Investment Q&A

Q: With oil prices stabilizing or increasing, what are the implications of the reduction in the high fuel margin tailwind that resulted from falling fuel prices? Is recent weakness just profit taking or is this part of the reaction to high multiples in the consumer staples sector. I have reduced my position from 28% to 17% over the last few months. Would you recommend reducing some more? To what level?

THanks,
Hans

Q: To Denis' message about the Verizon spin-off from Vodaphone, I am in the same situation. He would have received a T5 covering the dividend 'amount' as I did.
The same thing happened the year before with my Abbott shares when the company spun off Abbvie. In that case, Abbott actually offered shareholders the Election option to defer the dividend but I got a T5 anyway and the CRA taxed me accordingly. I'm still trying to contact them about that since I submitted all the relevant paperwork with my return.
Perhaps another member with accounting expertise would care to comment?

Sorry I didn't post this sooner.

Molly

Q: Thank you for the article on Preferred Shares. My former advisor at RBC-DS did not explain 90% of what was in your article. I lost a significant amount on the preferred shares he sold me. My question is this: Generally, at large brokerage firms, what kind of behind-the-scene commissions or "incentives" do advisors earn for flogging preferreds?

Q: I am looking to diversify my holdings outside of Canada as we are told we should.I am looking for ETF's for U.S. as well as other world markets.It would be best if you could start other model funds for outside of Canada or recommend a clone of yourselves.

Q: Your recent article on preferrers only alluded to resets, which are now over 60% of all preferrers issued. So, I don't know how much I can take from the article. For example, I would like your opinion on efn.pr.e. You have recommended fen several times recently, and this preferred yields north of 6.5%. I believe I get my 25$ back in another four years, as long as the company is solvent, right? And the reset spread is around 4.5%, so I either get my money back or i get a very good yield when this five year term expires, right? I realize I am not participating in the cap gains, but I traded that for a 6.5% yield that seems quite safe and getting my money back in the end (i.e. 5 years). Am I missing anything?

Q: Hi guys,

I am low on consumer discretionary/consumer defensive stocks in my portfolio. I am looking at a minimum holding period of 10 years and for dividend paying stock with good dividend growth history. Could you suggest 5 stocks, 3 Canadians ones and 2 US?

Thanks!

Q: What % range would you consider acceptable ( min to max ) for financial stocks for a middle aged dividend investor with 7 years to work and a goal of building up a portfolio that will pay dividend income upon retirement. I invest in all sectors with ETFs, individual stocks and a small number of mutual funds ( Chow etc ). My portfolio includes small mid cap and large cap, both in Canada and worldwide. I find even non industry specific ETFs are on average 20% in financial stocks. Tough to keep under 20% when you start buying PWF, BMO, BNS, SLF etc.

Many thanks

Paul

Q: Just wanted to make sure I am thinking straight re hedging principles related to the U.S. dollar denominated securities. One option is to buy ETFs that are hedged. The other way is to buy U.S. denominated securities in U.S. dollars and then some unhedged ETFs that invest in U.S. dollar securities , but invest with Canadian dollars.

Thank you.

Paul

Q: Atd.b has not had strong technicals lately, coupled with what I would call heavy inside selling, in excess of 29m. Could I please have your further thoughts
Thanks

Q: Hi team, How do you feel about Cat? Do you think it might be dead money for the next couple of years? I have held it for some time but now I have found it to be lagging, I assume due to the oil situation.

Q: PAR Technologies (PAR.us): Looks like an interesting microcap that appears to have its shares under pressure. I would appreciate your thoughts on investing in this company. Appears undervalued but I don't see any info of substance on it. Thanks

Q: I read in the Globe and Mail that the Hydro One IPO will have 20-30% of the IPO allocated to retail investors. If it is true, can clients using discount online brokerages accounts participate in the IPO? What do you think is a fair price for its IPO and would you recommend it? Thanks

Q: Keith Richards at Value Trend Wealth Management who appeared on BNN Market Call Tonight is of the view that S&P500 could see a 20% plus correction this summer. His reasoning was primarily based on Technical Analysis. He also mentioned that at present, retail investors (dumb money) are twice as much bullish as sophisticated investors like pension fund managers (smart money). What are your thoughts on this prediction for an imminent market correction?

Q: Given your endorsement of J. Goodman's ability and based on my research to confirm same, for high risk speculative plays I have essentially copied Goodman by taking positions in CRH earlier this year and PDP recently and before its increase. Like Goodman I took profits on CRH - as it turns out a little early but still a very healthy (no pun) return. For PDP I now have significant paper gains. I appreciate Goodman is principally lending to these smaller companies and I find GUD's strategy in this regard intriguing. Are you aware of other pharma companies that GUD has also financed or plans to finance? I will likely take gains on PDP but I would appreciate any insight you could offer on the recent spike and significant increase in volume. I only have a small position in this one, even after the spike, and I don't need the money. It goes without saying that your independent informed view is greatly valued. Thanks!!!

Q: Hi folks: can't seem to get this Growth thing right. For example; according to Yahoo finance,the growth rate for XTC for this year will be 34.7%. The growth est. for next year is only 18.4% so is this is a "growth" stock for only the rest of this year? Several of the other stocks in the Growth Portfolio seem to have the same problem.

Q: Update on your views appreciated please.

Q: Good morning,

Can you please provide your latest thoughts/opinion on RVX as a speculative investment.Recently the stock has been behaving very well from a technical perspective on a significant increase in volume.
In your opinion is it worth taking a small position at this time?
As always, thanks for your unbiased perspective.

Q: I believe your last comment about VRE was in August, 2013, at which time you preferred XRE. Now, looking at these two ETF, which one would you prefer. VRE only pays a 2.1% distribution compared to XRE's 4.7% but over the past two years VRE's value has risen nearly 3x that of XRE's. I am curious why VRE pays such a low distribution when most of its holdings are paying >4%. Is VRE really doing so much better than XRE or am I just mis-interpreting the numbers.

Q: I am a shareholder fo this one. Fro the past few months it has inched up hitting new highs almost every week. How do you intepret this kind of trading? Is it possible evidence of quiet accumulation by a fund or institution? No reported inside buying except for some smallish trades as recently as this week. I can see it being taken private by the Pollard family or bought out.

Q: Can you list your Growth Portfolio under "Portfolios" please? I have great difficulty finding the Growth portfolio on your site and I like to refer to it often. Thanks.