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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: With all the issues going on when is it time to start investing and what stocks to look at?
Read Answer Asked by Mark on March 13, 2020
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
Read Answer Asked by Gerald on March 13, 2020
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.
Read Answer Asked by Ken on March 13, 2020
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
Read Answer Asked by Jason on March 13, 2020
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
Read Answer Asked by Randy on March 13, 2020
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?
Read Answer Asked by Howard on March 13, 2020
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.
Read Answer Asked by Bruce on March 13, 2020
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?
Read Answer Asked by sean on March 13, 2020
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??
Read Answer Asked by Joel on March 13, 2020
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
Read Answer Asked by Dave on March 13, 2020
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
Read Answer Asked by John on March 13, 2020
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