Investment Q&A

Q: With the world feeling a little uneasy about a pending recession, I want to keep only holdings that will weather a downturn. I'm not trying to time the market, and want to hold stocks, that while they may dip, have good balance sheets, good management, and will likely see a recovery. Others I will sell and hold the cash. Above are my current holdings. Do you see any that may be susceptible to excessive weakness in a recession and would therefore meet my sell criterion? Thanks,
Kim

Q: Gentlemen, good morning would you buy canadian bank today? Which one and why? Thanks. Alnoor

Q: Hi,

I am looking to reduce my exposure to financials across my family's portfolio, from 23% to 13%. Sunlife (3.03%), Royal Bank (3.41%) and TD Bank (5.55%) comprise our most significant holdings, all of which we have held for many years. I am looking to reduce and reallocate one of those positions as part of the overall reduction. Which in your judgement would be the best candidate to let go?

Finally, and I apologize if this question has been asked and answered before: is there any drill-down facility planned in the 5i Portfolio Analysis features that would list all holdings in a particular asset class, geographic sector, and/or industry? Or does the facility exist and I am missing it? For example, it would be helpful to have the portfolio analytics tool to be able to list the holdings that it is including in its calculation of the portfolio “financials” weighting.

Thanks
Derek

Q: Hi,

Looking for three names for a long term hold. Can you pick your best three choices for some growth, some income and not too volatile?

Q: I own the Canadian bank stocks listed above with BNS, RY and TD each having a 6% weighting and NA 3.5% and BMO about 2%. Overall my Canadian bank weighting is over 20% of my portfolio, mostly a result of inheriting my father's income portfolio. I want to trim my overall weighting, which bank(s) would you trim.

Q: I hold all of the above in roughly equal weight in the income portion of my portfolio. The first three are at roughly breakeven, the latter five are up, two of them over 20%, as economic conditions have weakened. I am wondering why I don't simplify life by selling them all and buying the PDC ETF which provides greater diversification and has a dividend yield of 4.59%. I realize that 25% of PDC is in energy but mostly safer pipelines. Would this be a good move or am I better off to keep what I have?

Q: Hi Peter, can I get your updated analysis on Steve Eisman's thesis on Canadian banks from today's BNN posts? Do you agree? What is it that he's seeing that we're not seeing (besides him flipping by shorts)? Would you be able to write a 5i blog post on how we can value banks (i.e. key ratios, ROA etc). Thanks.

Q: Assuming the RY.PR.H rate reset preferred resets today I have made the following new interest rate calculation;
The new interest rate is the GCAN5YR interest rate plus 2.26%. Today the GCAN5YR is 1.368% so 1.368 plus 2.26 equals 3.628%. This is below the initial 5 year interest rate of 3.9%. I calculate the actual Fixed Rate Calculation Date is August 24, 2019 minus 30 days is July 25 2019, which is only a month & a half away. At that time the GCAN5YR rate will probably be the same as today. Would you please confirm that my new interest rate calculation is correct. Today the RY.PR.H on the TSX is trading at a yield of 5.5%. If my calculations are correct, is the price falling because no one wants to own this preferred when the new lower interest rate is determined. Would appreciate your thoughts. Thanks .. Cal

Q: Hello,
Our financial weighting is still quite a bit higher than you suggest for a portfolio...so my plan is to sell our (underwater) CIX as well as one or two of our (positive) bank stocks. Appreciate your ranking and thoughts regarding our bank holdings noted above. Thank you.

Q: I have all these stocks in my non-registered account, I have some money to deploy. My two smallest holdings are CP and WCN, should I add to either one or would you suggest a new stock?

Q: Good morning,
Wondering if you could please comment as to Steve Eisman's thesis on Canadian banks ( shorting specifically CM, RY and LB) and the deleterious effects of a shift to positive loan loss provisions for the stage 1 loan book( those loans that are current), where such a shift would, in his words, "crush" earnings( growth?).

Thank you for your insights,

Q: Have any of the big 6 Canadian banks ever cut their dividends and if yes can you please provide specifics as to when, by what magnitude.
Many thanks for your service,
Stevr

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: With the possible exception of BMO, the Big Five banks seem to be hitting a plateau. At the same time, there's talk of moderating interest rates. But shouldn't lower rates be a stimulus for banks' business - mortages, etc.? I thought it was the insurance companies that benefited from higher rates. Or is the apparent tapering-off of banks' growth just a reversion-to-the-mean phenomenon?

Q: I have the above securities, as well as RBC Cdn Equity Inc, Sentry Cdn Inc, Sentry Global REIT, and fixed income via Fisgard Capital, Annuities, a company pension, CPP and soon-to-be OAS.

I really focus on asset allocation and am a little light on Consumer stocks, holding CGX, PBH and TCL (although some consider TCL to be in the Industrial sector). I am normally a buy-and-hold investor who trims-adds around core positions.

Question 1 = I am looking to add 1 more consumer stock and am looking for a dividend ideally > 3%. Based on my stock-ETF-MF mix, are there a few stocks you could suggest that would fit in my above set of securities.

Q2 = if I was to consider ideas from the Income Portfolio, is there an issue with having multiple food stocks....like PBH and A&W and NWC. Why have more than one food stock?

Q# = because A&W is a ".UN" company, how are their dividends treated for tax purposes? Are they eligible for the dividend tax credit?

Deduct as many credits as you deem appropriate....got loads and will never use them all up.

Thanks as always...Steve

Q: I hold the above banks. Which would you hold right now and which might you liquidate, of you needed the finds and why?

Thanks for all your support,
Mark

Q: Hi,
I have approx 10% weight in these in a long term RRSP following your porfolios(Only 1% WN as spin off)
I have about $!0,000 to add. What are your thoughts?
Add to a few laggards or add new?

Q: I have been contributing to my TFSA since inception and I currently have $90,000. I just put in $6000 as my 2019 contribution and I'm wondering what stocks I should look at. I'm 27 years old, have a long term time horizon, and I'm very comfortable with a lot of risk. Looking mainly for growth at this point. I currently have 30% of my account in the following (wxm, iwo, xsu, tdb3055 and RBF1035) (pretty well equal amounts). In addition I hold T, rY, BNS, JE, Enb, dol, ala, cjr, and fts all set up in Drips in roughly equal amounts. I also hold about 10% of my tfsa in ABM, EDT, loto and GQ for risky plays, all of which are down 50% except abm which is up 50%. what do you suggest adding at this point? Thanks so much!

Q: The short and long term performance of Royal Bank has strongly outpaced CIBC. Would it be prudent to sell my CIBC shares and buy Royal Bank with the proceeds?

Q: Hi Peter and team, I'm just starting to look into setting up my RRIF and wanted to ask if 5i could recommend any good reading materials, with respect to what sort of assumptions I should make? Currently my portfolios are producing income which would equate to about the minimum I would consider withdrawing on an annual basis. This will be my only income other than CPP and OAS. Is there any benefit to equalizing my US/CAD exposures when I'm not really planning much travel to US? For example, I could replace my Telus with VZ or my RY with JPM. Thanks again for your great service.