Investment Q&A

Q: In follow up.

In regard to my last question the weightings were mentioned but not very clearly.... just to clarify ALA: is 4.47% wt SGY:is 1.55% wt Tog is 1.97% wt. The weightings of all the other stocks very from the highest,TD @9.7 the lowest of 3.29 for CHS.UN. The rest are fairly close in between.

Not sure if this clarification changes your answer.

Q: When a correction (5-15% downturn) is in process, how can you tell that it is simply a correction as opposed to a bear market (greater than 20% downturn)? What metrics do you use to tell the difference between a correction versus a bear market?

Q: I am trying to make a plan for what I will specifically do when the next correction comes. I am making a list of stocks that I will buy. I have set aside some cash. My plan is to spend 25% of my cash at each 5% downturn interval. So when the market corrects 5% I will spend 25%. If the market corrects another 5% I will spend another 25%. My plan is too keep going until I run out of cash. When I do run out of cash (when the market is down 20%) I would tap into a line of credit using the same strategy.

What do you think of this plan? Is it a good way to manage a correction? If not, can you suggest a better way? Thank you.

Q: Hi, with CAD$ almost at $0.80 are there any US or Global stocks that make sense to buy at this time.

Please provide your favourites regardless of sector.

Q: Comment: If it's not "fair" to pay taxes when you withdraw from an RRIF, it's not fair to avoid the taxes in the first place. The trouble we all have in calculating our net worth is we forget about the taxes! The tax deferral just doesn't work as well for those of us with high incomes in retirement. I expect there arr many who think that's a good problem to have!

Q: Have a family member that needs to supplement her monthly income. She received $60,000 recently.Should she use a investment brokerage account buy dividend payers, collect monthly income she derives from that and pay the occurred taxes, or since she does not have a TSFA open one and then (can she) withdraw the monthly dividend from the tsfa tax free on an on going basis. There is investment knowledge in the family to assist her. Thanks you for all your help

Q: Being 73, I saved most of my life to an RRSP which flipped to a RRIF @71, with mandatory withdrawals. In the process of doing estate planning, and with the RIFF, being taxed @50% of withdrawals which is a difficult pill to follow. Initially I was withdrawing cash, however after further consideration, this year I transferred loss position "Crescent Point".
1. Would it be best to try and tsf everything before you expire and pay the tax.
2. When you tsf, is it best to tsf your losers initially, and then the winners.
3. I assume there is no other means of elevating the tax on RIFF.

For sure, RRSP are great during your working years, but never considered the tax burden after retirement. As an example if you have a 1 million RRSP after taxes $500,000.00 Does not seem fair
Look forward to your rely and thanks for your service
Rick

Q: If Trump's shenanigans hit the fan , and he is impeached ... which sectors will get murdered , or does everything fall , including the USD ? thanks

Q: My overall portfolio is down 3% the last 6-8 weeks which I justify as the downside of having equities in the portfolio. I am 40% in cash so the drawdown could have been worse. My concern is that the 3% drawdown is just over $20000 and that is a lot of money. We are 70 with defined benefit pensions and really don't need any more capital; just want to preserve what we have. You preach the downside of market timing, but I see $ 20000 worth of paper gains slipping through our fingers. Short of investing 100% in gic's should someone with my profile be more of a trader ie use tight downside tolerances and sell when a predetermined gain or loss is met rather than buy and hold. Please comment as I very much value your opinion. Thank you.

Q: Which category of stocks are these (financial, energy and etc )?
BRK.B(Berkshire )
CDZ
BAM.B(Brookfield )
Thank you

Q: I just read this from a respected member of an American investment service and would like to know your thoughts. Do you agree with his reason that the fund industry does their tax loss selling in September? If so, is this the case in Canada also?

"If anyone out there expects to do tax loss selling this year, I have a few words of wisdom for you.
September is the worst month of the year for the market historically. Look it up, you'll see. The reason September is such a poor performing month is that the fund industry does their tax loss selling in September because that's the end of their fiscal year. They don't operate on calendar year.
The reason we usually get a Santa Claus rally is because wash rules have been exhausted, cash has been raised, and cash goes back to work because fund charters stipulate they can't hold over a certain percentage of cash.
So, if you are going to sell something for tax losses, and want to buy the company back a little later and establish a lower cost basis, the time to do your selling is in August, prior to the funds doing their selling. You'll have time for the wash rules to play out so that you can reinvest in time for the Santa Claus rally."

Q: I am a new member and just came into an inheritance. I want to preserve the capital and am wary of a big market correction looming on the horizon - soonish. So, where can I park my money to preserve its value while waiting for the financial Armageddon?

Q: Which is the best way to calculate the annual EPS Growth Rate for a stock that has had a miss(s) over 5 years? I want to compare all stocks as per their annual EPS growth rates (actual and estimates) to find the great companies to invest in.

Here is an example of TCN's annual growth rate (no misses) over 5yrs from TD:

2013 2014 2015 2016 2017 2018 GR (%)
0.23 0.55 0.56 0.56 0.63 0.81 28.63

Here is an example of PKI's annual growth rate (with misses) over 5yrs from TD:

2013 2014 2015 2016 2017 2018 GR (%)
1.32 0.66 0.46 0.49 0.72 1.17 -2.38

Here again is PKI's annual growth rate over 3 yrs from TD, restarting the rising growth rate trend at 2015?

2015 2016 2017 2018 GR (%)
0.46 0.49 0.72 1.17 36.50

Obviously, if I use PKI's 5 yr EPS GR it would rank well down my list. However if I compare all stocks using the 5 yr EPS GR it won't penalize a company that has been intelligently growing earnings consistently? Your thoughts would be much appreciated.

Q: At one point you were considering starting one or more ETFs based on your portfolios. Anything happening with that? Thank you.

Q: Hi 5I,
General question on how successful short sellers operate. Do they short the stocks daily, weekly or how do they keep the price down? If they continually short the stock, do they not end up owning a considerable % of the companies stocks in order to keep the price down? Is there a website that gives the % of the stock that is shorted? It appears that you need to be careful in the Canadian market that you are not on the opposite end of the short attacks. Are there any other Canadian stocks that are heavily shorted?
Thanks Keep up the good work.
Bob

Q: My current holding in one RRSP consist of the following:ABT
CSW.A
FR
GUD
IPL
ITC
PKI
PLC
RIC
SIS
T
TLT.V
BEP.UN
BPY.UN
CSH.UN
TOY

What do you think of this setup? Is there any additions that you would suggest? My time horizon is 20 to 30 years. Cheers
seamus

Q: what would be your suggestion building a balanced portfolio using only us etf's portfolio size about a million, time horizon 10-20 years

Q: Re my previous question of Mawer funds in a TFSA, your answer seems at variance with the advice from Mawer.
Mawer advises that:" Mawer mutual funds are structured as a Canadian Mutual Fund Trust.Foreign holdings inside the fund are not classed as foreign holdings for withholding tax purposes"

Q: I would like to ask for your opinion and comment on my investment approach with reference to hedged to CAD or un-hedged versions of ETF's available from Canadian issuers. My approach has been the following:
- keep US equity ETF un-hedged;
- keep developed and emerging international equity ETF's hedged to CAD;
- keep US bond ETF's hedged to CAD.
I am aware that this approach was not too benefitial during the past month or two, and I am starting to have second thoughts, but I figure I better ask for a second opinion from a pro before I make any changes. This is where you guys step in...
Thank you.

Q: How much faith should one put into Recognia valuation charting? Is there any evidence that any of their predictions bear out?
Can you explain how they come up with their projections?
Guy R.