Investment Q&A

Q: I seek clarification please to your response dated July 29, 2021 about converting my father’s RRSP to a RRIF. You wrote:

“ #1 Essentially, yes. The tax liability is the same, but the benefit comes from more money in the account left to compound (as less $$ comes out initially).”

However , if securities are left to compound, once funds are withdrawn, the additional capital gains accrued would be taxed in full. But if the capital gains are accrued in a taxable account, only half of such gains would be taxable ( and only 50% of capital losses would be allowed). Is this correct? If yes, the advantage you mentioned of funds left to compound in the RRIF needs to be offset by the fact that incremental net capital gains in the RRIF are fully taxed on withdrawal (or death). Is this not likely to offset the advantage you mentioned? Is it also correct that dividends on a Canadian company do not get the benefit of the dividend tax credit if held in any registered account, including a RRIF?

I apologize if my understanding of your July 29 response is flawed. I trust you will understand why I seek clarification before I make an error on a parent’s savings. Thank you so much.

Q: After reviewing your response to my question on Porsche, I also looked up VW. I understand VW is expected soon to become the world’s largest maker of EVs. I then stumbled into the ETF "CARZ First Trust NASDAQ Global Auto Index Fund" (not in your data base). CARZ includes Japanese, German, and American automakers ( unfortunately not not parts and other suppliers).

I am light on industrials. Would CARZ be an attractive addition? If capital would be better used elsewhere, I would appreciate your alternate suggestions very much.

Q: Morgan Stanley just issued a warning that the “commodity-type” semiconductor companies (DRAM and other) have entered late-cycle. MS adds that earnings going forward for such companies will be challenged. I hold more than a full allocation in semis once I include semiconductor securities held directly.

My question is on SOXX which is held in a taxable account. What components in, and what percent of, SOXX would be considered DRAM and other commodity-type companies? Would I be correct in thinking if the percentage of the said commodity-type companies is higher than 15% , it would be best to trim? (I would not be trimming securities that are held directly).

Q: Hi

i have couple reds ( Xbc - 54%, REAL -46%, BBTV - 30%, ABCL - 25%, GUD - 16%, EGLX - 12%, MX - 11%, SYZ - 10% ) in registered account. Looking for your opinion whether to sell/hold/buy or replace with some other stocks in same sectors or any good replacement you think based on valuation irrespective of sector.

Thanks
sk

Q: EWY iShares MSCI South Korea ETF seems to be losing much ground in the last month. I am wondering if I missed something significant on her economy or the related geopolitics. Would you care to comment on what is going on that affects EWY much more adversely than SPY:US. It does not appear that exchange rate was part of the reason, but I may have miscalculated Forex.

EWY has a heavy concentration in Samsung and Samsung-related entities, companies that one would likely be happy to own— or would you disagree? Would this be a good time to add? If yes , would you add to EWY or buy FLKR instead (and why please). Thanks.

Q: Hi Guys
Fortuna had a great Quarter, what's with the movement down in the stock ?, possibly due to a poor outlook for the price of Silver ?
Thanks gord

Q: I hold ECN and ECN.PR.A in a registered account. After reading recent comments I am considering selling the preferred shares to buy more of the common. Would you endorse this move? I also have a small preferred position in a taxable account with a 55% gain. I expect you would advise holding in this case. Is that correct? Thanks as always for your exceptional service.

Q: In a previous question (Asked by Bonnie on August 05, 2021) you ranked BAMR over BAM.A as "best for growth". In the recent Brookfield letter to share holders (on page 2) it says:

"As a reminder, Brookfield Reinsurance is a paired security with BAM, meaning that it is designed to trade in
tandem with the share price of BAM, while providing investors an alternative way to own BAM shares"

Does this not mean (in theory at least) that the same return should be expected from both or am I missing something here? Do you see an advantage to one over the other?

Thanks!

Q: Hello Team,
Visa has come down a bit in last few weeks. Could you tell us why? and Do you think this is a good time to add?
Thanks!

Q: I have a non-registered stock portfolio of about $150k that I am managing. I have 10 US Stocks and 10 Cdn. How many stocks would you say would be desirable for a portfolio of this $ size. If purchasing a new stock - what would you say is a good $ range when buying into a new stock given the size of the portfolio?

Q: Hello Team

My wife and I have approximately $ 50 000 cash in her TFSA account (shared money). With myself being a new investor and the authorized trader, I am looking for guidance in terms of what companies to invest in (Canadian stocks). How many companies would you include? How much to invest in each company? Also, would you kindly suggest a time frame to put the money to work . (ie) invest in one lump sump, over a period of four months, invest a portion and wait? Time frame as to when the money would be required is over 10 years.

On the flip side if I wanted to invest the same amount of money and use some of the profits to purchase a car, would you recommend the same companies or different ones?

All ideas are greatly appreciated.

Thank you

Q: May I have your opinion on selling a position in CAE(up 39%since purchase) and either starting a new position in ATA or adding to a 1% initial position in either ATZ or BYD? No tax consequences as CAE, ATZ & BYD are all held in TFSAs. We are retired seniors happy to hold higher risk growth/momentum stocks in our TFSAs. Thank you for your input, with your usual disclaimers.
JaneN

Q: Hi 5i!

Many thanks for all your good work. Can you comment Trulieve earnings?

It looked like a nice beat, why do you think it droped on earnings day?

Also, how is the valuation compared to Curaleaf?

Many thanks

Q: At this time, are you recommending holding TOI? It is up quite a bit - wondering whether there is still runway or whether it is sell time. Thanks!

Q: After hearing the conference call do you have any further comments on WELL.

Q: In your answer to Colin's questions about ECN on Aug 12th, your answer included this statement - "The sold division was the fastest growing, by far".

I had a look at the quarterly financials just released on Sedar, and in the notes to the financials there is the segmented information, and in there it shows the current Q2 and last year's Q2. The revenue for the sold division was up by 42.9% year over year, and for the 2 remaining divisions, Triad had revenue growth of 72.5% and KG had 30.6% growth. It looks to me like there is excellent growth in the 2 remaining divisions. Am I missing something?

It seems to me there is a very substantial, rapidly growing business remaining after the sale of the Home Improvement Loans division, and in the BNN interview with Steve Hudson he was very optimistic about the future growth of the 2 remaining divisions.

Q: Would like to create a 10-15 stock portfolio out the securities listed above, to meet my retirement income and growth needs, for a long term hold.
CPD is my current, imperfect proxy for the fixed income portion of my portfolio.
CVE, CNQ, SU would be the only opportunistic (and highly correlated) purchases, to take advantage of the current low valuations for the petroleum industry. These would be sold if the oil & gas market's prospects change.
Please rank all the securities on the basis of return potential over 2-3 years as the primary criteria,
Please eliminate any stock which does not have adequate balance sheet strength, from the lineup.
Please add to the lineup all securites that would facilitate the creation of a defensible, well-diversified, long term portfolio - especially if it is in a sector that I have overlooked.

Thank you for your expertise, and willingness to help me sleep a bit more soundly.

Q: Would you recommend to buy Ko(coca cola) or a different beverage company?

Q: I bought this late 2018 when working with a Nesbitt Burns advisor. I have been very happy with the 2019 and 2020 results (gains of 44.68% and 92% respectively in those years). Fund focus and holdings seems to have changed this year and I am not impressed. Gain of 0.53% year to date. MER is high. Is it time to sell this one in 2 accounts and move on? One is held in RESP with a short horizon now. One is in a non registered account. Do you have replacement suggestions for growth, either equities or ETF.

Q: As a proxy for a tax loss sale on PAAS what would be your three top choices today.