Hey there. One could definitely argue that it is justifiable to buy CDRs of US companies at this point in time in order to offset any potential increases in the Canadian dollar. We are weaker here than historical averages. Typically the dollar hovers anywhere from $0.73 to $0.75. So, purchasing USD right now would result in a high single-digit FX loss if the dollar does return to the $0.75 mark.
I am still buying USD, but not as aggressively as I once was. I used to contribute weekly to my portfolio and utilize half of that amount of buy USD. Now I'm maybe doing that once a month and the remainder is in CAD.
It is difficult to say on a currency conversion standpoint because if tariffs somehow come back into play in March, our dollar will no doubt get weaker. However, if we somehow dodge any tariffs, I could see it strengthening.
I would be a tad reluctant to convert a large amount of capital to USD at this point in time. If I were planning to buy USD, I'd probably deploy a dollar cost averaging strategy into the currency over the long-term. When the dollar was at $0.83~, I converted a large portion of my portfolio to USD, but now that it is in the high $0.60 range, I'm certainly slowing down my purchases.
As you mentioned, over the long-term you will likely absorb these FX losses if they do exist by the overall returns on your stocks plus buying more USD at higher levels. Even a 10%~ move in currency over a 10-15 year timeline is often an afterthought if the markets do return 8%~ annually.
It is a personal decision really.
Posted by Anonymous