It is not market timing for an investor to adjust their portfolio in response to changes in their investing timeline.retireat50 wrote: ↑
So in other words, market timing? Think of the tax implications as well for someone holding hundreds of thousands in xaw at time of retirement. It's not feasible to do what you propose.
If the holdings are in tax-deferred or tax-exempt accounts there would not be any tax implications. In a taxable account they could spread the change over several years, depending on the amount of capital gains that would be realized, to manage any change in marginal tax rate. It's called planning.
International investors are not currency traders. They have currency exposure, for diversification.retireat50 wrote: ↑
So if you had a million in this stuff just a 25,000 currency impact or about 10 times the management fee. Yup no big deal. Anyone who buys xaw is a currency trader by default. That's fine, it's your choice just be aware of how fx will impact this investment
Imagine 2008 scenario where cad goes to par or more vs usd. You would be down 30 percent on fx and down 40 or whatever we ended up down on the stocks themself in those dark years. Nearly wiped out if you had saved for decades
You are suggesting a hypothetical situation where the C$ would rise against all of the >20 currencies of the countries of which XAW holds securities, at the same time as global stock markets dropped 30-40%, and at the same time the investor needed to sell all of their holdings, thereby wiping out decades of savings? An intelligent investor would not hold 100% of their portfolio in ex-Canada equities if there was any chance of needing to cash out all of it in the near future. Smart investors align their portfolio holdings with their risk tolerance and investing timeline. It's called planning.
XAW is up 12.41% YTD as of Oct 22. I suppose with 2.5 months left this year there is still time for it to "get hammered". But investors with broadly diversified holdings would not be worried over the long term.retireat50 wrote: ↑ Anyone expecting a positive return on CCP this year is delusional. Your beloved XAW will get hammered with rising CAD$ (fairly obvious why oil will rip higher in the next 3-9 months). US markets still very over-valued and bonds will decline with 1-3 rate hikes in 2019.
When I was young, I was poor. Now, after years of hard work, I'm no longer young.