i,
There has been a lot of discussion lately regarding fixed income. Many, like me I suppose, are beginning to think about "de-risking" their portfolios. I would appreciate your thoughts on this de-risking venture. Would one, for example, be better to put all of their risky money in the stock market and in very save bonds such as like XBB and VAB. That is oppossed to something like PMIF, which may not be de-risking your money at all?
thanks as always
Read Answer Asked by joseph on January 23, 2018
Q: My husband and I hold a very small amount of Chartwell and Telus in our RRSP account. We are approximately 5 - 10 years away from retirement and have a good mix of stocks amongst all the sectors holding only about 15% in fixed income amongst our RRSP and TFSA's combined. Most of our 30 some dividend/growth stocks are ones you've recommended and we tend to be buy and hold investors. My question is when we have a couple of bonds coming due this spring (4%) would you buy more bonds or would you add to Chartwell and Telus? What do you think of Chartwell's high P/E ratio being over 100? We are still contributing to our accounts on a regular basis and could put future contributions towards fixed income if you think we're short in that area.
Read Answer Asked by Lisa on January 23, 2018
Q: Thank you for your answer on my question/comment on ETF.
I had missed to mention why I am uncomfortable with this passive investing trend. The markets over many years has been acustomed to this type of "investment du jour" but there is something special to ETF that I forgot to say and why I think it is important.
ETF are among many other qualities supposed to be providing valuable diversity . You did not provided a comment on my question about what I call the tail wagging the dog. If I am right and I do not know if I am (hence my question), then there is NO diversity about buying an ETF as it will behave like a stock and they will force down or up the undervalued securities.
Te ETF's that I buy have an extremly narrow scope and are more induced to react to the underlying ebb and flow value of the underlying asset they are suppose tyo represent than the other way around.
Your comment on this question (very important for me as one of my major belief is into diversification) will be appreciated and if it is too long or irrelevant, please simply keep it private
Read Answer Asked by claude on January 23, 2018
Q: Hello 5i. Just wondered if you had seen the article on this topic in the Globe & Mail over the weekend. What it suggests is that dividends from US-listed ETFs held in an RRSP account are not subject to US taxes. However, the article states that this is not the case for dividends paid by Canadian-listed ETFs that invest in US stocks. In this case, dividends ARE subject to US withholding taxes, even if the ETF is held in an RRSP account. The article goes on to say that these taxes cannot be recovered. (Same situation would apply to mutual funds.)

Assuming the article got this, I'm not sure that all ETF investors are aware of this nuance.
Read Answer Asked by Thomas on January 23, 2018
Q: Which of these do you think is 'better', in terms of dividend sustainability and overall long-term total return (I know you would prefer VGG/VIG to both)? I like the value tilt of PUD.B (P/E ratio less than that of XDU and broad US market), but it is an expensive ETF, with a MER of 0.67 compared to 0.14 for XDU. Do you think the extra MER is worth it? In a market downturn, of course both will suffer, but do you think PUD.B might perform a bit better? Currently, I hold a bit of both, should I continue to hold both or just pick one (and if one, which one?) This is for a longterm hold. I am comfortable with the relatively small (but growing) assets under management of XDU. Thank you.
Read Answer Asked by Walter on January 23, 2018
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