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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: My Consumer-Cyclical sector is 6% too high and Technology sector is 2% too low.

So need to sell one of (AW.UN, BPF.UN, BYD.UN, CCL.B, CGX, ECI), each with ~ 2% position. Hard to sell any of these tried-true 'favourites' -but trying to take the emotional side out of the decision, and be disciplined. So, I think I should sell CGX because it has been flat for 2 years and I don't expect much upside. Can you provide your an order of selling preference?

And I need to add to these existing Technology Sector holdings (CSU, ENGH, KXS, MDA, PUR, SHOP). Thinking (OTEX, ITC) or more of existing ones.

57 year-old with a Growth & Sector & Dividend oriented portfolio.

As always, thank you for your wise guidance.

CSU, CCL, MDA, ECI, ENGH, BYD, OTEX, SHOP, AW, BPF, PUR, ITC
Read Answer Asked by J Carl on February 27, 2017
Q: I read on the FAQ's of an ETF Website the following question:
"Are an ETF's Assets Under Management and Trading Volume good indicators of liquidity".
The answer they gave was: "No. The most important aspect related to the liquidity of any ETF is that while the liquidity of the ETF itself (the ETF’s own trading volume on the exchange) may be deemed poor or limited, the key gauge of that ETF’s liquidity is the liquidity of its underlying exposure.
With the mechanism of creation and redemption of ETFs, a designated broker (DB) is responsible for ensuring that market prices track the ETFs’ net asset value (NAVs). If the underlying securities can be easily bought and sold, a tight fit between price and NAV is easily maintained.
Hence, an ETF with small AUM and little trading volume can still be highly liquid if its underlying basket of securities is liquid."
Is this essentially correct, and if it is I'm still not sure how this would work? I have avoided many ETF's for what appears to be poor liquidity and trading volume. If I want to sell an ETF and level 2 quotes show a large spread to sell for example 1000 shares, will additional shares in the ETF somehow be created to get a fair market price based on the underlying stocks held in that ETF if I put a Sell order in on what appears to be a low volume ETF? What I am getting at basically is - is there any way of knowing what the price spread will be on the sale if additional ETF units that are created "on the fly" by the DB? I may not be interpreting the answer given above so please try to expand and clarify their explanation.
Thank you.
Read Answer Asked by Alan on February 27, 2017
Q: I subscribe to StockCharts.com Do you know of any similar type of charting service or website where it is possible to chart Canadian MARKET CAPITALIZATION changes over time?

Thanks for what you are doing in the small cap niche. Interesting too how trading volumes react as various market cap thresholds are achieved.

I know you mentioned on one of your previous webcasts but could you indicate again what market cap value thresholds are significant when it comes to potential formal institutional coverage as well as fund purchase eligibility.
Read Answer Asked by Richard on February 27, 2017
Q: On Friday there was a question to the effect of is EMP.A about to turn around. I live in a Vancouver suburb and the Safeway store anchors a small neighbourhood mall which became a no go zone for many in the community after Empire took over the operations. I sit on a local community board and we were concerned because the usual patrons had given up - shelves not stocked, disorganized displays, poorly trained staff etc etc. However, very recently things have markedly improved. My wife, who had given up on the store, came home yesterday and said it was the first time ever thatthe parking lot was full. I go in occasionally and it is better, in fact it is now a better operation than under Safeway. I would say it is a good time to look at the stock.
Phil
Read Answer Asked by thomas philip on February 27, 2017
Q: MDA has dropped a lot in the last few days due to a takeover that has not been well received by the market. Is it time to sell MDA and move on, or is the drop overblown and time to add to an existing position?

Although much much smaller than MDA, what is your opinion of MAL as an investment in the aero and defence sector.
Read Answer Asked by David on February 27, 2017
Q: Peter, can you kindly suggest five investments that typically pay no dividend or other distribution (tax minimization). This would ideally be for a 5-10 year+ holding. My risk tolerance is medium-to-high (but just short of 'stupid'). If one or two of these suggestions were US companies (other than Alphabet; already owned), that would be fine. Thanks as always!
Read Answer Asked by James on February 27, 2017
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