Investment Q&A

Q: Hello,

I am wondering what your thoughts are on the eventual recovery? We won’t know 100% until the virus plays out further but best guess, what do you think a recovery will look like?

My thoughts are that once the virus is under control we may see a quick turnaround in the equities market due to the economies ramping back up, but I am concerned that if this virus continues to provide more questions then answers we may be stuck in a longer downturn.

Keeping the recovery in mind, what are your thoughts on picking away at a Russell 2000 position over the next few weeks/months and what effect will a rising loonie (if Russia and SA work through this spat) have on the dollar hedging. Is it best to buy the Canadian version or the US version with this drop in the loonie and hopefully the eventual recovery in it.

TIA

Q: I have both CLF and ZAG in my bond portfolio. CLF continues to go up as interest rates come down. ZAG was doing the same until the last two days. Do you think the drop in ZAG is due to the industrial bond component and business credit risk? If there is fear that businesses will default on their bonds, it might be appropriate to take profits in this fund.

Q: I know you are not a fan of Baytex. I hold it and Vermillion. Can I get your thoughts on their ability to survive this onslaught? I realize you have no way to know where oil prices will land and for how long they will stay depressed, but can BTE and VET take concrete measures to ensure they survive ?

Q: Could you expand on the NVU.un deal on the 36.25$ offer and its fall to 33.00$ -what are the possibilties etc?

Q: Do you see more downside to ZCS? And why ? It seems very safe in this environment but I want to make sure I understand the risks. Thank you!

Q: I have these 3 ETFs in my RRSP for fixed income exposure. I am strongly considering selling CBO and CLF, down approximately 3% each, to raise funds to buy stocks that are, in my opinion, getting to really attractive valuations today. I'll keep XHY because it is down a bit more (11%) and will likely recover as things improve. Is this an acceptable strategy in times like these. 25+ years until retirement.

Thanks,
Jason

Q: Hi 5i Team,
I have sold Xebec with good profit, what is your update view on this company?
Any impact on this company under this energy down turn?
If one is thinking to buy it back, what is a better entry point?
Thank you for your professional advice as always.

Q: Hello,
Question regarding the 30 day rule on repurchasing a stock that was sold for a capital loss. I sold Enb.to for a small capital loss in a non registered account.
If I decide to re-purchase the stock within the 30 day period I understand that the capital loss is not allowed, as I sold for a very small loss that really does not matter.
My question is; what if any any other penalty or other issue to consider before re-purchasing (my example enb.to) for a much lower price than I sold it for?

Thanks,
Randy D

Q: Hi,

The company reported earnings this morning. In light of that , could you please share your opinion on the stock.

Thanks

Q: It seems like Groundhog Day regarding the Rate Reset Preferred Shares,
and my laddered holdings of Minimum Rate Reset Preferreds are getting thrown away with all the rest. I hold them with an annuity-like mentality, meaning I don't really care anymore how the market values them, and plan on holding them until the stones are bouncing off the casket lid. While interest rates are widely viewed as being "lower for longer" (at present), why shouldn't I be happy to collect (at least) the minimum dividends (commonly 4% - 5%) which are much better than most fixed-income alternatives) from issues of blue chip credits? The outside risk of dividend suspensions is recognized, but aren't redemptions (if and when they occur) limited to a return of the issue price? What am I missing?

Q: Which American airline stock has the strongest balance sheet and/or is the best investment after the smoke has cleared.

Q: considering adding to position. any concerns?

Q: In my RRSP accounts I have built up a laddered GIC portfolio in addition to a variety of stocks and equity etfs, taking the income generated by the portfolio and adding to the ladder. Given the low rates for 5 yr GIC, under 2%, I’m thinking of taking this years income and purchasing CVD, which has a lower payout but more stability than the above mentioned Preferred share ETFs.
I may split my purchase between CVD and one of the above Preferred Share ETFs and am leaning towards ZPR as performance and MER of the 3 is similar but ZPR has a higher dividend payout.
In addition to better income, interest rates should be close to bottoming and if I stage my purchases over the next 3 months I will benefit from unit price appreciation when rates start going up and will have locked in a 5-6% return.
Your thoughts please.

Q: I’m looking deploy some cash. I read your report on which Canadian stocks to look at but can you recommend 3-4 American stocks to start picking away at?

Q: These companies are trading at close to 10% yield. The share price is back to where they were ten years ago and the dividends have since doubled. Are these companies not the buy of a generation right now? In my life I will likely never see these valuations again. Or I missing something huge??

Q: Hi 5i team,
Publish if it is any help or not. There is not much to do in the market these days, as it is what it is. I am just catching up on the Q&A and notice some negative comments about 5i on repairing damaged portfolios. Well, I don’t put any blame on 5i. We are in a bear market. I have been around the markets for a long time and bear markets happen, although this one was the quickest from peak to trough, although I doubt this is yet the trough. In a bull market, cash is trash. In a bear market, cash is king. You have said many times in your answers that asset allocation is our own personal decision. It is up to all of us to manage our own portfolios, raise some cash once in a while, review our asset allocations and to be able to sleep at night.
Thanks for all your work, especially during rough patches.
Dave

Q: Hi Peter. I own ZWH.U which is down about 26%. I had thought that the covered call strategy would have provided some shelter from the downdraft, but it appears that really isn't the case. Oh well. My question relates to going forward. Since the covered call strategy will likely limit future gains, what ETF would you suggest for ZWH.U's replacement in my US accounts? thanks, J

Q: Peter and team
I sold off all my equities part way through this recent collapse.
I have followed your BPort, along with some picks from the GPort.
I do not have the time to diligently follow individual stocks anymore, and was thinking of switching to ETFs.
What are your thoughts about splitting some 400k in cash between ZCN,ZDV, and ZUE. Is there too much overlap in the two Canadian ETFs, and what are your thoughts on going with the "hedged" ZUE?
This is a non registered account. I am pretty sure that ZUE is treated as a Canadian Equity with no foreign withholding tax. Correct?
Thanks

Phil

Q: I have taken a bath with owning ESI.CA. Is there any concern that the company will be delisted from the TSX?

Q: I see the Jeffries downgraded Welltower yesterday, with a price target of $52. I realize that COVID-19 isn't helping here, but this stock is being beaten down to similar levels to that of airline and cruise ship stocks. Do you see that as logical?

I see that this stock can fluctuate from about 20% below Morningstar's Fair Market Value to as high as about 10% above. Of course at the moment we're talking closer to -30%.

In your opinion is the balance sheet okay?
On my TD Wealth screen the dividend payout ratio - 290% - seems out of whack but I believe it should be calculated differently for REITs (?)

As always, thanks for your informative responses.