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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: Can you explain the rationale for recent move of the selling of shares by the major shareholders? They sold at quite a discount to where the stock has been. None of the funds raise will be used by the company. My understanding is that they hold 500M and could only sell 140M. Plus expectation is to list on a major exchange - is this signalling that won't happen soon. Thanks
Read Answer Asked by Aubrey on May 13, 2019
Q: I am sure your recent article regarding foreign content was aimed specifically at me...haha. You nailed it! My method (illustrated in your article) resulted in 35% foreign content. The Domiciled method was 10% It sparked a fair bit of inflection on how I determine my asset allocation and I am still working through some scenarios. Probably another question for another time.

Q#1 = I am a retired, conservative, dividend-income investor. If I wanted a one-stop shop USA ETF that pays a good dividend, I was thinking of ZWH-ZWS. I already own ZWC and ZWE. I like the covered call strategy, especially at this point in the market cycle. Are there others I should consider?

Q#2 = Would you go unhedged...I am guessing yes, based on your previous "hedging" answers?

Q#3 = I understand that if I wanted to buy a USA ETF, like ZWH or ZWS, that the preferred placement would be in my RRSP...due to the withholding tax issue and the "distribution" tax benefits. That, however, would require a major overhaul on a reasonably successful asset allocation already in place.

What about purchasing ZWH-ZWS in my Cash account? I understand the distribution would be comprised of Capital Gains, Interest Income, Dividends and ROC and each would be taxed accordingly....no problem. What about the withholding tax? I thought Canada had an agreement with the USA that there would essentially be no double taxation. So, if the USA withheld tax, then this would become a tax credit against Canadian tax owing...with this being reflected in the T3-T5 issued annually. Please help me to understand.

Thanks for your help...again, great article...Steve
Read Answer Asked by Stephen on May 13, 2019
Q: I notice a number of people here are thinking about diminishing dividends and going for capital gains instead. I know I am looking at that. It would be interesting to have an article discussing the relative merits of Canadian dividends. For instance, you wrote an interesting article recently about home bias in Canadian portfolios. i think one of the main reasons Canadian have lots, and maybe too much, in Canadian is because of the preferential treatment of Canadian dividends.
tbanks
Read Answer Asked by joseph on May 13, 2019
Q: just a comment for the gentleman who posed the option of quitting and deferring his pension. One thing to always keep in mind is that in some company pension plans, if you defer your pension you lose eligibility for retiree benefits which in some cases can significantly reduce your risks in retirement significantly. Extended Health care benefits in retirement can be a significant benefit so if you are considering deferring your pension, make sure you understand what happens with any Retiree Benefits you may be eligible for.
Publish at your discretion
Read Answer Asked by kelly on May 13, 2019
Q: Retired, conservative dividend investor. I consider a "full" position to be around 5%, which is reserved for the likes of "true blue chips" (BCE, BNS, RY, FTS, TRP, etc.) and lower weights for non-blue chip. I hold the following securities, with the following weights:
CGX = 4.4%
NWC = 2.7%
PBH = 4.8%
TCL = 3.3%

Q#1 = Regarding topping up, I am virtually at a full weighting with CGX and PBH. Based on today's Qtr results for CGX, would you top it up?
Q#2 = Given my blue chip comments, would you add more to NWC? I was thinking of moving is to 4%.
Q#3 = Regarding TCL, I am down (surprise!). At $15, it is looking very interesting. Depending on the width of your pencil, it looks like a decent level of support right where it is now...versus catching the proverbial falling knife. Current strategy = wait for Qtr numbers June 6...agree or add a bit?
Three questions...please deduct 3 credits.
Thanks...Steve
Read Answer Asked by Stephen on May 13, 2019
Q: Can I get your thoughts on Brookfield's (BAM.a) earnings, today, vs expectations.

What do you think of their valuation against the backdrop of a diminishing FFO (Scotia estimates: 2019 FFO of $3.78 vs 2020 FFO of $3.75)

Lastly, can you comment on their debt levels. Looks like a significant decrease in debt levels in expected in 2019.

Thanks.

John
Read Answer Asked by john on May 13, 2019
Q: I have a relatively conservative portfolio with gold, bond and low risk ETF and stock elements. I want to add a little bit higher risk, higher reward portions to it. Can you rank the above four companies?
Read Answer Asked by Mahdi on May 13, 2019
Q: I would like to know what the Management and employees have been doing other than collect salaries for the past 5 years, other than a few small acquisitions and filings with the authorities it seems to me that they do not deserve much compensation. I can't see them "working" 50+ hours a week looking at investments day in and day out year after year. What have they been doing? Goodman raised a ton of money at $10.50 or $11.00. I would like to see Goodman and his management team paid a salary of $1 per annum (just as Steve Jobs did) and be paid with stock options, not at the current value but at $10.50 or $11.00. I have put my faith in this guy but like a lot of shareholders I think its time to move on from Goodman and his underperforming company. Goodman's talk of an overnight success for my grandchildren does not give me much comfort. I was hoping for more of a shake up yesterday and was disappointed it did not occur. The fact that his Dad owns a company that competes with Knight was something new that I did not know when I purchased GUD shares.
Read Answer Asked by stephen on May 13, 2019
Q: My question is about keeping a defined benefit pension with a former employer or transferring to a LIRA to invest in index funds/market etf's. I keep hearing that the plan is great (PSPP Gov plan) and that I should leave the money in there because you are paid for life at retirement. But I'm trying to wrap my head around why it is considered so good. From my point of view I see my 75K sitting in this plan year after year not growing. Supposedly it accounts for inflation (not sure if only when I start claiming or now that i've left plan), but they say around 1.5% adjustment. I still have minimum 20 working years left. In my mind it seems like a no brainer, I transfer to a LIRA invest is 3 market index funds predominantly US, then CDN, and a little International. If I achieve a 6% return I have 240K after 20 years vs 75K. Yes there will be ups and downs but over 20 years I should do pretty well. Am I missing something? Why would someone stick with the pension that doesn't grow or barely grows, just for safety at the cost of much bigger returns?
Read Answer Asked by Adam on May 13, 2019
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