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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: Hi Peter,



Firstly, thank you for your service. It is much appreciated and quite the bargain.



I was looking at your model portfolio and noticed that 17 of the 20 stocks pay dividends. However, 10 of the 20 the stocks either pay no dividend or pay one below 2.5% per annum.

You may have seen in the papers that an interesting tax planning opportunity(making 1% loans to spouses and family members) is coming to an end after September 30th. The idea behind the planning is to avoid the attribution rules and get income into the hands of related taxpayers who have a lower marginal tax rate then the person making the loan. To do so, the investements made by the family member(or the trust of which they are a beneficiary) must earn more than the 1% charged by the person loaning the funds as it is the spread between the return earned on the borrowed funds and the 1% interest paid that gets taxed in the hands of the family member/trust. Clearly, the higher the dividend yield the better so long as there is limited risk to the loaned capital.

Without wanting to impose an undue burden upon you, can you share 20-25 names of companies that would be appropriate for this planning. i.e. ones that have a good safe dividend while having growth potential? I assume that the 10 companies from your model portfolio which pay 2.5% or more are suitable choices. Can you provide an alternate model portfolio for this income splitting planning that expires in about a month?

Regards,

Philip

Read Answer Asked by Philip on August 29, 2013
Q: I have been holding Legumex Walker for quite some time (at a much higher price than today)and was wondering what your thoughts are on this company. Still waiting for some earnings from the Canola crushing plant. At around $3, is it a good buy and worth holding for the long term. Is there some other company in this sector that would be a better opportunity? Thanks again for the great service and I will be renewing shortly.
Read Answer Asked by Rudy on August 29, 2013
Q: What effect if any do you think today's announcement will have on the effected securities (I own only BIP.UN of the securites mentioned):

Thursday, August 29, 2013

S&P Dow Jones Indices Announces Changes to the S&P/TSX Canadian Indices
17:15 EDT Thursday, August 29, 2013
A Refinement of the Definition of Domicile of a Company

TORONTO, Aug. 29, 2013 /CNW/ - S&P Dow Jones Canadian Index Services will make the following changes in the S&P/TSX Canadian Indices:

Following extensive consultation with the community of index users in Canada, S&P Dow Jones announces that changes have been made in the methodology of the S&P/TSX Canadian indices that refine the definition of what constitutes a Canadian company for index eligibility purposes. As a result, effective immediately, the following companies are now deemed eligible for consideration for inclusion in S&P/TSX indices. For further detailed information about the specifics of the change, please refer to the methodology documents online at www.spindices.com.

BIP.UN - Brookfield Infrastructure Partners LP
BPY.UN - Brookfield Property Partners LP
BEP.UN - Brookfield Renewable Energy Partners LP
EDV - Endeavour Mining Corporation
CNL - Continental Gold Limited
GTE - Gran Tierra Energy Inc.
TPL - Tethys Petroleum Limited

Read Answer Asked by John on August 29, 2013
Q: CSS Contrans and investing rules and disciplines:
Having hung on to too many stocks over the years as they dropped 10% or more under the "buy" price, I am working on my "sell" disciplines.
I am now down 10% on CSS. Does one hit the sell button, hang on and "hope" or carefully watch for further decreases and buy more?

Thanks for your help and guidance in this tricky market.
Read Answer Asked by Donald on August 29, 2013
Q: hi folks,smart tech sma/t recently announced Ian McKinnon was named to Board,also on Board of Constellation software,is this significant or non event. Have small position in Smart and hope company turned corner after last Q,thanks for info,jb
Read Answer Asked by John on August 29, 2013
Q: Hi 5i I have a small holding in FLY (FLYHT) . August numbers looked ok and the stock went up 30%. I am thinking of adding to my holding. Have you looked at this stock and what would your recommendation be. Tks.
Read Answer Asked by andrew on August 29, 2013
Q: Hello
Your opinion please on First Nickel Inc. (FNI)
thanks
Sam
Read Answer Asked by Sam on August 29, 2013
Q: further to my tax loss question, is there a special form that I should fill out to record this so that when I hand everything over to the accountant he/she will have the necessary info
Read Answer Asked by john on August 29, 2013
Q: Hi 5i,

What are your thoughts on Patient Home Monitoring (PHM-T)? I realize the market cap of PHM is still quite small, but i have been impressed with the recent insider buying and the fact that they are turning cash flow +ve.
Read Answer Asked by Sasha on August 29, 2013
Q: does tax loss selling only apply if done when the calendar rolls over i.e. 2013-14, or can I sell something now ((Aug 29, 2013) and buy it back a month from now (Oct 2, 2013)and use that loss against potential taxes? This way I could get the tax loss and buy back in while the stock is in the duldrums (RPL)
Read Answer Asked by john on August 29, 2013
Q: Good Morning Team. I have a question on Mr. Market. I own Silver Wheaton @ $35 and have ridden it all the way down. Lately my patience has been rewarded and I was getting excited. Monday it hit about $30.60 interday then proceeded to drop about 12% by close Wednesday. This in light of Syria, a bull market in silver and silver equities, and a generally frightening outlook for the US and global financial systems. I don't get it. Who is selling? Why? Is the system just rigged to screw the little guy like me. Makes zero sense!
Read Answer Asked by Robert on August 29, 2013
Q: Hi Peter and Team, regarding Novus, NVS, is it normal for the stock to be halted this long? Based on your experience, your thoughts on why they don't let the stock trade would be interesting. Clearly they must be in negotiations but why not clarify with any material information and let the stock trade again? Also, for those members interested in NVS there was an interesting blurb yesterday on BNN, The Close, by Andrew McCreath with Michael Hainsworth. Thanks!
Read Answer Asked by Hussein on August 29, 2013
Q: CGI Group (GIB.A) has recently had its accounting questioned by Veritias research of Toronto. According to a recent article in the Globe and Mail the analysts there are of the opinion that the recent logica acquistion in the UK is being used imaginatively by the accountants at CGI to artificially inflate future earnings at the company. Nothing illegal is suggested but its rather dubious if true. Any comments?
Read Answer Asked by Andrew on August 29, 2013
Q: Hi Peter,
I have a question about FCR. I increased my position in early Aug and it is now about 5% of my portfolio. I also own HR.UN, CUF.UN, and AX.UN, approx. 5% portfolio each. These stocks continue to slide, so I'd like to ask you whether you recommend to hold, sell and cut losses, or buy more for either of these? I am looking for long term growth/income rather than immediate one. Thanks a lot!
Read Answer Asked by Michael on August 29, 2013
Q: Hello Gentlemen; I have taken a small position in CLQ. I am wondering how you feel about the risk/reward of this investment or if there is another vehicle you would consider more promising. Thanks, DON
Read Answer Asked by Donald on August 29, 2013
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