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Old 01-05-2016, 07:59 PM   #1
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Question Investing in 'Loonies'

after reading a thread on it being a great time to visit our neighbors to the North, due to the favorable exchange rates, i was curious if there is a good way to profit by buying Canadian currency and holding until the value rises ?

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Old 01-05-2016, 09:07 PM   #2
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You could try it, not really worth while unless you're doing 10s of 1000s of $. There is some amount at which you can manage to get lower exchange rates, you'd have to check with your bank. There is actually a system behind what you're suggesting, had it explained to me once several years back. If you get serious about it, I'd suggest getting educated on it.

Here's my take on the loonie, but I'm no investor or currency expert.

I moved to Canada when it was 60c to the US$ back in 2001 (everything was soo cheap here!) A couple years back it was $1.10 to the US$, coinciding (I believe) with oil prices, and going to the US was great. I expected it to settle around 85c. Today, 71c, kinda sucks to be in Canada from that perspective. I've read an article or two that say oil prices wont rebound to that level till 2020/2022, so you may have to wait that long for the loonie to rise enough to get a return.

Over a pure currency exchange game; if I were in the US with a chunk of money to invest, I'd consider real estate in Canada. You have a great exchange rate and the major markets are propped up by foreign investments (easier done in Canada than the US). As well, Canada has a stricter banking system than the US (we didn't suffer near as bad as the US with the real estate bubble). If the Canadian dollar explodes again, you can sell and really make a win. If it doesn't, you still would probably have a reasonable return, much better if you can also rent out the property. The flip side, the weakness of the Canadian market is also the foreign investment...if that stops I'd worry about a sizable correction since most Canadians cannot afford the major markets.

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Old 01-05-2016, 11:05 PM   #3
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Canada is basically a petro-state, so when the value of oil rises, the loonie will probably rise, as well.
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Old 01-06-2016, 03:57 PM   #4
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Google currency swaps and swaptions. Not for the faint of Heart.
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Old 01-06-2016, 05:30 PM   #5
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How long does it take you to get to Georgian Bay? I'd buy a cottage and use it.
Cameron & the Labradors, Kai & Samm
North Vancouver, BC
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Old 01-06-2016, 05:47 PM   #6
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In this crazy world, I don't know if anyone really knows what the future holds for the return to higher priced oil.

Aren't they saying now that those in OPEC who created this situation with intent to force US and Canadian Oil companies under are now feeling the pinch themselves from the low prices?

And if this is so, may the situation not reverse sooner rather than later?

Probably just wishful thinking on my part hoping see my portfolios recover and the Canadian dollar back up so I can better afford our US trips!

Oh well, we continued our US trips when we were down to nearly 60 cents and I suppose we still will - just fewer restaurant meals when away, and less spent to bring home stuff that we don't really need if truth be told!

Brian & Connie Mitchell

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2008 GMC Sierra SLT 2500HD,4x4,Crew Cab, Diesel, Leer cap.
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Old 01-06-2016, 09:57 PM   #7
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You make some good points Brian. The exchange is brutal but it does not stop us from going. Eat out less and take advantage of the reduction in fuel costs. In our case, gas is one of our biggest costs when traveling, so having it 30-40% less helps big time.....


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