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Hey nice one. The difference between the CAN $ and the US$ has been giving me and my buddy Jeff some fits. We were involved in some DRIP's a few years back he baught me out when I moved back home (needed the cash) but we spend a lot of time discussing companies we find and he has since gone into the market in a bigger way.The stocks were US for the most part and at the time $1 US was $1.65 CAN. he has closed down some of those DRIP's already but now the ones he has left in US$ are already eroding in value due to currency devaluation. The $1US is now $1.15 CAN a change of -30% on in two years. His stocks are still going up in value but they are fighting an uphill battle. His advantage here is his low price per share and a nice fat Dividend helps to take away the sting but he is losing profit to the sliding dollar. We have found buying opportunities but missed them due to fears of a falling US$. WE have been in a game on investopedia called $1000000 US and canadian dollars. This game has helped us to look into stratagies that allow for investment accross the boarder to take advantage of the larger market down south. The value investment stratagey limits the options for hedging but one we have found that works well is ETF's that hold foreign equities. Another is investing in Canadian companies that report in CAN$ but trade on the US exchanges. The second strat has worked really well for me in the game because I was able to take advantage of a dip in the markets and a rise in the US$. I had made gains around 20% in the US$ account in less then 2 months but have dropped 5% recently when I started using options. Anyone got any advice to add please do.
Joe
The CAD is expected to continue to appreciate against the USD:
1)Sustained high oil prices
2)Net foreign investment
3)Budget surpluses: 7 years in a row
4)Bank of Canada hiking rates: At like what, 3.5% now?(discount rate) Hiked two days ago
5)Conservatives(though minority) Tax cuts may push markets upwards and attract foriegn capital
However, a strong CAD is bad for the Can economy, as Canada is heavily based on exports.
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