Investing

Anyone else got hit hard with CAD in the last 2 weeks?

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  • Jul 18th, 2017 1:45 pm
[OP]
Deal Addict
Jan 21, 2014
1824 posts
408 upvotes

Anyone else got hit hard with CAD in the last 2 weeks?

our non-registered accounts only contain U.S. Stocks. Our registered accounts have 50% U.S. securities and the last two weeks, the CAD just wiped out most of our gains and some. How would you go about hedging this?
18 replies
Deal Addict
Jul 11, 2008
3882 posts
1206 upvotes
um. you were hedging already if you had 50% of your port in US stocks. i assume you alllocated some to canadians stocks, intl stocks as well. that's all taken into consideration.
Sr. Member
Dec 3, 2014
775 posts
111 upvotes
mkl38s wrote:
Jul 14th, 2017 3:05 pm
our non-registered accounts only contain U.S. Stocks. Our registered accounts have 50% U.S. securities and the last two weeks, the CAD just wiped out most of our gains and some. How would you go about hedging this?
The CDN "rally" is hardly even a move. You don't need to hedge anything. Pull up a chart for the CAN/US exchange. Other than a slight increase recently, it is basically flat as a board YTD.
Newbie
Dec 8, 2013
22 posts
4 upvotes
I keep about 35% of my portfolio in $USD, fortunately the rise in rate reset preferred shares have mostly offset these losses. I guess it worked out as kind of a hedge, but hedging was not the reason I bought the preferred shares.
Deal Addict
Jul 18, 2016
1496 posts
505 upvotes
llpresident wrote:
Jul 14th, 2017 3:16 pm
The CDN "rally" is hardly even a move. You don't need to hedge anything. Pull up a chart for the CAN/US exchange. Other than a slight increase recently, it is basically flat as a board YTD.
Depends on when he bought. I believe that earlier this year the USDCAD was as high as $1.40. Its now down close $1.26. That's a significant drop in his USD holdings with respect to CAD.
Sr. Member
Aug 19, 2016
575 posts
156 upvotes
I only have 50% of my portfolio hedged, so yeah I got hit pretty hard. I saw it coming but didn't hedge the whole thing.
I hedged at the 1.30 mark.
Jr. Member
Feb 26, 2017
136 posts
32 upvotes
I've really ramped up my us holdings this year so it does kinda sucks to watch the converted balance go down. I need to think of it from a long term point of view :). Eventually I'd like to get to 50/50 Can and US.
Member
Aug 7, 2014
260 posts
67 upvotes
A big portion of my holdings is in US stocks, mostly not hedged. I was a benefactor when the C$ dropped from $1.10 to 69 cents, and now 79 cents. The C$ has gained about 7% in last 3 weeks, and my portfolio is 4% below its all time high reached about 4 weeks ago. Overall, my portfolio is still ahead YTD.

The Canadian TSX has been flat this year, vs the US exchanges:
Cdn TSX - 0.69%
S&P 500 +9.6%
NASDAQ +13.5%

A portfolio manager from TD Waterhouse mentioned on TV two days ago that the C$ is in the trading range between 69 cents and 80 cents in last couple of years, and he expected it to drop down soon.

Someone here mentioned about the canadian economy and C$ in this forum some days ago, and I tend to agree with him: "Overall, you have to bear in mind the outlook for the Canadian economy isn't great. Private debt levels to GDP are off the charts. A lot of our economy is RE-dependent which is looking on shaky ground right now. We have multiple levels of government running huge deficits, and in Ontario's case - with a crippling carrying cost. Oil is showing no sign of hitting previous highs. Butts' policies left Ontario with several credit downgrades, there's no reason why it can't happen federally. If you stick it out for the long haul, the long-term trend is CAD to get weaker."

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"The big money is not in the buying and the selling, but in the waiting." - Charlie Munger
Deal Fanatic
Mar 24, 2008
5060 posts
1143 upvotes
Toronto
My RRSP is 100% USD based and I didn't notice my long term gains being "wiped out", did you recently start contributing?

USD/CAD has gone from ~$1.35 to ~$1.26 in the last couple of weeks and it's hardly earth-shattering. Hedging will most likely cost you more money than these fluctuations will over the long term. Stay the course.
Illegitimi non carborundum
Newbie
Jan 13, 2008
85 posts
25 upvotes
I am about 15% USD so the rise of the CAD is clearly noticeable. I have not bought USD since 2012 but if we get to 85 cents and beyond I will start purchasing USD again for the first time in 5 years. :-)
Deal Fanatic
User avatar
Oct 23, 2003
6367 posts
597 upvotes
Sold off all my USD cash when CAD was around 74c a while back. Didnt make that much on it, but a small profit was better than none. I'd expect CAD to hit 83 cents late next year if the BoC keeps to their rate promises and economy keeps chugging along
Deal Expert
Feb 11, 2009
15607 posts
1702 upvotes
Toronto
Portfolio took a near 10% hit these last few weeks due mainly to the dollar. Majority of my funds are in USD. Was really hoping for a miracle that the BOC didn't raise rates last week. 92% chance priced in meant little room for it to go up further, but a lot of room for it to come down crashing.
Selling Grizzly Privy Maple Leafs - $33 ea - PM!
Newbie
Jan 6, 2015
20 posts
Scarborough, ON
ksgill wrote:
Jul 15th, 2017 1:28 pm
My RRSP is 100% USD based and I didn't notice my long term gains being "wiped out", did you recently start contributing?

USD/CAD has gone from ~$1.35 to ~$1.26 in the last couple of weeks and it's hardly earth-shattering. Hedging will most likely cost you more money than these fluctuations will over the long term. Stay the course.
I did contribute recently, and get hit hard. 40% US portfolio, US market goes up, strong CAD wipe them out.
[OP]
Deal Addict
Jan 21, 2014
1824 posts
408 upvotes
Half of my USD were from dotcom days where I paid like 1.5x for them. The other half were from buying my company stock (USD only) with 10% of my income for the last 13+ years, so some of them were exchanged < 1x at some points even. The thing is once I got USD, I rarely convert them back so I ended up quite a bit. Last month, I was planning to convert some to pay some bills, so I bought 10K DLR.U and journaled to DLR for ~$1.36. But I listened to some analyst(s) saying CAD would go down further due to high debts, weak oil price and NAFTA renegotiation. So I waited, now it shows a loss of $1,100 already so I probably will journal it back and eats the $20 commission and buy US stock or just leave it there till a better day to sell. BTW, any of DLR or DLR.U pays any dividend if I hold it?
Deal Addict
Dec 6, 2006
3519 posts
589 upvotes
Toronto
VFV, VUN down over -6% in the last 5 weeks, while the currency-hedged counterparts are actually up slightly.... gosh Face With Stuck-out Tongue And Tightly-closed Eyes
Also have MAW150, and other US and Intl MF that are down quite a bit due to currency.

Well I guess look at the bright side, perhaps finally I can buy some USD to directly invest in US stocks.

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