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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: Peter et al,
This question is directed to Peter, because I need an answer from someone who has seen many takeovers. In the case of the acquisition of IPL by Brookfield, I opted to receive exchangeable trust units for as many IPL shares as possible. The trust units, as you well know are used to effect a tax deferral on the IPL shares.An allocation factor was used and " X " number of units were allocated. The remaining shares were given the cash value of $20.00 / share. This total was then divided by the VWAP of the BIPC shares for a five day period. The resulting price was higher than the $80.00 ( 4 x IPL price of $ 20.00. ) This resulted in fewer trust units received. If there was any fractional shares remaining , they were rounded down, and no payment received.My questions-- How common is it to use a VWAP instead of the offered price as the divisor, especially as the equivalent Bipc shares fell shortly after the 5 day period. This price must have been supported? How common is it to round the remaining share or shares? I have always got paid for fractional shares.It is fine and dandy to say that Brookfield are good allocators of capital, and good managers, but they certainly are not shareholder friendly. Comments please?

Thanks as always,
Ben.
Read Answer Asked by BEN on December 01, 2021
Q: Hi 5i Team!
Wondering with the new variant if anything has changed in terms of your outlook on stocks going forward. When faced with lots of volatility if one has a well diversified portfolio, relies on dividends for income and has a long time frame until retirement can a buy and hold strategy be adopted? With so many investments I would never be able to time the perfect exit, know when to rebuy, so I just buy and hold. I know you are not fans of stop losses, nor am I, but do you also ride out bear markets and hold investments rather than sell and reenter. Your thoughts would be most appreciated. Thank you!
Read Answer Asked by Neil on December 01, 2021
Q: Thank you for your response to my last question. As a follow-up, do the four utilities stocks that I currently own (BEP, FTS, AQN, NPI) offer adequate diversification within the sector? Just wondering if I should add to these (in the best to worst ranking you provided) or is there another utilities name (Cdn nor US) that you would add to be better diversified and if there is, would you sell one of my current 4 utility stocks or just add the other name?
Your insight much appreciated,
Doris
Read Answer Asked by Doris on November 30, 2021
Q: Suggestion for 5i. Please be more careful in what stocks you feel will move up in price and raise to your customers' attention.
I see that MRS has fallen like a rock since 5i spoke so highly of it back I believe in April. A mere 7 months ago the stock was 70 cents and now under 20 cents. When 5i first touted the stock, I found it odd as it didn't seem all that solid a company for the long term, something that 5i keeps reminding customers about. MRS had won big government contracts but much was related to the pandemic. What would it do for an encore after the pandemic? I was lucky I guess and chose to pay little attention to it but I'm sure others didn't and had to take a loss. It's on us (customers) to due due diligence and decide what seems like good investments. But I expect 5i to raise names to our attention that fit a long term strategy and aren't get rich quick wonders. I supported the 5i decision to strongly caution against getting involved in the early days of cannabis stocks.
Keep up the good work, thanks
Read Answer Asked on November 30, 2021
Q: I find TOI’s slide puzzling. With no news from TOI can we assume that a portion of the selling is profit taking and some is the downward momentum spurred by such selling? Perhaps there’s no way to know.

I have been considering selling some or all of my CSU position to participate in a TOI upswing, though I hate to part with it, but the gain has been large. TFSA, so no tax implications.

Am I being too greedy, or is this an opportunity?
Read Answer Asked by Danny on November 30, 2021
Q: I am looking to add 1 ETF to existing all-ETF portfolios in my TFSA and RRSP accounts. Existing portfolios are roughly an equal mix of technology growth (ZQQ), dividend appreciaion (VGG) and a bit of fixed income/growth (VCNS) for stability. I am looking for something "alternative" for a roughly 10% position that would not be correlated to traditional equities or fixed income and preferably provide some inflation protection. May I please have your general thoughts (pros/cons) on the Purpose Diversified Real Asset Fund for this purpose. Can you also offer some other ETF suggestions within this general objective, either CAD or USD, that I might consider as alternatives to PRA. Thanks as always.
Read Answer Asked by Brad on November 30, 2021
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