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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: I currently hold 2 preferreds in my RSP, BEP and CPX, both with a floor yield. While I have no compelling reason to sell either (both are up between 5-10% based on my purchase price and disregarding dividends), I note that ZPR has a slightly higher yield and would be much easier to sell should I want to. What do you see as the pros and cons of selling the 2 individual preferreds and replacing with ZPR? Assuming (?) that rates have somewhat stabilized and are probably more likely to decrease long term rather than go higher, how would this affect the price of ZPR? Does the price of ZPR react more to interest rates or the overall market direction?
My objective here is more income-oriented that capital gains.

Thank-you, Grant
Read Answer Asked by grant on March 28, 2023
Q: As a follow-up to Adams question on March 27 if you had to pick one REIT only from Canada or the US with good upside what would that reit be —-considering fundamentals and valuation
Thank you
Read Answer Asked by Indra on March 28, 2023
Q: In a balanced RIF account. Looking for consistent yield and some appreciation. What do you think about swapping out BLV for JEPI? Totally different co's I know but..with a possible Fed pause and likely interest rate reversals in the next year or so, will this give BLV a boost, and maybe worth keeping
Read Answer Asked by Harry on March 28, 2023
Q: Hi Peter and 5i,

Here is your answer to the last question on ECN.PR.C. November 2022.

"Yes; while it is a small company we are comfortable with its credit risk, and the dividend was re-set in June for the next five years. Note the shares can still fluctuate and decline if rates rise or investors worry about the company, but the dividend should be stable and fine."

Do you still feel the same way about this Preferred given the current circumstances of the company?

Thank you for your valuable service.

Cheers
Read Answer Asked by Dennis on March 28, 2023
Q: Hi, it feels like general tune has changed on ECN. Based on previous questions regarding ECN, it was highly ranked by 5i and most recently as a top 3 small cap growth stock recommendation based on potential and valuation, and management per question raised on Mar 21st. After the latest earnings reporting on Mar 23rd, it has fallen 25% since. Are potential, management and valuation (25% cheaper than Mar 21st) no longer a recommendation to buy, but rather to only hold? Would like to understand the thought process behind this if this and if this is a short term momentum recommendation, rather than a long-term recommendation. As well, were general headwinds not expected on recession and higher interest rates? I understand that magnitude was more than expected but likely temporary? Thanks!
Read Answer Asked by Eric on March 28, 2023
Q: I understand that, on its ex-dividend date, a dividend-paying stock will likely decline in proportion to the value of the payout. Knowing that, can one do anything to avoid getting caught in a rush-to-the-exits? For example, while WFC declined by $3 (that is, by the payout value) on the ex-dividend date, it continued to decline (by an additional $2.50) over the following two days (it has since recovered.)

In this connection: where the exchange supports trading outside of regular trading hours, does the 'ex-dividend date' still align with the regular open?
Read Answer Asked by John on March 28, 2023
Q: The BPO pref shares, in my view, are trading at levels that indicate serious concern over credit risk.
A question put to you on Jan 30, 2023 was with respect to who held the liability for the BPO pre shares (the questioner was asking about BPO.PR.G specifically). You replied:
“While BPO is a separate legal entity, its preferred shares are under the obligation of BN.”
However, a similar question was posed Mar 20, 2023 with respect to BPO.PR.P and you seemed to reply that the obligation on those BPO pref shares was with something called Brookfield Property Preferred LP.
Forgive me if I have mischaracterized your answers, this is a bit confusing to me. It seems to be a very big difference though.
I am assuming that the Preferred LP is some sort of subsidiary?
If so, that would make the BPO prefs MUCH more risky, in my opinion.
I note that the Financial Post reported in Feb 2023 that yet another Brookfield subsidiary (Brookfield DTLA] has defaulted on loans on two major office towers in downtown Los Angeles. The loan amounts are staggering, by the way.
Can you please clarify all this?
Read Answer Asked by john on March 28, 2023
Q: Hi

BMOInvestorline offers a HISA currently paying 4.35% interest accrued daily and paid monthly. It is not locked in and I can withdraw at anytime without penalty. I haven't found a better rate anywhere. Even EQ Bank only pays 2.5% in its savings account.

I haven't been able to find a "catch" but this seems too good to be true. Am I missing something? Or is this a really prudent way to keep the cash component of my portfolio, assuming I'm going to keep some cash.

Thanks
Robert
Read Answer Asked by Robert on March 28, 2023
Q: Hi Peter,
A lot of high yield ETFs distribution contains a return of capital, which means you get back a portion of your own invested money. It seems to me this is a marketing ploy used by the ETFs to entice investors with a return that is no ‘real’. Which is better for an investor whose primary goal is to increase her wealth and not aiming for a certain amount of monthly/annual income distribution - a plain ETF that has a yield of 4% or a high yield ETF that has a yield of 6% which includes a return of capital of 2.5%? For investors, are there any drawbacks or concerns for ‘return of capital’ feature apart from the necessary book keeping of adjusted cost? Thanks.
Read Answer Asked by Willie on March 27, 2023
Q: If interest rates and inflation are going to peak, do you think these ETFs (XLF, IAK TLT) have opportunity now? If so which one has most potential right now? Thank you.
Read Answer Asked by David on March 27, 2023
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