Investment Q&A

Q: Hello
There are Youtube Investment Advisors pushing the theme of income investing. Nothing else matters, just the income. Not taxation nor ETF price action (Capital Value).

Given this ETF Theme of Covered Call Strategy (some leveraged 25%) are paying such a high distribution, in the right set of market events (down excessive period) can this strategy trade itself to zero?

They are certainly not making 15% income from dividends and call writing. So capital erosion must be the outcome in today's market.

I was holding covered call etfs from BMO during Covid crash. The strategy performed worse, even after distributions, than straight equity holdings. It was a terrible experience as there was zero downside protection and the strategy seemed to accentuate the drawdown.

Given the current environment (more downside in my opinion) are these ETFs setting investors up for an ugly awakening? ( distribution cuts, return of capital (One's own money), price decline and slowness to recover when markets come back)

Thoughts

Q: Hello,

Thank you for all the help in these tough times. The advice from this service does help keep a person grounded in dark days. In anticipation of us reaching peak inflation and small caps beginning to turn around can you let me know which of these you would prefer? Both are trading close in stock price but CTS is much larger according to RBC website 1.3B vs 188M. Both are well down from their highs and both seem to still be growing at a good rate. Which in your view looks like the better horse? Or should a person pick both?

Thanks

Q: Hi, Thanks for today's Market/Portfolio Update, specially the explanation of inverse relationship between value of USD (DXY) and risk assets ( S&P 500, TSX and Stocks in general). Do you think, the market bounce on Wednesday, was for no fundamental/technical reasons, but was a reaction to news from UK of BOE market intervention through Bond buying to support the fledgling economy and a one day breather to unstoppable US Dollar ascent ? Based on this thesis, besides other technicals, would it be prudent to keep an eye on USD uptrend breaking down, before entering into new long positions. Mr David Burrows of Barometer Capital was on BNN recommended to stay on the sidelines, until the market downtrend breaks and at least 2 days of Buying with High Volume is confirmed with follow through for 5 days. Their firm has 30% cash ( due to Stop Loss liquidations in Tech/Financial and others sectors). They own only defensives like Energy, Utilities and Telcos with 0% Tech. Does this strategy make sense, in your view, as most of us are almost fully invested presently as well as in past ? That seems to be the case for past several weeks and months - we buy/add to positions and stocks only get cheaper over following days. BTW, stocks with higher yields in sectors like Utilities/Telcos/Pipelines continue to get decimated - even though, bond yields declined over past 2 days - Any comments , please ? Thank You

Q: I see a lot of questions about tax loss selling with the intent to re-buy after 30 days, and I've never utilized this before. I have approx 250k in an unregistered account across 15 companies, and I'm obviously down on many of them (a lot of tech). Is it okay to not try and take advantage of tax loss selling in this way, given that I'm planning to hold many of these name for at least the next 3+ yrs, and potentially much longer (like 5-10+)? I will be continuing to add to my unregistered account (since I've maxed rrsp and tfsa), and hope to become an increasingly savvy investor, but I'm a bit scared of screwing up tax loss selling to this end, especially at this time with the current volatility. So, would you recommend that this is something I must add to my "arsenal", or just ignore it for now? Are there many successful investors that stay away from the sell then re-buy in 30 days approach all together? Thanks!

Q: Have any of the companies in the 5i Growth Portfolio been actively buying back stock? Have you considered sending out flash emails with this information? Don’t you think investors should be focusing in on CEO’s of companies buying back stock as the market craters?
Thanks

Q: Have you been following the news regarding Credit Suisse? What are your thoughts?

Could there be impacts to the Canadian banks / markets as a whole?

Q: A recent story on CTV news had the following:

I don't think that we're in a recession just yet, but I do think that one is on the horizon," David Doyle, the head of economics at Macquarie Group, told BNN Bloomberg. "Our baseline is that Canada will enter a recession in the first quarter of 2023.

Macquarie Group, an Australia-based global financial services provider, estimates Canada will face an approximately three per cent contraction in gross domestic product (GDP) and a five per cent rise in its unemployment rate during the predicted recession.

We actually think it will be pretty severe in Canada," Doyle said. "I think the die has been cast on this front. Because inflation has become so elevated, and unemployment was allowed to fall so low, I think a recession is almost inevitable at this point.

1. Do you agree or disagree, and why?
2. And if there is a chance of a "pretty severe" Q1 2023 recession in Canada, how would you position your equity investments? Go to cash? Go to certain sectors? go to the USA?

thank you for your excellent service.

Q: NEWS ALERT
OPEC+ to Weigh Production Cut to Bolster Oil Prices
OPEC+ is set to consider Wednesday its sharpest production cut since the start of the pandemic to help prop up falling oil prices, a move that could put pressure on global economic growth.

The Organization of the Petroleum Exporting Countries and its Moscow-led allies, collectively known as OPEC+, are weighing a reduction of more than 1 million barrels a day, delegates in the group said.

Peter; Would this be a trigger to generalists to buy into the oil market? Thanks. Rod

Q: This Bear markets inflicted lots of pain and loss of confidence. XD for BNS is Oct 3 ,so if I sell on Oct 3, please confirm that I still get the Dividend. In term of share performance,Mr Porter is the worst in his tenure of some 9 years vs the other big 6. Txs for u usual great services & advices.

Q: I noted that Warren Buffett recently bought more oxy on the dip. I also noted that some time ago he sold his stake in Suncor. I need to raise my energy sector holdings and was planning on buying Suncor. Because it is a good company and because of the tax credit, versus a US counterpart. But I hesitate when I see Buffet continuing to buy. Does he know something that we don’t know? Or, does he have a special deal that we don’t have access to? I am thinking that if they are more or less equal that I would be better to get the one with the tax credit? But the question is whether they are equal? Or does oxy have an advantage that outstrips the tax credit?
Thanks for the great service

Q: Except for Apple I'm down 40% in the others. Time to sell and wait or hang on for the long term?
I bought Apple at $126 so still good.

Thanks

Q: I am looking at a purchase in my non-registered account. All the above stocks are below there targets and some are at 5 star price levels. What would be your choice from the list for growth for a 3 - 5 year hold?

Q: BoE bond buying announcement largely had to prevent margin calls and pension impact risks. (As well as other economic needs) Not an expert, but it sounds like mass panic in Europe(inflation, Russia etc…) Leading to significant credit availability reductions needed for businesses for financing etc. With this all happening does this not provide an ideal environment for TOI to acquire European business’s at a discount, understanding they strategically use their cash flow to finance the deals. Lead to a very bright bright upside in the future?

Q: What would you see as the best way to play the silver market in this environment?

Q: I received this note regarding GE Fair Fund $200 mil. civil money penalties. Is it worth the time to claim my piece and to go through all the required documents for the 800 shares I had? My cost was around $18k and $7k in losses. The shares were held in an RRSP account.
Many Thanks.

Q: Is this stock of any interest in this market being a long term lithium play? It has held up reasonably ok in this volatile market.

Q: If you had to choose to buy, would you select aapl or Goog?
Thanks Ruth

Q: My current position is down 95%...and I saw more bad news come today. May I ask why the company filled a credit protection and what will likely to happen from here? Is there still a hope on this name?

thank you,

Q: I own this ETF. Down 24%. Not particularly concerned given the overall market. But I do not understand how the industrial real estate sector is expected to perform in the current environment. What is your outlook for this sector? Thanks for your help.
David

Q: Looking ahead to a very tight European natural gas market this winter. Which five Canadian (if any) and US natural gas and LNG companies would see a direct benefit?
Thank you