March 7, 11:20 am eastern

(I was unable to make my usual post last evening due to a very rare server problem on the telus system where this website is hosted.)

Canadian Western bank was out with a good earnings report this morning and increased the dividend by 4% which was in addition to an earlier 4% for a total increase of 8% over last year. Loan loss provisions were up by a very small amount. The stock is down 1.0% despite the overall positive news. This could be explained by the general negative tone in today’s markets or just the fears of a slowing Canadian economy. The market does what it does with stock prices. If CWB can continue to deliver earnings increases and growth over time then the stock price must eventually follow.

With the lower Canadian dollar yesterday, I thought of moving some U.S. cash back to the Canadian side. I had some U.S. cash in my corporate investment account and I have started the process of moving that over using the Norbert Gambit which I mentioned many times. The first step was to use the cash to buy DLR.u which is a fund of U.S. cash that trades on Toronto. The same fund of U.S. dollars trades in Toronto in both U.S. dollars (DLR.u) and Canadian dollars (DLR). Now that I have bought DLR.u in the U.S side of my corporate account I will wait a couple days until it “settles” and then ask TD Direct to journal it over to the Canadian side (I will check because I may be able to do that online now rather than calling) where I can sell the U.S. dollars in Canadian dollars as DLR. If I was eager to lock in the exchange rate, TD can journal it over without waiting the few days but there is a charge of around $45 U.S.. So, I just decided to wait until it settles and take my chances on the exchange rate.

Another reason I wanted to move this corporate cash was to stay under $100,000 Canadian worth of U.S. assets in my corporate account. Going over $100k Canadian worth of U.S. assets triggers reporting requirements with Canada Revenue. I have found that Turbo Tax corporate did a poor job of helping meet that reporting requirement in the past and there are penalties if it is not reported properly. Unless I wanted to have well over $100k in U.S. assets it does seem worth the bother and I am going to stay under $100k for now at least. There is a similar reporting requirement for individual investment accounts but not for the RRSP accounts. Therefore, if we have over $100k in U.S. investments it is far simpler to keep that in the RRSP account. In addition to the having to report being over the $100k, the tax reporting requirements just to deal with exchange rate fluctuations in any taxable U.S. account that Canadians hold are tedious especially if you do any amount of trading. On, that basis it may be best to try to keep all your U.S. investment cash and securities in the RRSP if you are in a position of having an RRSP that represents half or more of your total investments.

I will also mention an interesting aspect of my trade to buy DLR.u. Yesterday I placed the trade to buy an amount of DLR that was not in even hundreds. I was buying XX70 shares. I decided to get a bit cute and not pay the offer which was $10.08 per DLR. Instead I made a limit order at $10.07. These units are extremely stable so the price does not fluctuate more than about a penny over short periods of time. Anyhow the trade for even lots went through so I got XX00 shares at $10.07. But the trade for the left over 70 shares did not go through. I canceled that today to avoid paying a $10 fee on $749 worth of DLR. Not a big deal if I had paid the $10 but it was interesting to see that the odd lot did not go through. In my experience most of the time odd lots are traded easily. Certainly if I had bid the offer at $10.08 it would have gone through.

Scroll to Top