January 22, 2014 Comments

On Wednesday the S&P 500 was up 0.1% and Toronto was up 0.3%

The Canadian dollar declined approximately one cent which benefits Canadian investors how have U.S. investments (at least as measured in Canadian dollars, that is. It’s not of much consequence for Canadian that consider their U.S investments to be permanently in U.S. funds to be ultimately spent in the U.S.) Americans who own Canadian investments are hurt by the decline and must wonder why they invested in Canada or why they did not sell a while ago.

I bought a bit more of the Canadian dollar ETF under symbol FXC on New York. This basically locks in some of my gain on U.S. cash and investments. My strategy is to buy a bit more FXC with every cent the Canadian dollar drops. So far this hedge has cost me money as the Canadian dollar keeps dropping.

Lately it seems like everyone is predicting the Canadian dollar to keep going down. I find that interesting that people are so smart not to have guessed at 92 cents it would keep going down. Where were these same people when our dollar was closer to par? If they are such great forecasters they could have made a fortune on currency bets. I doubt that people can really forecast the movement of currencies. I just react to the movement, buy more Canadian dollars with my U.S. funds as they get cheaper and with the idea to buy back into U.S. funds if our dollar climbs. And I am only nibbling at it, not making any big bets.

Turning to our Stock Picks, Toll Brothers had a strong day rising 2.1% on news that it was making an acquisition of a large and attractive parcel of land in Houston. Overall it was a positive day for most Canadian investors mostly due to the lower dollar.

My order to buy some Bombardier preferred shares (mentioned yesterday) did go through today at $21.80. It’s interesting that the order sat there for a month and it just happened that the price finally fell that low on the day that order was going to expire. Sometimes (but not always) it pays to be patient or to cheap out a bit when placing orders. Of the course the shares could fall even further given Bombardiers woes or if interest rates rise. But it’s still better to have bought at $21.80 than to have paid the higher prices that prevailed all January until now.

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