Investment Q&A

Q: As a retired person I am always looking for high yield investments.
So I look at something like HHL from Harvest. It holds 20 equal weighted mainly US healthcare stocks. A solid sector with good long term demographics. I see their current yield on what they are paying out is 8.67% - all capital gains - great! But I see the average dividend yield on the stocks held is only 1.96%. How can that be? Seems it’s done using covered calls Not sure how that works but sounds like it creates added risk. What if the covered call $ generated isn’t enough to meet their intended distribution? Where does the extra $ go if covered call exceeds the distribution.

So I investigate the industry a little more and I see words like- total return swap based, inverse, currency hedged, low/ high volatility, fund of funds, proprietary methodology, 2x returns etc., and I start to wonder what’s going on?

Then I remember the term “ flow through shares” of some time ago and say to myself “ it’s déjà vu all over again.

Derek

Q: I have followed your research and recommendations for a couple of years and have enjoyed the ride. I began with a liquidity of 'say $500k' so to speak. I invested approx half over a short period of time and kept the residual in cash. At my current age of 69, and having developed a distinct aversion to loss, I felt comfortable in maintaining this significant liquidity position. Now, with the markets in turmoil, rather than selling into the market, I am tempted to 'average down' and let go of the cash position I've maintained. I will not be in need of this 'fund' for at least 5 years or so. Would you recommend that I take this posture of buying more of what I have (which includes most of the companies you have in your balanced equity p/f), and if so, which stocks in particular would you recommend I add to.
Thanks,
cj

Q: Please comment on recent numbers, I am puzzled by share price lack of performance??

Q: Dear 5i
I'm trying to understand how companies actually get paid when we own for example an ETF that has a MER of for an example .5%. If the anticipated yield is say 3% you had stated in an earlier question of mine that the 3% is inclusive of fees . So all yields posted are generally always inclusive of fees right ? This means then that the actual yield is 3.5% minus the MER of .5%. So its a matter of the company in question holding their fee back from the yield rather than a case of the said company getting paid the fee which comes out of my brokerage company account directly .Sorry if this sounds confusing . I'm just trying to understand the process and be sure about what yield I'm actually getting and what fees I'm actually paying .
Thanks
Bill

Q: I am considering buying a small basket of jr. copper producers. This is based on the recovery of copper prices up to the $3.50 to 4.00 dollar level in the next 2 years. Would you buy any of the aforementioned stocks and in what order?
Thanks

Q: What do you think about yesterday's high volume decline? I have read the company statment after the halt. I have had some bad luck over the last 2 months and it seems everyday I get crushed with another big hit. I am still following my plan and am still fully invested in a balanced portfolio from your coverage list. Should i switch out vmd for a better name or hold?
Ty!

Q: After bottoming out at $1.00 DHX has recovered to $3.00 a share. Every day the stock moves up in this volatile market. Can you tell me if Fine Capital still holds a big stake and if not who does. It lookslike a good turnaround story—dividend cut, WildBrain gaining traction, conference call had some good positives.? Time to buy this time around after three years of just going down it looks like the bottom was found and DHX is moving in the right direction.
What do you think? I have a very small position.

Q: Hello 5I, In this uncertain investing environment, does it make sense to put some $ into this BMO Put Write ETF, to hedge a bit and collect a 6.5% yield at least until the markets level out, or is it better to raise some cash and sit instead?

Thnx
Dave

Q: How would you rank the above on a risk-reward basis over the next five years?

Q: Is tax loss selling strictly a Canadian phenomenon due to tax laws or is it a strategy available in the US as well?

Q: Heads up...
Just wondering if you missed a word in your answer to Tim today about Whitecap dividend being safe.
You wrote "WCP raised its dividend in June, and cash flow of $697M in the last 12 months easily covers dividends of $112M. But dividends are discretionary, and WCP has cut it before (Jan 2016). But we would expect a cut here. "
Sounds like you meant to say "But we would NOT expect a cut here. " - just in case it was an oversight.

Q: I am looking to initiate a position in an oil and gas company.
Can you recommend a couple of companies that would benefit the most from a rebound in the sector, also your reasons for recommending the companies. I have a fairly high risk tolerance and I am looking at a longer term hold.
Thanks!

Q: Do you see the Blackberry purchase of the AI company as being positive? Is BB a buy?

Q: I note that you have said (in Saturday's FP) that the market is currently not so worrisome because for one thing the VIX has not spiked above 30. Yet I have heard another commentator cite the same fact about the VIX to say we have to have a spike in the VIX before we hit the bottom and so the market will fall more. Same metric but to you it's good and to the other guy it's bad. Can you reconcile these two viewpoints?

On that, while the VIX may indicate not much fear or panic, there sure does seem to be a lot of panic based on the 11-20% drops I've seen on several stocks. Is that because these sellers are just not the ones into options and therefore they are not influencing the VIX?

Thank you.

Q: Hello Peter,

First off, great job on BNN yesterday! Your comments helped reinforce on focusing on the long term and not quarterly results. Just to recap your theme, I have listed the companies with let's say "quarterly miss" , however, with a market over reaction to the downside. Can you add or delete other companies that fit in this category?

Thank-you for being in our investment corner.
Angelo

Q: ZPR is around 75% fixed reset and floating. I would have expected the unit value to rise this year as 5 year rates have moved from around 1.8% to 2.3%. Instead, the unit value has dropped around 7% ytd. Has the spread on preferreds to bonds widened or is there something else going on? Thanks for any insight.

Q: Market beat had 3 analysts with buys and 1 hold with target of 9.25 and Thomson a 10 with buy.Does KWH.UN, these guys just not give good guidance and to be believed going forward.

Q: Just to say that I really enjoyed reading the articles in your Money saver Special Edition. In the Feature written by Moez Mahrez called Future Proofing Your Portfolio I would appreciate your opinion on BOTZ with respect to performance to date and risk level. Thanks.

Q: Would it be a good decision for Lassonde to split since the share is now over 200.00 ? If yes why? and if no why ?

Q: I was surprised at your negative comments about this stock today. Insiders have been actively buying the stock and with the construction boom I would think this stock has excellent potential. Your thoughts? Bill