You could consider buying Canadian company ETF or mutual fund with a notional currency hedge, this way you are buying during strong USD and will experience gains if the Canadian dollar rises as the value of the assets will rise as the currency hedge is only notional.

I think it comes down to your investment style and what currency you want to spend most of your money in. Also which market you experience better success in. I have always been able to hit higher results with US companies than Canadian, and with our socialistic anti-economy leadership it is hard to find strong long term buys, and many of our mature companies are at risk of having profit margins reduced at the same time regulation reduces growth prospects, again leading me down south to enjoy gains of a less social and more capitalistic run economy.

I also expect the commodity supply/demand to reverse, potentially pushing some lower than prepandemic levels. This will be detrimental for the Canadian dollar as we are very commodity based. As the home rush does out, and less lumber and oil are consumed it leaves our country disadvantaged globally. Being logistically tied to the US with disadvantages relative to the rest of the world we have very little competitive advantage compared to the rest of the world and will be pushed around by big US money and companies (recent past- think of our oil going to them for $20-30/barrel, just for them to resell it globally for more…)

Most of our portfolio is US companies in US dollars. Likely we will take many holidays that allow us to spend the USD without converting, but there will be times over the next 5-10-15-20 years where I will convert some back to Cdn at favorable times as this is where I live and spend most of our currency. I could also find many nice climates and places to live half the year in the US when we retire.

Summary? Position for your best market opportunities and your personal spending cycles! Keep some flexibility on each side for those uncertain periods so you can hold assets long run to gain in multiple areas

This post should help answer your questions – cheers!

https://milliondollarjourney.com/capital-gains-tax-when-converting-currency.htm

do you have to pay capital gains tax when you convert the usd to cad at 1.4? or do you pay tax when you convert the other way ? or both ways ?

Hi Debbie thanks for this note. If you received the inheritance in USD and you spend in CAD you’d want to see the value of USD to go up as that’s the currency you hold. For example, the USD/CAD is currently sitting around 1.31 meaning you can convert 100,000 USD to 131,000 CAD today. If the value of the US dollar goes up, it carries more weight. Meaning the exchange rate my go up to 1.35 and now that same 100,000 USD would equate to 135,000 CAD. Hope this helps!

Very interesting this currency usd/cdn
Enjoyed reading your info
I’m Canadian & inherited 100000. Us
Just can’t wrap my head around wether it’s better the usd goes up or down
Or vise versa for cdn
Could you shed some light on this
Thanks Debbie

Add it to the list of things to add to your dual radar! 😉 There are some currency hedged ETFs and some global ETFs. I prefer VDU for my international exposure up here

Happy to help! It’s definitely not a crystal ball!

Hi Court and Nic! Thanks for the reply 🙂 Actually I gave your blog post and comments some thought and I decided to continue investing in the USD instead of investing in CAD. Like you said, it’s a really strong currency and everyone’s highly dependent on it, so it seems like a better idea to invest in USD. Also it’s cool to learn that you guys invest in USD even though you earn in CAD 🙂 Thanks so much for all your help and comments!

I’ve considered the AUD before but I don’t think it’s any more closely tied to SGD than CAD. (I could be very wrong though.) But I’m a bit reluctant because I’ve seen people get so burnt in this recent depreciation of the AUD. I don’t know whether it’ll keep spiraling or get stronger again, you know? Thanks for the suggestion though!

I do earn in CAD so any new money I’m investing is in CAD at this point 🙂 but when we were living in the US I was earning in USD so a majority of our funds are in our US accounts in USD. Since we still have some USD cash in our US accounts, I was converting some of it to CAD when I could get a 40% exchange. It’s now at 1.34 (34%) so I’m holding off for now. Have you ever looked into the Australian dollar since it seems to be close to 1:1 exchange rate to the Canadian dollar and likely closer tied to the Singapore economy?