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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 5i,
What did you think of NPI’s report? The stock does not seem to be selling off very hard today, despite the down market day. My main question is the status of the strategic review. There was no mention of it at all in the detailed press release. It was announced last July so it seems to be getting a little long in the tooth. Thanks for any thoughts!
Read Answer Asked by Lance on February 27, 2017
Q: My Consumer-Cyclical sector is 6% too high and Technology sector is 2% too low.

So need to sell one of (AW.UN, BPF.UN, BYD.UN, CCL.B, CGX, ECI), each with ~ 2% position. Hard to sell any of these tried-true 'favourites' -but trying to take the emotional side out of the decision, and be disciplined. So, I think I should sell CGX because it has been flat for 2 years and I don't expect much upside. Can you provide your an order of selling preference?

And I need to add to these existing Technology Sector holdings (CSU, ENGH, KXS, MDA, PUR, SHOP). Thinking (OTEX, ITC) or more of existing ones.

57 year-old with a Growth & Sector & Dividend oriented portfolio.

As always, thank you for your wise guidance.

CSU, CCL, MDA, ECI, ENGH, BYD, OTEX, SHOP, AW, BPF, PUR, ITC
Read Answer Asked by J Carl on February 27, 2017
Q: I read on the FAQ's of an ETF Website the following question:
"Are an ETF's Assets Under Management and Trading Volume good indicators of liquidity".
The answer they gave was: "No. The most important aspect related to the liquidity of any ETF is that while the liquidity of the ETF itself (the ETF’s own trading volume on the exchange) may be deemed poor or limited, the key gauge of that ETF’s liquidity is the liquidity of its underlying exposure.
With the mechanism of creation and redemption of ETFs, a designated broker (DB) is responsible for ensuring that market prices track the ETFs’ net asset value (NAVs). If the underlying securities can be easily bought and sold, a tight fit between price and NAV is easily maintained.
Hence, an ETF with small AUM and little trading volume can still be highly liquid if its underlying basket of securities is liquid."
Is this essentially correct, and if it is I'm still not sure how this would work? I have avoided many ETF's for what appears to be poor liquidity and trading volume. If I want to sell an ETF and level 2 quotes show a large spread to sell for example 1000 shares, will additional shares in the ETF somehow be created to get a fair market price based on the underlying stocks held in that ETF if I put a Sell order in on what appears to be a low volume ETF? What I am getting at basically is - is there any way of knowing what the price spread will be on the sale if additional ETF units that are created "on the fly" by the DB? I may not be interpreting the answer given above so please try to expand and clarify their explanation.
Thank you.
Read Answer Asked by Alan on February 27, 2017
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