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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 have IPL 2.3% and PPL 3.9% in a taxable account. Held them for years and I am about breakeven not counting the dividend. I am thinking of selling IPL and buying ENB. Would this be good idea for the long term?
Read Answer Asked by Robert on July 19, 2017
Q: I Would like to buy a canadian ETF that has all us banks, preferably the large banks. Either hedged or unhedged, depending on your decision as to which is better. Do you think this is a good idea?
Thank you for all your great help.
Read Answer Asked by Shirley on July 19, 2017
Q: Hello,

I have a previous position in RioCan that has lost 6.5% value. I also have some spare cash from distributions to reinvest. I am tempted to add to the position in order to bring it to the allocation target and also average down cost. I see a lot of the REITs are suffering though, probably due to the recent interest rate hike. In addition RioCan has been mentioned in the news regarding Sears Canada stores shutdown. They defended very well though saying that Sears only attributed very little to their income.

Would you add to REI in this situation and do you see any fundamental concern going forward with RioCan?

P.S. I don't need the distribution income immediately and will reinvest it anyway.

Thank you
Read Answer Asked by John on July 19, 2017
Q: Sold aw.un been a good run in an income RIF looking to replace it with Npi or Cpx or a similar utility . I am well diversified and switch does not alter weighting.

Would appreciate your opinion on this matter.

Thanks
Read Answer Asked by James on July 19, 2017
Q: what is your favourite ETF or growth stock that is outside Canada. Is it a good time to buy it now?
Read Answer Asked by Helen on July 19, 2017
Q: Nexoptic received Notice of Allowance from the USPTO around June 29. As I understand, this means the USPTO intends to issue patent within 3 months (by Sept 30), subject to the filing fee and any blueprints necessary. Nexoptic's press release advise they expect to receive the patent in 4-8 weeks (meaning by August 31). This should quell questions "as to the robustness of its technology".
Other than your valid point of no sales at this point, is there a reason you can see that this significant event has not sparked greater interest by moving the share price and volume upwards?
Read Answer Asked by Rob on July 19, 2017
Q: I have multiple questions in this post, feel free to take as many credits it requires.

I am right now rethinking my portfolio and your advices-suggestions would be greatly appreciated. I am investing for the long-term 10+ years

In the past 2 years, the size of my portfolio has tripled, mostly due to savings. Both my RRSP and TFSA are full, and I am now putting my new savings in an unregistered account. My full position (5%) size is currently between 8 to 9K$. When I began investing, in my TFSA my positions were more of 2-4K$. Here's a list of what stocks are in which account :

TFSA : ATD.B, GSY, MG, NA, OTEX, PHO, POT, SNC, T, and TD
RRSP : AQN, FTS, GUD, SIS, KXS, SLF
Un-registered : BAM, CCL.B +50K cash

I was thinking of selling SNC to buy back WSP in un-registered, and also moving TD to un-registered. So I could add to PHO, OTEX and GSY (my smallest positions). Is there other stocks in my TFSA that would better fit in another account? Do you have suggestions?

Also, I know I have some more growthy names in my RRSP that would might be better in a TFSA, but that's where I had room at the time of buying. Do you you think it's worth moving stocks from this account or it's OK leaving it as it is? I am at least 30 years away from retirement and don't plan to use money in my RRSP soon.

I would like to add gradually 4-5 positions to my un-registered account with my cash position. Do you have suggestions for quality long-term stocks (as I want to avoid as much as possible to sell in my un-registered) that could improve my portfolio?

Thank you!
Read Answer Asked by Julien on July 19, 2017
Q: Hi 5i,
Just a comment. For anyone looking at historical returns to evaluate the future prospects for a balanced (equity + fixed income) portfolio, it is extremely important to consider that the next 30 years of fixed income returns are virtually guaranteed to be significantly different than the past 30 to 40 years. Bond yields (interest returns) were in a generally declining trend, originally from nosebleed levels, for about 35 years from approximately 1980, during which even government bond yields dropped from double digit peaks to the negligible rates available over the past couple of years. The portfolios of investors who held bonds of significant duration early in that period reaped high interest rate bond returns while they watched the paper value of their bonds increase with each downward tick in interest rates. The fixed income component was potentially a tremendous contributor to very good portfolio returns over much of that extended period of declining interest rates.
Looking out over the next 30 years, the prospect is vastly different. Bonds don’t have anything remotely approaching the same kind of return potential. Current interest rate returns are still very low as rates are recently just beginning to move off what may later be viewed as ‘the bottom.’ The prospect for people who hold bonds of any significant duration while rates rise is that their holdings become less valuable. Low interest instruments may need to be held to maturity in order to avoid a loss of principal. In the meantime, those low interest bond returns will be a drag on any better portfolio returns that may be generated by equity holdings. If you have 50% of your portfolio in bonds that pay 2%, and you hope for an 8% overall portfolio return, you have to generate a return of 14% from your equities. Maybe bond yields will return to levels where they are not so detrimental to significant portfolio returns over the next 5 to 10 years but maybe they won’t. If they do, then holding bonds while the rates are rising can be painful. If they don’t, then they may go through an extended period where the chief value in bonds is the secure return of capital at maturity but the return prospects until maturity are relatively dismal.
The fact that someone buying a 10-year Canada Bond in 1982 got a 16% annual rate of return on it is not an indication of what anyone putting together a bond portfolio or balanced portfolio today can expect it to realize. It is completely irrelevant.
To assess the return prospects of a balanced portfolio today, you need to consider the relevant details and prospects for today's bonds, not the irrelevant details and portfolio contributions of bonds that have long since expired.

(Please print only if you think doing so may be helpful.)
Read Answer Asked by Lance on July 19, 2017
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