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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: I have taken over all my parent's finances due to health issues. It has taken quite a while to sort through things (2 years), but I am almost done. They are both over 80, and in 'ok' health. They are thinking of 20% exposure to the market, so I have come up with the following as a plan. Do you think this is reasonable?

HISA and Cash - 100% of their past year's expenses

Percent based on the remaining funds:
57% GIC
20% Bonds
6% Preferred Shares
13% Dividend bearing stocks
4% Growth stocks


Also, any suggestions for other categories not mentioned, like trusts (eg BEP.UN)?

Thanks for your great service over the past year!

Fed
Read Answer Asked by Federico on April 25, 2019
Q: Hi 5i,
HXQ vs. XQQ – Questions and Comment: 1. Is the XQQ’s dividend subject to US tax withholding? 2. If not, is it eligible for the Canadian dividend tax credit? 3. My discount brokerage site indicates that the MER on HXQ is actually lower than that of the XQQ but I understood you to suggest otherwise. Can you please just confirm on that one?
It seems to me the elimination of the total return feature of the HXQ may not be the most important element in deciding between these funds. The charting function I use shows HXQ to have outperformed XQQ measurably over a 3 year period. While some of that might be attributable to HXQ’s lower MER and ‘total return’ feature, isn’t the bulk of the difference attributable to the fact that HXQ is unhedged, while XQQ is CAD-hedged, and over the 3-year period HXQ’s return has been amplified by the Canadian dollar’s decline against the US buck? Or is there something else in the mix? In any case, maybe the decision on whether to switch from HXQ to XQQ should be mostly a matter of whether one would prefer to be CAD-hedged or currency-exposed over the anticipated investment timeframe. Whatever tax consequences might flow from the other variables involved, they could easily be overwhelmed by a currency move of a few percent and, in a taxable account, any gain on a currency move would remain tax-deferred until a disposition event. Even then, the applicable tax rate would still be the capital gains rate. So that aspect of HXQ’s tax efficiency would be preserved. HXQ may not end up being as tax efficient as it was when it could avoid cash distributions. But if it is just going to have a yield akin to XQQ’s 0.44%, and if available alternative holdings (like XQQ) are already doing that, the fact that HXQ may have to pay a distribution may not be the most important consideration for a switch decision. Or am I missing something? Thanks!
Read Answer Asked by Lance on April 25, 2019
Q: I'm looking for a new play in the materials/resource sector and SJ seems to be viewed positively both at 5i and others. However, I see it has traded sideways since mid-2015, and EPS dropped to 1.98 in 2018 from 2.42 a year earlier.

What is the reason for sideways trading and drop in EPS? Are they behind the company?
What are the short and long term catalysts for SJ?
I see its free cash flow is variable from year to year, what accounts for this?
I'm thinking of moving my position in MX to SJ.
Read Answer Asked by Cameron on April 25, 2019
Q: Is it possible for a Canadian investor to buy into BYD Build Your Dreams a Chinese electric car company. Is there an ADR for this company. I heard Mr Buffet owns 20%. Any thoughts on this and could it go into a TFSA. Thanks Chris
Read Answer Asked by chris on April 25, 2019
Q: Curious if you saw the piece on dividend investing in the G&M this week. Would welcome your response to this article which basically
questions the value of dividends and the whole philosophy.
Read Answer Asked by Scott on April 25, 2019
Q: Holding a BAC position in US dollar portfolio that is well balanced, diversified. BAC is held for bank exposure in the Financial Sector. Also hold position in V in this sector. Given current circumstances, like low interest rates and lower growth, I am questioning holding BAC. What is 5iR's take about BAC? Is there an alternative to BAC in the US finance sector or just underweight the finance for the time being?........Tom
Read Answer Asked by Tom on April 25, 2019
Q: Good morning 5i,
TFII is one of the few growth stocks which has grown for me recently. I have about one percent too high a weighting in the industrial sector and I would like to buy Boyd Group. i am therefore thinking of selling TFII. I figure it may not go too much after the good news announced yesterday and it might be a good time to take a profit. Or, would I be better to hold it and find another way to get the money to buy Boyd?
thanks
Read Answer Asked by joseph on April 25, 2019
Q: I was reading an article in the Globe about green bonds. What is your opinion of the above named and would you suggest any others. The yield is important but the safety is primary.
Thank you for insight.
Read Answer Asked by Maureen on April 25, 2019
Q: (This Question is not private; for some reason all my questions seem to be popping up as private even when I select public).

This Cannabis company trades at less than one times projected revenue for 2019 and I bought it last week because that sounds cheap. I have no idea how to evaluate these companies. This company operates mostly in the US. Any guidelines that you can offer?
Read Answer Asked by Murray on April 25, 2019
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