Investment Q&A

Q: Portfolio Analytics indicates I am over allocated and perhaps over diversified in Financials: BAM.A 2%, BNS 2%, TD 4%, X 2%, BRK.B 4%, MA 6% and Industrials: CCL.B 1%, CNR 4%, NFI 1%, FDX 3%, HON 3%, LMT 6%.
Which positions would you recommend trimming or eliminating?

Q: BNS is up AFTER they posted loss, increased reserve provisions etc., BUT it seems ALL the banks are up today even though news about their future is still pending!
Should we "read" that "birds of a feather" phenomenon is operating here and the market has decided to ignore the pending results of other bans and is into a full blown buy mode!
Do you think it is risky or reasonable response to the current situation and one can buy bank stocks now? I know your favorites are RY,BNS,TD.

Q: when does td report quarterly earnings?

Q: In a portfolio where the priorities are capital preservation and some income, these 7 equities represent about 45% of the total value. The other 55% is in sadly low paying GICs. The TOU is a left over from more positive times with a very small weight and kept with a hope for natural gas. The other 6 have weights of about 3% (TD) to 10% (BCE). My question is about how these would hold up if we had a very significant downturn with re-test to recent lows (or lower) with a much more prolonged recovery; do these stocks have some resilience? Are the balance sheets sufficiently secure to see less of an negative impact? Is there sufficient diversification with these holdings? Thanks for your excellent service.

Q: Hi All:

With the negative feeling about banks for loan loss, etc. I wonder if I should let go either TD or RY or both and take the loss, then watch to buy back later. the total market value is about 3.7% of my total portfolio, and each one is almost equal in market value. The loss in TD is 19+% and RY 15+%. I also own NA with a gain and only 1.5+% in my portfolio.

Thank you.
L

Q: Can you please rank these stocks in terms of current valuations / market timing?
I am planning on purchasing 2 or 3 over the next few weeks and am wondering where to start.

Thanks.

Q: What do you think the main reason for the current decline is among these banks. Is it fear of loan losses, fear of what the companies are to report next week or the sell in May mentality? How much pessimism is baked into these stocks already?
Thanks, Mike

Q: Not only B of A (today's Globe) but quite a few analysts and BNN Guests say that Canadian Banks are going to take a hit b/c of earnings, poor reserves, Loan write offs etc., With that in mind is it worth selling BNS,RBC,TD and buy them back later ? In RRSPs/TFSAs. So, capital gains/loss is a non issue. I "lose" 60 $ in trading fees. But selling now can save me from losing a lot more if they tumble a lot AND I don't have to wait for a longer period of time for them to recover. ( You know the cliché, if a stock goes down by 50%, I have to make 100% to break even!)

Q: Can you please explain the losses in the big five Canadian Banks shares. I can’t for the following reasons so would appreciate your thoughts before I start to increase my exposure.

Their mtge portfolios are mostly insured , ultimately by the govt. the balance of their mtge loans are normally at significant discounts to the property values.

The new loans being made by the government will likely be backed by the government , not the banks.

They all have a long history of not cutting dividends, BMO has not in 190 years and BNS in 188 years and I expect the other three banks to be in the same approximate time frame of no dividend cuts . Unlikely you will find a US back or an Insurance company that can say the same.

They also over reserve their loan loss provisions in order to keep their profits from the wild fluctuations we see in the US.

Thanks

Q: Morning
Currently I hold CIBC. BNS. TD ROYAL
All are down
Would it make sense to sell cibc and top up TD and BNS.?
Thank you for your calm approach these days
Michael

Q: This is in response to an answer you gave on an earlier question today. As you may have gathered I am rather new to options. I wonder, first of all, whether you might be able to suggest a resource to understand the basics. I have been doing well but have stayed pretty close to the bit I do understand. Mostly covered calls. But, related to the question I asked earlier about the covered call on TD, to avoid capital gains, could I not buy back the call before expiration? I know this might cost me a bit of money. But, it would allow me to take the chance of trying to make some option premiums on some of the stocks I own, without the worry about capital gains and taxes. I am not familiar enough with this to know, though, whether it could be a useful strategy.
thanks

Q: I am about to triple the size of my investment in the portfolio above and give equal weighting to all. Virtually all of this new money will be in non-registered accounts. In total, this self-directed portfolio will represent 20% of my holdings; I also have 40% in a growth-focused pension fund, and 40% in a mix of ETFs through a robo-advisor.
Do you have any suggested changes to the list of names? I am primarily focused on growth, with a 3-5 year horizon.
Do you recommend a different weighting e.g. heavier on some, lighter on others?
What are your thoughts regarding timing? I am tempted to put all of the new money in now, betting on the sustainability of the recent recovery. But I understand that a phased approach will reduce risk.
Thanks for your help.

Q: Hello 5i,
This is a general question on investing. Say if i own TD, for instance, and i don't want to lose it, or something similar to it. Is it a reasonable practice to sell a covered call on TD and at the same time and roughly the same date, sell a put on something like BNS. I don't really mind if i end up owning the both of them, either.
Thanks

Q: I own TD and BNS. BNS has underperformed for years. I was thinking of keeping TD, but replacing BNS with RY. What are your thoughts on this?

Q: Given that my Margin account has the 5 big banks and 2 Telecoms paying dividends on a periodic basis and that I'm not "too" concerned that these will cut their dividends, would it be wise to implement trailing stop loss orders for these in case there is another retest of the lows of March. Had I done that at the beginning of the year, I could have picked up the above at much reduce prices with resulting greater dividend yields. And would using the same procedure for my RIF account (which has mainly REITs) be beneficial to capture the current values to avoid further losses there.
Your comments. Thank you

Q: Hi 5i - Retired income investor but also interested in growth. I have been holding FFH.PR.K:CDN for a number of years. Decent income but limited growth opportunity. It represents 1% of my portfolio. Portfolio analytics indicates I should increase my exposure to communications services. I've been thinking of selling FFH and buying BCE which I don't hold or adding to my current Telus holding (at 2.5%). Other options could be adding to Fiera (only 1% holding) or to TD (3.6%). Appreciate your thoughts and other options that provide relatively safe income with a greater long term upside. Really appreciate the good work you guys do!

Q: I have all 5 big banks and the 2 telecoms in my Margin Account for income purposes. I sold FRU and IPL because the dividend was reduced significantly. So I have some cash available to top up.
Given the Banks have Yields and Pay Out Ratios as follows (BMO 6.34% - 46.83%; BNS 5.90% - 44.47%; CM 7.49% - 36.67%; RY 5.25% - 44.84%; TD 5.82% - 44.76%) I am considering CM as the best yield and lowest Pay Out. Would you concur?
Thanks

Q: Hi,
Could you please comment on commercial impaired loan growth with respect to the Canadian banks prior to the Cov 19 crisis ? Have they increased their reserves appropriately ?
Thanks

Q: I have roughly equal weights in NA, RY and BNS and a half position of TD in a TFSA. Even at the worst point of the decline (so far), I have stayed above water on on all but BNS.

As a retiree who loves his solid dividends, the banks are attractive to me and my total holdings are likely higher than you would recommend. I am wondering if I should use the correction to move out of NA and redistribute the funds into RY and BNS. (No room to add money to the TFSA.)

Your thoughts?

Q: Morning ,
Relative to your recent comments on Canadian Banks and shorts , What % of shorts does it take to make a meaningful impact on the upside. Have benefited in shorts recently in Snap, Shop and ETSY . Cut my investing teeth in the Nortel, Rim , JDSU days and yet my banks have been my best long term move.
Thanks
Greg