Today US central bank raised interest AGAIN!
Maybe we should only have US$
But just having it in cash is quiet a waste unless one is ready to trade at the moment.
If you are not in a hurry having US$ equivalent in one or both of the below categories can be considerred
1. US$ currency ETF (dlr.to and dlr.to.un). No interest but it moves real time with the exchange rate
2. US$ ISA with your brokers such as RBF1003, RBF1500 and CIB483 and many others
They currently give 2% and above interest.
Downside - You actually need US$ to buy. So whatever the exchange you do on that trading day is the $ amount you end up with.
Are these funds offered in all the major Canadian on line trading platforms?
I have always found it hard to look up Mutual Funds symbols in these systems.
Unless I should deal with financial advisers?
ETF's are not Mutual Funds.
They can be easily looked up like any stock symbol.
So if you go to the right place on your trade platform - trade stocks/ETF, should have no problem for example finding "dlr.to"
Those ISA funds can be bought or sold under on your trade platform - trade Mutual Funds.
For neither, should you have to go to a financial adviser.
All those ISA funds have their own financial adviser versions. That is why Series F version usually offer higher interest rate than Series D funds as financial advisers normally take .25 commission.
As consumers you will end up the same holding either.
If you already are a self directed trader, there is no need to go to a person.
Also it's more flexible to be able to buy and sell anytime as you wish.
Do pay attention to settlement date. Stock as settlement for ETF's and Mutual Funds are all different.
If you try to buy something with unsettled fund you will be charged interest by broker. And I am not talking about "regular" interest. It is usually 10% above.
Now with the new NAFTA or USMCA, US$ trend gets more complicated.
One thing though looks for sure is that the interest rate will keep going up on both sides.
So how much and how to hedge the currencies should be calculated according to individual's situation.
Questions to ask:
What percentage assets you already have that in USA? such as your house. located in which side of the border?
Are you bringing in monthly income in CAD or USD? Not just salary. Rental income?Stock dividend?
