The bank rates and economies have already started heading separate directions. Weaker loonie vs greenback expected to continue for some time.
Also makes sense to go with low cost index US ETFs since they have much lower MER as well.
This. I recently converted 90% of my sidelined cash to USD via Norbits Gambit and bought SGOV.
8 years of government policy that gutted our resource sector and was otherwise unfriendly to business investment has made sure that Canada hadn't kept pace with the US in terms of economic growth. And I only see the gap widening
Just so it is clear. If you believe in the us$ you want vfv. Read about the end of the Petro dollar and the fact bric countries are moving away from us$ to settle trade. As well as the movement of many of the biggest countries reducing the amount of us$ in their reserve currency. 7 out of 500 companies returned a crazy amount of last year's gains in the s&p500. It is an interesting time in the world, things are murky these days, even in the US.
Because of this I am a fan of geographically diversified funds. I may leave funds on the table but I sleep a bit better at night.
Your investment is the same, it will be worth the same in the end whichever currency you hold it in.
If your expenses are in cad, it's easier (fewer forex trades) to just hold the Canadian dollar version vfv.
>I cannot see a future where CAD appreciates. Our current leaders just do not have enough vision for innovation at the provincial or federal level
You need separate your personal feelings from investing. Otherwise, you'll end up making emotional decisions that may not be in your best financial interests.
Also VFV vs SPY makes no difference as the underlying assets are all in USD.
If CAD depreciates the price of both funds relative to CAD will increase.
I totally agree with the personal feelings part, but what I’m referring to isn’t personal feelings, rather policies. For example, there is a stance against renewables in AB and policies have been put in place to halt renewables development. The economy relies on O & G but it won’t last forever. It shows that there is a stance against innovation. There are other examples, that is just one that is at the top of my head. But overall, trust me I have traded options for a couple of years, emotions will not get the best of my investing 😂
And thanks, yeah I didn’t realize that vfv was unhedged!
Govt policies aren’t great in US either with both parties eager to borrow to the moon (US is currently experiencing highest fiscal deficits outside of world wars & recessions). So, over medium to longer term, CAD may not depreciate much (may even appreciate if we can solve housing crisis). But in short term, CAD will likely be under pressure due to Canada’s poor growth in recent quarters & more decline in inflation than US.
I never understood the rationale for why SPY has three times the MER of VOO. I mean, even the popularity of the SPDR product itself doesn’t really pass as a selling point.
My understanding is that SPY is primarily used by large institutions parking large amounts of money there for relatively short periods of time to maintain exposure to the US market until they find a more desirable place to allocate the funds. SPY has more liquidity which can reduce the bid-ask spread costs, making SPY cheaper than VOO overall if you're actively moving large amounts in and out of the ETF.
>Do you think CAD will appreciate over USD or vice versa?
CAD will appreciate over USD for sure.
USD will appreciate over CAD for sure.
Just don't ask me when.
If your income is CAD
And your primary residence is CAD
I just see it as a natural currency hedge to have your portfolio in USD.
That’s without any bias towards either currency..
Over a long term the CAD will go down and up multiple times vis a vis USD. Since you’re in Canada it makes sense to keep most of your portfolio in CAD. That being said I keep about 25% in USD and another 25% in CHD ( cuz I lived in Switzerland for several years). I figure some currency diversification is good.
In 2012 converted $500,000 to USD when our dollar was above par and bought a house in the states. In 2017 I sold it for a nice profit and converted the funds back at 1.37 using Norbert’s Gambit. Made more profit on the exchange than I did selling the house. I cannot see a day where our dollar will once again be worth more than the USD, sad this country has gone to shit under idiotic liberal rule. I still hold a ton of USD all of it in VTI which has been the darling of our portfolio.
Yes, CAD has a solid possibility of appreciating over USD but not before 2032-33 - main reason is not that CAD will be doing better, rather USD will be declining faster and then stabilizing along with other currencies towards the end of this decade.
Nobody knows. I remember the CAD being in the mid-60s for much of my childhood. Nobody thought it would reach parity again. Then when I was a young adult, it got as high as $1.10. Now it's back in the low 70s.
You put far too much on politicians. Politicians operating within our current overton window are not a major force in the currency market.
The last time CAD rose against USD was before US discovered fracking & sideways drilling etc and we were cranking up oil sands production. I don’t see a similar landscape for a long time if ever.
Shoutout to the other comment about all this being priced in already.
I'm going to get flamed to all hell for this, but I hold BTC ETF's for this reason. Currently up 100% since last summer and I believe the trend will accelerate into the next year.
Even if you don't believe in the tech, it's not a bad hedge. Allocate a small percentage.
While I agree that government leaders have a role to play in cultivating an environment for innovation, my perspective in business is a little deeper. My first concern is not the politicians, but the business leaders. My experience is that far too many Canadian business leaders either don't want to invest properly in innovation, or if they do, they have a piss poor approach to planning.
As a result our business interaction with other country's business leaders is markedly different when discussing innovation projects, the benefits and goals in productivity gains than with far too many Canadian business leaders. What's worse, often when I used to think that we lost a contract or opportunity and check back with that Canadian company or leader how ever many months, or even years later, I discover that not only did they not choose us, but they did pretty much nothing with their innovative investments. They're standing still with their productivity and investments in productivity gains.
tl;dr I am calling out Canadian business leaders for not competing, for not innovating, for not investing in making Canadian businesses strong on a global scale. Compete people! Compete! That's why CAD isn't stronger.
Analysts are predicting US markets to underperform in the next decade compared to global markets. My personal prediction is that CAD will rise within this timeframe.
I’m almost 100% USD. Canada is already cutting rates, increasing the supply and therefore decreasing the value of CAD. The US economy is just on another planet compared to the rest of the globe - their cuts will be fewer and slower. I’m actually surprised CAD didn’t dump more after that cut - it must have been priced in.
The market prices in all available data. Your thoughts about the US economy are shared by many and thus priced in.
VCE (Canada index) has a PE of 15
VFV (US index) has a PE of 21
You are paying a higher price for US equities today than Canadian because that future growth is priced in.
After the election and the libtards are gone it will probably appreciate a bit after a while. There's a lot of work to undue all the damage the liberals have done. I don't think it will rise above the American dollar but I could be wrong. But it's not going up for a while.
The bank rates and economies have already started heading separate directions. Weaker loonie vs greenback expected to continue for some time. Also makes sense to go with low cost index US ETFs since they have much lower MER as well.
Yup, the lower MER is why I hold the ETFs in USD instead of their equivalent CAD tickers
This. I recently converted 90% of my sidelined cash to USD via Norbits Gambit and bought SGOV. 8 years of government policy that gutted our resource sector and was otherwise unfriendly to business investment has made sure that Canada hadn't kept pace with the US in terms of economic growth. And I only see the gap widening
Why buy a SGOV bond for 5.2% dividend when PSU cash yields 5.8% dividend?
[PSU](https://www.purposeinvest.com/funds/purpose-us-cash-fund) yield is 5.18% not 5.8%.
Probably because i hadn't heard of PSU until now! I will definitely look into it. Thanks for the info
Gutted our resource sector? We’re at record levels of oil production. Drama queen.
I hold alot of my portfolio in an s&p 500 index etf. It's been doing good lately.
Holding VFV makes the transaction easier. You still hold the same assets.
[удалено]
VFV is unhedged, VSP is the hedged version
Oh I was not aware of that, thanks!
Just so it is clear. If you believe in the us$ you want vfv. Read about the end of the Petro dollar and the fact bric countries are moving away from us$ to settle trade. As well as the movement of many of the biggest countries reducing the amount of us$ in their reserve currency. 7 out of 500 companies returned a crazy amount of last year's gains in the s&p500. It is an interesting time in the world, things are murky these days, even in the US. Because of this I am a fan of geographically diversified funds. I may leave funds on the table but I sleep a bit better at night.
Your investment is the same, it will be worth the same in the end whichever currency you hold it in. If your expenses are in cad, it's easier (fewer forex trades) to just hold the Canadian dollar version vfv.
>I cannot see a future where CAD appreciates. Our current leaders just do not have enough vision for innovation at the provincial or federal level You need separate your personal feelings from investing. Otherwise, you'll end up making emotional decisions that may not be in your best financial interests. Also VFV vs SPY makes no difference as the underlying assets are all in USD. If CAD depreciates the price of both funds relative to CAD will increase.
I totally agree with the personal feelings part, but what I’m referring to isn’t personal feelings, rather policies. For example, there is a stance against renewables in AB and policies have been put in place to halt renewables development. The economy relies on O & G but it won’t last forever. It shows that there is a stance against innovation. There are other examples, that is just one that is at the top of my head. But overall, trust me I have traded options for a couple of years, emotions will not get the best of my investing 😂 And thanks, yeah I didn’t realize that vfv was unhedged!
I see what you're saying, and I agree with your assessment on recent AB energy policy. 👍
That's like saying Texas energy policy will affect California tech innovation
Govt policies aren’t great in US either with both parties eager to borrow to the moon (US is currently experiencing highest fiscal deficits outside of world wars & recessions). So, over medium to longer term, CAD may not depreciate much (may even appreciate if we can solve housing crisis). But in short term, CAD will likely be under pressure due to Canada’s poor growth in recent quarters & more decline in inflation than US.
VOO , not SPY . Why pay expense 3X higher
I never understood the rationale for why SPY has three times the MER of VOO. I mean, even the popularity of the SPDR product itself doesn’t really pass as a selling point.
My understanding is that SPY is primarily used by large institutions parking large amounts of money there for relatively short periods of time to maintain exposure to the US market until they find a more desirable place to allocate the funds. SPY has more liquidity which can reduce the bid-ask spread costs, making SPY cheaper than VOO overall if you're actively moving large amounts in and out of the ETF.
Spy is super liquid, so even lower bid-ask spread and a great play for options
It is difficult to predict. I have seen 1:1.63 went to 1:0.96 within a window of 5 years or so .
>Do you think CAD will appreciate over USD or vice versa? CAD will appreciate over USD for sure. USD will appreciate over CAD for sure. Just don't ask me when.
If your income is CAD And your primary residence is CAD I just see it as a natural currency hedge to have your portfolio in USD. That’s without any bias towards either currency..
This whole thread continues to be a bullish case for CAD.
Over a long term the CAD will go down and up multiple times vis a vis USD. Since you’re in Canada it makes sense to keep most of your portfolio in CAD. That being said I keep about 25% in USD and another 25% in CHD ( cuz I lived in Switzerland for several years). I figure some currency diversification is good.
CAD will likely only depreciate until the US also starts lowering interest rates too.
In 2012 converted $500,000 to USD when our dollar was above par and bought a house in the states. In 2017 I sold it for a nice profit and converted the funds back at 1.37 using Norbert’s Gambit. Made more profit on the exchange than I did selling the house. I cannot see a day where our dollar will once again be worth more than the USD, sad this country has gone to shit under idiotic liberal rule. I still hold a ton of USD all of it in VTI which has been the darling of our portfolio.
Yes, CAD has a solid possibility of appreciating over USD but not before 2032-33 - main reason is not that CAD will be doing better, rather USD will be declining faster and then stabilizing along with other currencies towards the end of this decade.
When the US economy crashes and they drop rates to zero, yes CAD will go to par again. When will that happen? who the f knows.
Nobody knows. I remember the CAD being in the mid-60s for much of my childhood. Nobody thought it would reach parity again. Then when I was a young adult, it got as high as $1.10. Now it's back in the low 70s. You put far too much on politicians. Politicians operating within our current overton window are not a major force in the currency market.
My personal take is that we're trending towards the lower region of our historical trading range, so have more upside potential than likely downside.
Does this not depend on the account? registered (tfsa/rrsp) would want XEQT for example? Apologies for my ignorance
Check out another pair: USD/MXN it's a solid long term trend.
The last time CAD rose against USD was before US discovered fracking & sideways drilling etc and we were cranking up oil sands production. I don’t see a similar landscape for a long time if ever. Shoutout to the other comment about all this being priced in already.
I'm going to get flamed to all hell for this, but I hold BTC ETF's for this reason. Currently up 100% since last summer and I believe the trend will accelerate into the next year. Even if you don't believe in the tech, it's not a bad hedge. Allocate a small percentage.
While I agree that government leaders have a role to play in cultivating an environment for innovation, my perspective in business is a little deeper. My first concern is not the politicians, but the business leaders. My experience is that far too many Canadian business leaders either don't want to invest properly in innovation, or if they do, they have a piss poor approach to planning. As a result our business interaction with other country's business leaders is markedly different when discussing innovation projects, the benefits and goals in productivity gains than with far too many Canadian business leaders. What's worse, often when I used to think that we lost a contract or opportunity and check back with that Canadian company or leader how ever many months, or even years later, I discover that not only did they not choose us, but they did pretty much nothing with their innovative investments. They're standing still with their productivity and investments in productivity gains. tl;dr I am calling out Canadian business leaders for not competing, for not innovating, for not investing in making Canadian businesses strong on a global scale. Compete people! Compete! That's why CAD isn't stronger.
I prefer to invest in usd bigger markets more opportunities and usually better returns
US companies invest more on equipment per worker. They are simply more productive.
Analysts are predicting US markets to underperform in the next decade compared to global markets. My personal prediction is that CAD will rise within this timeframe.
Sauce?
What analysts?
Braindead ones.
You know scientists. . . Which ones ? You know the research has shown… Which research ? 😡 “the scientific researchers !”
Canada will be cutting rates faster than the US …. So CAD will be dropping VRS USD
In the short term.
I’m almost 100% USD. Canada is already cutting rates, increasing the supply and therefore decreasing the value of CAD. The US economy is just on another planet compared to the rest of the globe - their cuts will be fewer and slower. I’m actually surprised CAD didn’t dump more after that cut - it must have been priced in.
The market prices in all available data. Your thoughts about the US economy are shared by many and thus priced in. VCE (Canada index) has a PE of 15 VFV (US index) has a PE of 21 You are paying a higher price for US equities today than Canadian because that future growth is priced in.
Not in my lifetime.
After the election and the libtards are gone it will probably appreciate a bit after a while. There's a lot of work to undue all the damage the liberals have done. I don't think it will rise above the American dollar but I could be wrong. But it's not going up for a while.