Investment Q&A

Q: To a recent question I asked, 5i responded: "Some REITs, if they distribute a large portion of income as return of capital, can still be attractive outside of registered plans. But this also relates to our preference for growth inside a TFSA (REITs are typically slower growth)." I checked my TFSA portfolio, and some of my REITs' distributions are comprised almost entirely of ROC (Allied [AP.UN], Chartwell [CSH.UN], Dream [D.UN]), whereas others' (Choice [CHP.UN], H&R [HR.UN], Riocan [REI.UN]) are almost all otherwise taxable income. So I gather from your previous answer that the former type of REITs (Allied, Chartwell, Dream) shouldn't, generally speaking, be held within a TFSA, is that your view/advice? Also, more generally, so I better understand this issue-- what is the main business/accounting reason(s) why some companies' distributions are primarily ROC? Generally speaking, is one versus the other type of REIT (with respect to proportion of ROC within the distribution) a "better" investment, all other factors being equal (i.e., is there any general investment "rule" here)?
Ted

Q: Hi 5i- I'm wondering if you know of a study undertaken on the subsequent performance of a share price after it has passed the "Death Cross" or "Golden Cross" ? Or are these just investment myths? Thanks, Ron White

Q: Hello Peter & Team,

In my weekly digest I caught wind of a comment made when you answered a question re SAP, BYD & FSV. Part of your answer included "FSV may see a slower recovery if the real estate market takes a hit, as is widely expected now."
REAL has recovered nicely during the recent move and I did well with it thanks to your advice prior to the recent Bear. I was considering getting back into the name but the comment above gives me some pause in requiring a position. All things considered, a hit to Real Estate would not be surprising. Would this hurt Real Matters moving forward?

Thanks for all you do

gm

Q: As the market starts to recover, can you please give your opinion on what sectors do you expect to recover faster than others. Thanks

Q: hello
Your view of lifecos and GWO in particular will be appreciated
Thanks
CDJ

Q: HI, I just recently made the switch from mutual funds to ETF’s and a DIY strategy and am looking to lock down 4 low cost ETF’s that I will invest in for the long term (30 + years) and leaning more toward the aggressive side for these. I am looking to take advantage of some dollar cost averaging to enter the ETF market for some broad market index ETF’s in my TFSA and was looking for you opinion of some that I am trying to choose between.
Canadian Market – I am trying to choose between XIC, VCN & ZCN. They all have significant overlap and same MER so I don’t see a whole lot of difference between the three, although I am leaning towards XIU, thoughts on which one you would choose for your portfolio?
US Market – I am trying to decide between VUN & VFV. The VFV has lower MER than VUN and has outperformed VUN as of late. Smaller and mid-cap companies historically had higher volatility than the large-cap companies found in the S&P 500, and so the trade-off is potentially higher growth, for potentially more volatility if you go with a total market index like what is found in VUN. The S&P 500 has outperformed the total market index as of late so I guess the question is will this continue, I am leaning towards VFV, thoughts on which one you would choose for your portfolio?
International Developed – I am trying to decide between XEF & VIU, both have similar MER, thoughts on which one you would choose for your portfolio?
Emerging Markets – I am trying to decide between XEC & VEE for a small percentage of my portfolio, thoughts on which one you would choose for your portfolio?
These are some ETFs’ I have come across from doing build wealth Canada course and reading other materials and listening to podcasts that seem to fit my long-term outlook. I am by no means experienced in this matter and just looking to hit the ground running so If you have better suggestions for certain markets that I may have missed feel free to outline them.

Thanks
Sean

Q: I'm havin' trouble getting my mind around taking loonies to buy green backs, what with the CDN dollar being so low. I have a watch list of US stocks that I would like to buy over the next 6 plus months.

I think that there certain US companies that will be good long-term buys, aka US opportunity positions.

At the same time, I understand the value of foreign currency diversification, seeing how the US dollar portfolio is hold up from the purchase of the green backs a few years ago, using the loonie.

As an option to stocks,  I might be inclined to buy US ETF hedged to CDN dollars because of the though the CDN $ will return to previous levels, even in the face of low oil prices. But at the same time, there are such few  hedged ETF that focus on niches of sectors, like say IPAY.

Bottom line, guess I just have to bit the bullet, as the saying goes, and convert CDN dollars to buy US stocks over the months to the end of 2020. And it seems a key trade off is a possible substantial rise in the CDN dollar which results in FX loss versus higher capital gains from US positions over time, right?!

What a muddled mind set situation I find myself in. But I'm keen to look for clarity.

What thoughts, comments or advice do you have for me?

...........Thanks........Tom

Q: Hello 5i and I hope you're well.
Under current conditions with interest rates, Feds and bank of Canada injecting so much money into the economy, would you recommend corporate bonds or T-bills ETFs. And, what terms: short/medium or long?
Thank you and be well!
Carlo

Q: I hold both of these and believe they are in somewhat of the same business, and while both have only recovered to approx 1/2 of their previous highs before the virus problems, GSY has recovered substantially better in the last few days. Is there a problem with HCG or just a lagger at this point???

Many thanks for all your good advise
Ken

Q: Disney came with flying colours on streaming.
However its nearterm future maybe a question mark given its themepark and related businesses. How do you see its progress in post Covisworld

Q: I have no real undersatanding of this Co I purchased shares few months ago when it was flying high. then I read it got hurt badly when a star lead person left abruptly. Since then it was recovering slowly.
I read now they applied for relief under the new stimulous bill .
How imp is this for SQ. how do you see the company future path

Q: Hello 5i, I have a 5% position in each of above companies and I am down over 40%. I am prepared to be patient for another 8-12 months, but with WCS selling per barrel at less than the price of a beer, will these companies survive? what is their debt to equity ratio? Is it time to bail out now? depending on your assessment which one would you consider safe to keep?
Thanks and be well!
Carlo

Q: Hi


Hi

I read your comment about this company
I noticed that :
Insiders are buying
They are buying back shares

a sign??

Q: If I buy a stock at $10.00/share and it goes down to $5.00/share, I then sell the stock for tax loss of $5.00/share. I wait the 30 days and buy the stock again, but now the stock has gone back up to $10.00/share. Can you tell me what the benefit is? How much do I gain or lose in this scenario?

Q: I would like to know how this fund pays such a large dividend in relation to the yields of its holdings. Secondly, how likely is it to maintain the distribution, especially in respect of the energy holdings. Thanks

Q: Happy Easter to you Team 5i! Happy every day!

I would like to petition our members of a Parliament to allow writing cash-covered puts in registered accounts. Writing covered calls is allowed. Unless I have it wrong, the risk levels are identical.

If allowed, the benefits to investors would be huge.

Would you consider joining such a petition? You certainly know many in the money management business. Would you consider asking them to join?

Is there a financial planner organization in Canada? If yes, the petition I wold like to launch should come from that organization.

Please let me have your thoughts on this.

Q: Happy Easter. I have only been subscribed to your service 3 weeks and I already know it will be invaluable- thank you. I have started 1/2 postions in all 4 of these companies as per your recommendations. I have a 5yr plus time horizon and I am very comfortable with volatility. What I am struggling with is in how to approach taking larger positions in all four, when I suspect they will report in very different fashiosn over this quarter, the second and third quarter, and maybe several more. From reading your responses to the questions, GSY could report just fine and continue showing ok results. LSD will likely look so-so for a few quarters but has some recurring revenue. Finally, DOO and GC will likely look terrible for several quarters with poor boat/ATV sales and nobody sitting at a poker table in a big room with others. If I am a long term investor do I just dive into full positions in all of them in what could be great valuations 5 years from now? Do I approach the four companies differently? I understand your comments on slowly entering into this market because it may have dips over the next 1/2 year and they could be lower, but if i am looking 5 years out do I care, not wanting to chase if we proceed slowly up from here? Thanks in advance.

Q: This question is two fold...one is the payment from XEI applicable for the Canadian Dividend Tax Credit thus 100% dividend and secondly would you think this as a good holding for an unregistered account to be used for income....thanks...Gene

Q: hi
I own the above oil stocks. WCP is small and in TFSA, so I will keep it.
I have oversized position in Parex, but Vet and Fru are small. Looking to sell at least one, today, would you sell Vet or FRU or both ? I am comfortable with my position in Parex but wondering if better opportunities are available in other sectors. Which are your favorites sectors when coming out of this?

Q: hello 5i:
Could you tell me what percentage of their business WSP derives from the US? And, thinking of infrastructure happening at some point, could you advise a US equivalent to WSP?
Paul L