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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: Subscription receipt offered for $31.00. Do you see this as a good buy at a slight discount to today's closing of $33.32 or should I wait, as sometimes I note in many instances that the initial reaction to issuance of new shares tends to drive the price bellow the offer price. I already own 200 shares at 40.86 and looking to average down. I also like it for income and wonder if the dividend is safe and do you think that the new merger will contribute to ALA`s ability to grow the dividend.

Thank you.
Joseph
Read Answer Asked by Joseph on January 26, 2017
Q: Further to discussion of Crescent Point Energy: I can't argue with concerns about share issuance, but I wonder they're as significant as its exploitation strategy. Historically, CPE has favoured building-up its 'reserve life index' - that is, how many years it can produce oil from its current reserves. This strategy made particular sense during the 'peak oil' era - that is, when netbacks and reserve replacement costs could be expected to go up in tandem, and the producers with the longest-life reserves could expect to come out ahead. With lower oil prices, reserve replacement is more of a ho-hum consideration, while the ability to exploit current reserves goes directly to cash flow. All of which is to wonder if CPE's appeal as a =long-term= play depends on oil prices in ways that other producers' doesn't.
Read Answer Asked by John on January 25, 2017
Q: I am not quite clear on tax implications for the following scenario. Could you please confirm (or not !) if I am correct or if there are other implications ?

If, in a Non-Registered Account, I hold a Canadian-domiciled ETF or Mutual Fund that owns a mix of Canadian, U.S. and possibly other international companies, then:

1) 15% of the U.S. company dividends will be withheld by the U.S. (Or whatever equivalent withholding tax if non-U.S.but international) This amount is reported at year end through the Fund/ETF, and reflected on the tax slip I receive from my brokerage. When I fill out my return, I can then apply for a foreign tax credit which means I should get back all the tax that was withheld.
2) The portion of dividends from the Canadian companies held by the Fund/ETF will be eligible for the Dividend Tax Credit but NOT the portion from the U.S. or international companies.

Thank you for your help !

Read Answer Asked by Alexandra on January 25, 2017
Q: Thank you so much for what you do. 5i benefits people of modest means as well as the wealthy. (A rising market doesn't hurt)!

A reader mentioned grocers earlier today. We went to COSTCO yesterday and the place was packed. They don't have the distribution of the local grocery stores but in a way they don't need to as customers are willing to drive to them. COSTCO is still more of a wholeseller compared to a company like Loblaws and they don't carry all the small products but no doubt they are one reason why grocery stores are finding it difficult to stay profitable.
Read Answer Asked by James on January 25, 2017
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