A Currency Play Profit Opportunity
Monday, September 24th, 2007
By Michael Lombardi, MBA for Profit Confidential
It’s a bird…it’s a plane…no, it’s the Canadian dollar taking flight! This past week, the Canadian dollar hit parity with the U.S. dollar and, as I write this column, the Canadian dollar is trading above the U.S. dollar. The last time the Canadian dollar was worth more than the U.S. dollar was 31 years ago, in 1976.
Over the last three years I have practically begged my American readers to buy quality stocks on the Toronto Stock Exchange because not only were Canadian stocks undervalued, but also so that Americans could take advantage of the rising value of the Canadian dollar-a double profit whammy so to speak.
Yes, Canada is rich in oil, resources like timber and precious metals, but the real story here is not that of a strong Canadian dollar. Rather, the story is that of a weakening U.S. dollar.
A few years ago, I co-authored a report about Greenspan’s secret plan to put America back on top. That secret plan was simply to devalue the American greenback against other world currencies so Americans would stop buying cheap Chinese imports and start buying made-in-America goods again. A weaker currency also makes a country’s deficit and trade gap easier to manage.
Canada is a strong political and economic country (with some provinces actually running a surplus as opposed to a deficit). But Canada’s currency has only fared well against its neighbor to the South. The Canadian dollar has not performed well against the euro and other European currencies like the pound.
How will this story unfold?
I see the Canadian dollar continuing to move higher. No, it will not be a straight run-up. Nothing ever does move straight up or down. There will be ups and downs, but in the long term the Canadian dollar will continue to appreciate against the U.S. currency because I believe the U.S. is focused on lowering the value of its currency against major world currencies.
The opportunity for Americans to get into quality Canadian stocks, especially the big, well-known gold producers, and to profit from the escalation of the Canadian dollar against the U.S. dollar continues.
Next Post: Why Fed Fund Rate Cut Could Be a Good MovePrevious Post: Parity Achieved. Now What?
Tags: euro, gold producers, U.S. dollar
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Michael bought his first stock when he was 17 years old. He quickly saw $2,000 of savings from summer jobs turn into $1,000. Determined not to lose money again on a stock, Michael started researching the market intensely, reading every book he could find on the topic and taking every course he could afford. It didn’t take long for Michael to start making money with stocks, and that led Michael to launch a newsletter on the stock market. Today, Michael only employs the top market analysts and editors. Some of our recommendations have posted gains in excess of 500%! Michael has authored and published over one thousand articles on investment and money management. Along the way to building Lombardi Publishing Corporation, now with over one million customers in 141 countries, Michael became an active investor in real estate, art, precious metals and various businesses. Readers of the daily Profit Confidential e-letter are offered the benefit of the expertise Michael has gained in these sectors. Michael believes in successful stock picking as an important wealth accumulation tool. Married with two children, Michael received his Chartered Financial Planner designation from the Financial Planners Standards Council of Canada and his MBA from the Graduate Business School, Heriot-Watt University, Edinburgh, Scotland.Follow Michael and the latest from Profit Confidential on Twitter
