Investment Q&A

Q: Hi,

Do you think the US feds recent comments regarding slowing worldwide growth and less rate hikes will affect the Canadian Banks as well? If so what effect?

Q: Your comments please, on the following article in Reuters today with respect to a forthcoming recession once the yield curve inverts? Personally equities in general appear to be fully valued today and i'm reluctant to add cash to this market.

NEW YORK (Reuters) - The spread between three-month Treasury bills and 10-year note yields inverted on Friday for the first time since 2007 after U.S. manufacturing data missed estimates.

The three-month 10-year yield spread, the Federal Reserve’s preferred measure of the yield curve, narrowed to minus 0.56 basis points. An inverted yield curve is widely understood to be a leading indicator of recession.

The Market Purchasing Managers’ Index report, which tracks activity in the U.S. manufacturing sector, on Friday disappointed investors, with the headline index down 0.5 percent to 52.5 versus the expected 53.6. Earlier, Germany reported that domestic manufacturing contracted further in March, driving the benchmark 10-year U.S. government bond below zero and adding to fears of a global slowdown in growth.

The soft data exacerbated a trend that began on Wednesday after the Fed issued a statement showing policymakers foresaw no further rate hikes for 2019 given the slowdown in the American economy.

“The reality is the market is now expecting lower rates on average over the next 10 years than we have currently. And it’s a combination both of a dovish Fed and also ongoing global growth concerns,” said Jon Hill, U.S. rates strategist at BMO Capital Markets.

Q: Good mornng,
Thank you for your prompt and very helpful answer to my question re: Mutual funds/ETFs that do not pay any DISTRIBUTIONS and only generate CAPITAL GAINS.
As a follow up to your general HORIZON Total Return ETFs recommendation, what are your thoughts in terms of appropriateness if I were to split the amount to be invested in each of my minor grandchildrens' Non Registered in-trust accounts as follows: 50% in HXS.CA and 50% in HXT.CA? Your comments/thoughts on these specific ETFs would be most appreciated. Feel free to recommend other ETFs as need be . Thank you.

Q: would you confirm for me if it is correct that DSC can be deducted from capital gains as outlays and expenses. and would be claimed using schedule 3 when completing my income tax return? thank you

Q: I hold Total SA TOT in my RIF.But now I hear that ADRs are subject to some horrendous fees/taxes. Is it true?
I've been with you for a year now, and even though I don't follow any of your portfolios, I'm learning a lot. Thanks.
Jerry

Q: Good morning 5i,
I have the above in my TFSA for a few years The stocks have been declining. Please provide your insight for going forward. Am thinking of replacing it with DRG.un or FSZ. Please suggest a couple of names for some growth n some dividend income. Thanks for your great insight as always! Rossana.

Q: I have owned this stock since I bought it at $16. It is now at the absolute high it ever was and I am wondering if it would be a good idea to switch to Northland Power for a better chance of capital gain. The div. would be the same since I can buy double the shares or would it be smarter to sell half of EMA and invest the proceeds into either Northland or Algonquin. I do not own any other power utility. Thank you for your great service provide over the years. H.
P.S. Someone is selling $750 m worth of shares and should that bring the price down somewhat?

Q: I am close to retirement and have about 2/3 of my total portfolio in a corporate taxable account. All are equities with 53% Can, 39% US, 2.5% EM and 6% cash.
What could you suggest to recession proof and at the same time be tax friendly to help mitigate my risk given the aggressive 94 % equity holdings?
The other personal 1/3, of which 20% is in a non registered account, comprised of RRSP/LIRA/TFSA has about 33% fixed income.
Thanks
Jeff

Q: It seems to me that there are straws in the wind of a coming recession (inverting yield curve, global growth warnings, trade wars, Brexit hits, etc.). Would you agree with this hypothesis? What assets would you recommend for building a more recession proof portfolio? Should we leave stocks almost entirely and go to bonds? I have no real recession plan yet feel I need one. Any help is, as always, appreciated.

Q: Lots more discussion this weekend over an inverted yield curve. I have two questions:
1) Is this something to be worried of, and do you think investors should be more conservative in the next 12 months?
2) Didn't the 3 and 5 year yield curve invert in December 2018? If so, I'm assuming the 10 and the 2 inverting isn't a huge surprise, although markets have done really well in the past 3 months.

Q: I’m under the impression that 5i research preference for a pipeline yielding company top pick is Enbridge versus Trans Canada RP .
However fundamental analysis shows that TRP has more attractive entry price, better management performance over the past 5 years and lower debt better level.
KPI benchmark shows: TRP lower PE of 13.7 vs 22 for ENB, better ROE 15.2% versus 7.2% for ENB , significant better Ebitda to debt ratio of 4.8 vs 5.4
while both stocks have similar price to book and dividend yield and dividend growth projections. Future 2 years EPS growth shows that both projections are within the same range and ENB is scheduled to have a lower 2019 EPS versus 2018
What am I missing here ?

Q: Hi,
after trading over $71/share in February, the stock is down more or less 10% since their earnings release. I thought they had a good quarter and I was happy with another dividend increase.
In your opinion, what may be factors explaining this downtrend? Is this more related to the sector rather than company specific?
Also, I don't have a full position in the stock. Would this be an opportunity to increase my position or given the price action, is it better to wait and see where things settle? To be honest, I see the market telling me to stay away for now.
Appreciate your opinion as always.
Thanks,
Dan

Q: Hello,
I have held FSZ for a few years now (small position of less around 1%). The share price has not moved basically since mid-2013. I am very happy with the dividend (another increase this quarter) and it appears to me they are a well managed company.

I know they operate in a sector that is not favorable but are there any catalysts on the horizon that might be a positive for the share price in the mid to long term or should one simply hold this for the income?

Would National Bank eventually buy this out (I know this is speculation but had to ask)?

And, what would be a good target % to hold in a well diversified income portfolio inside an RRSP for the average investor? I have full positions in BNS and SLF.

Thanks,
Dan

Q: What happened to Lundin today. Seems like a big drop on a rumour.
Also your current opinion of them in general.

Q: I am looking for a Canadian ETF that can go both long and short.
Please give me your first choice and the reasoning.

WEB

Q: 7:42 AM 3/25/2019
I am looking to invest in 10 or 12 of these companies for a very long time: RY, CM, BNS, CNR, SU, CNQ, NTR, ET, NWC, FTS, EMA, NPI, AQN, BIP.UN, BEP.U, ENB, TRP, PPL.

I am concerned to select companies with the highest probability of surviving a severe recession intact while continuing to sustain or increase dividends over the next 10+ years.

I fear some may have too much debt or other "hidden" problems to survive a major downturn so could you please comment on debt levels and vulnerability.

Could you please arrange them in order of "security of income", safest first, and maybe single out any weak ones. I am not overly concerned about future price fluctuations as long as dividends can be sustained.

I quite realize these are not the same as government bonds and do not have the same levels of safety. I intend to hold them purely for rising income with no intention of selling.
Thank you............. Paul K

Q: I am looking to take a position in this fund .
Does this fund go up as a rule when the overall market go down
How are the monthly distributions for tax purposes calculated. If I take a position now I would not be taxed at year end for the months that I did not hold the fund or are taxes applied at year end for the full year to all holders regardless of when the fund was purchased.
Thank You
Al Mississauga

Q: Good morning Peter
I own shares of GWO. If I were to sell them now, to take advantage of this buyback offer, could you explain how I would determine the price for each share. Is it market price or some price I determine between $30 and $35?
Also do you recommend sell all of my GWO shares if they trigger a capital gain?
Thank You

Q: My question is highly speculative but I would appreciate your opinion. I have $500,000 which I would like to invest in the above securities. My own gut feeling is to invest the funds with 60% in VFV and 40% in XIU over a period of 120 days. Thanks, Bill

Q: are the dividend from the above stocks taxed at 50% income or full income ? is there a change in the new federal budget so all dividends will be 100 % taxable