Dow At 22,000, US Stocks UP 20% , Not In Your Consolidated Canadian Portfolio

Sorry for the bad news folks, I hope your advisor has been keeping you up to date on your portfolio (if you live in Canada), because despite the advertised returns, 

the US$ recent 10% decline against the $C has wiped out a great deal of those returns for those of you who have consolidated portfolios that are converted back to $C. You may see some declines in your total portfolio in your July statement.

The S&P 500 ETF (SPY) in $C terms has only returned a little over 7% in the past year vs. the over 20% return in $US.

The Canadian Bond Index ETF has returned a -2.5% return.

That will not be good for those of you fully invested in a 60% equity, 40% fixed income portfolio (with exposure to the $US).

Even if you own a hedged  S&P 500 ETF like the Vanguard (VFV)

It has returned only about 7 3/4 % over the last year.

As we discussed in detail on our weekly client webinar last Tuesday, the historically sound correlations between stocks and bonds are no longer giving you as much risk protection as you had in the past.

It is why we feel the need to be tactical is so important.

We have been underweight US stocks and underweight $US.

We changed that a little last Friday when we bought $US at a nice 10% discount from its recent high's vs. the $C.

That is an enormous advantage to our clients: now we have $US to make purchases of US stocks when they get cheaper. In all likelihood, at the same time the $C will likely lose some of its recent strength, but we will already have $US in our and our clients accounts and won't have to buy the more expensive $US.

Fully invested buy and hold portfolios are fraught with risk that many don't fully appreciate.

We do.