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ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

January 18, 2016 | Tumbling Loonie strategies

Adrian Mastracci

Adrian Mastracci, Discretionary Portfolio Manager, B.E.E., MBA. My expertise in the investment and financial advisory profession began in 1972. I graduated with the Bachelor of Electrical Engineering from General Motors Institute in 1971. I then attended the University of British Columbia, graduating with the MBA in 1972. I have attained the “Discretionary Portfolio Manager” professional designation. I am committed to offering clients the highest standard of personal service by providing prompt, courteous and professional attention. My advice is objective, unbiased and without conflicts of interest. I’m part of a team that delivers comprehensive services and best value in managing client wealth.

Our Loonie has been falling to under 70 Cents against the US Dollar.
Recall it climbed from near 86 cents in mid-2009 to over parity.

One US Dollar is now valued near $1.45 Canadian.
The biggest portion of profit is currency appreciation.

Many market forces, such as currencies, are well beyond investor control.
Currency adds yet another potential hazard or reward to a nest egg.

Of course, currencies are extremely hard to predict.
They can also move very quickly in either direction.

Treat currency as an investment with longer time horizons.
Those with US cash and/or US portfolio may consider the merits of selling and converting to Canadian Dollars.

Another investment area to revisit is selling US real estate owned and also converting to Loonies.
Some candidates may be the US cottage, condominium, business premises and time share.

It is important to establish the US and Canadian tax cost of proposed US transactions before taking any action.
It may also make good sense, depending on account values, to convert on more than one occasion.

Other considerations:

Canadians who spend US$ cashflow may not be concerned about currency moves.

Long term investors who already have US cash may add to their asset mix, say the S&P500 or Dow Jones.

Some investors may have US stocks in loss positions, but profitable after selling and converting.

Buying oil/energy in Loonies is a form of hedging.

Converting Loonies to invest in US$ does not make sense for the majority.

Canadians should consult a cross border tax professional to become aware of US reporting requirements.

Overall, ensure that any currency action taken fits in within the goals of the personal roadmap.
Once your decision is made, move forward and don’t look back — no second guessing.

Best,

Adrian

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January 18th, 2016

Posted In: Adrian Mastracci Blog

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