Loonie and buying power soars

These are good times for the Canadian dollar, which means it’s also an excellent time to review your U.S. investment strategy. Here’s how to take advantage of the opportunities created by the strong loonie.

Invest in the U.S.

Whenever the Canadian dollar rises above parity, U.S. securities are available at a discount. This means your Canadian dollars buy more, creating an excellent opportunity for investing in the U.S. Looking long term, the investments you buy today may be worth more if the U.S. dollar appreciates in the future.

Opportunities in the U.S. markets are promising and we can screen the markets by targeting companies that benefit from the U.S. dollar’s weakness against many global currencies. This makes their goods cheaper internationally, helping drive their sales, profits, and share prices.

If you hold, or intend to hold, a significant number of U.S. investments, you may be able to structure your portfolio to reduce the costs of investing in the U.S. by means of a U.S. dollar account. Investments and returns remain in U.S. funds until you transfer cash back to your Canadian-dollar account, giving you more control over when to convert returns back to Canadian dollars.

Explore other goals

The strong Canadian dollar can potentially make other financial goals more reachable. If you’ve been thinking about buying property in the U.S., low house prices combined with a high Canadian dollar could present an attractive opportunity.

If you have any questions on this topic or would like a review of your current financial plan, please call 778-478-9759, or e-mail [email protected].

This column is presented as a general source of information only and is not intended as a solicitation to buy or sell investments, or life insurance, and should not be taken as providing, investment, financial, legal, accounting or tax advice.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.