President & Portfolio Manager at J. C Hood Investment.
Member since: Oct '09 · 1899 Opinions
The market is in a bubble with tech euphoria. It's a moody market as investors watch earnings and it effects their decisions. Investors should be watching the stocks outside the Magnificent 7. Multiples are also too high.
They're scary. You're selling calls and buying puts. Essentially you're selling a spread to get the yield, but this has all kinds of complications (currencies, option exercise) and wild cards. It's not for him, perhaps for sophisticated investors.
Focused on dividend stocks on the S&P at medium risk. He's done well with it. It covers value-oriented stocks.
A covered call ETF that's done very well because it holds tech. Nothing wrong with that, but remember that the covered call acts as an underlying drag on the underlying stocks. If he's investing in higher-risk including tech, he doesn't want covered calls, but likes them on dividend payers and banks. As for tech, he expects an earnings problem in the next few months.
Likes covered call ETFs on banks and dividend payers, not tech. He prefers BMO ETFs, because they run the covered call on 50-60% of the stocks, so you still get the upside on the balance. ZWK pays around 10% dividends, but remember you don't enjoy the tax credit in Canada on these American banks
Dislikes inverse ETFs which are too risky. Would rather do put options.
As we've seen in the past year, when interest rates rise, you will get killed holding this.
A straight S&P index ETF. Nothing wrong with this. Similar ETFs are also fine, like VV and SPY.
Owns a lot of this. Pays a good return. However, buy ZEB (no covered call) if you believe the banks will recover.
Buy ZEB (no covered call) if you believe the banks will recover.
Came out a few years ago with LCDN's (limited recourse capital notes) to add another dimension to the income stream of the banks. The markets was attracted to this for a while, but no longer. He once owned this.
He owns few Canadian assets (is overweight US). He owns very little of this now. It's discouraging to invest in Canada; it takes forever to get approval for projects. Meanwhile, the US market is much more dynamic with far more depth. For example, what is the Canadian tech index or healthcare? They're far broader in the US.
He normally uses XSP, though there's no huge difference with VSP. Would continue to hold VSP.
See other comments today on ZBI. No longer owns it.
Regulators have been threatening for several months to clamp down on the returns on these HISA ETFs. Some providers have tossed treasury bills into the mix. Any declines will be limited to only 20-30 basis points. So, he's holding onto his cash ETFs for now. No point in owning several of these, because they're all the same.