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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: At what point do the banks become a screaming buy? If TD Waterhouse has correct numbers, several are now trading below book value. I have only seen this a couple of ties in my life and it has always worked out okay in the long run. Have I missed anything?
Read Answer Asked by David on March 24, 2020
Q: Hi Peter & 5i,
Thank you for all your professional advice with your years of experience and calmness during this market turmoil.
My question is about bonds.
I have a portion of my fixed income in CBO.
Currently a retail investor can pick up some fixed income bond/debenture from the above mentioned banks with longer term maturities (say 2028 to 2030, they are callable between 2024 and 2026) with a 4% interest rate at current valuations (which are below $100). Even if they did get called then you would get the capital gain and the better interest rate for 4 to 6 years.
Do you think it would make sense to sell a bit of CBO and buy a few of these bank instruments in the current environment?
Your opinion is much appreciated. Thank you.
Read Answer Asked by Dennis on March 23, 2020
Q: Retired dividend-income investor. I currently own BNS and RY. I was planning on topping up BNS, then read an answer about harvesting capital losses. I had already take enough losses to cover my gains to look after 2020 income tax implications.
I selected BNS for its international diversification and RY for its USA diversification.

I am now considering harvesting my new BNS capital loss and was considering either CM or BMO for immediate replacement, wait a bit then do my original top-up later. Which bank to you consider the better replacement?

Thanks...Steve
Read Answer Asked by Stephen on March 23, 2020
Q: I am a buy and hold investor with 5 to 10 years of time horizon.
Have the following 7 stocks in Canadian financials in the order of their weights in our portfolio. Financials makeup roughly 7.5% of the total portfolio including cash positions and we like their dividend. TD, RY, BNS, BMO, SLF, CM, and MFC. I like to reduce exposure to financials and also like to reduce number of different shares. Two questions:
1. Is 7.5% a reasonable weight considering the current situation?
2. Which one of these I should sell to reduce financial weight and to reduce the number of shares in financials?

Read Answer Asked by Naren on March 23, 2020
Q: Good Morning
I own two Bank of Nova Scotia bonds. The first is issued in Canadian funds and matures in 2021. The second is issued in US funds and matures in 2022.
The Canadian bond has dropped in value by half a percentage point in the last month. The US bond however dropped by more than 4%.
Is there an explanation for the drop of the BNS US bond?
Thanks
Read Answer Asked by Terry on March 23, 2020
Q: Hi 5i Research Team:

I have traded Forex before and am new to stock trading. 90% of my RRSP, RESP and TFSA is in cash and I'd like to avail the current market conditions by "gradually" buying the dips.. and holding it over the long term, 5 to 10 years. I understand that no one can time the market or its bottom.

After exploring the reports and questions on your site, I have identified the enclosed 29 stocks based on following criteria:
- Current Retracements of > 75% over 52 week high & low
- Dividend Yield > 5% (in some cases, like WEED, which is a bit risky, I understand there's no dividend in the near term.. and I am simply going for the upside swing over the next 2 years... same for CRON and Air Canada)

Considering my 90% cash position and strategy to partially buy in on dips over the next few weeks, can you please advise if my stock selection is sound. In addition to my stock picks, please advise anything else that I should keep in mind.

Thanks for everything you do. Much appreciate.
Read Answer Asked by Meherban on March 23, 2020
Q: Hello 5i
I have a tax loss that i can claim on bns. But, the problem is that i would like to replace it. Because of its focus on latin america, etc. There is no direct Canadian equivalent. I do hold bac in the US and TD in canada. I do have us cash, if needed. Any suggestions for a place holder, or even a replacement?
Thanks for the good work in these difficult days. It is evident by the comments that it is appreciated.
Read Answer Asked by joseph on March 20, 2020
Q: Hi, I'm a retired, dividend-income investor. I took some profits and losses (to wipe out potential capital gains) over the last 5 weeks and am now planning on reinvesting the cash to top up some of my existing equities, up to my desired asset allocation. I want to leg in, in probably 3 waves over the next couple (?) of months, to top up ZWC, AD, AQN, AW, BNS, BCE, LNF, NWC, RY, TRP, WSP.

Can you please indicate which of the above equities you would allocate into which wave (in other words, does it look like the equity is "ready" for an investment OR should I continue to wait for a while)...or not at all (not worth any further investment).

Thanks for your help...Steve
Read Answer Asked by Stephen on March 18, 2020
Q: Hello 5i--I'm looking at these companies for the dividend yield. A bonus would be their recovery to previous highs. What would your ranking be for the three to achieve these goals? Thanks, Ron W
Read Answer Asked by RON on March 18, 2020
Q: Which Canadian bank looks most attractive right now?
Read Answer Asked by sean on March 17, 2020
Q: I'm interested in the Canadian banks due to the recent drop and the dividend yield which is very attractive. I have remained in cash for most of this crisis and am anxious to buy. However, I'm very concerned that we are in for further shocks to the economy given the fallout of this virus. How much exposure on the downside do you see to the Canadian banks' balance sheets? I know that if the market goes down, everything will move in tandem but what I'm worried about is that we are in for a high number of failed small and large businesses. Also, I've left my money in US dollars for the last number of years because I think it's a better place to have money and will be buying Canadian banks listed on the USA exchange if that makes any difference. Thank you as always for your comments.
Read Answer Asked by Jason on March 16, 2020
Q: For someone looking for income, what dividend stocks, in any sector, would you find most appealing?
Read Answer Asked by Michael on March 16, 2020
Q: After the "blood in the streets" kind of day we have had today, March 12, was I "crazy" to add to my holdings of the aforementioned? Are their dividends as reliable as I perceive them to be? FYI, I am a year away from retirement at age 60 and value dividend income for a portion of my portfolio.
Read Answer Asked by David on March 16, 2020
Q: What do you advise about investing in banks given current market environment. What are the tipping points - pro and con? Which 2 or 3 banks [Canada or US} would you put on a watchlist?
Read Answer Asked by sam on March 12, 2020
Q: Are you aware of any research that provides detailed analysis regarding oil patch exposure of the big 5 banks?
Read Answer Asked by Tom on March 11, 2020
Q: What would be the top 3 Canadian banks have the best/quickest rebound potential ? thanks
Read Answer Asked by Marco on March 11, 2020
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