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Talking stocks, trading, and investing in general - Page 542

post #8116 of 11182
not sure if this question is going to get lost in the shuffle...

so I'm in Canada. Over the past year I've started gambling I mean investing in the stock market. All my money was in CAD, but as I've purchased stocks late last year and over this year, it's all been converted into USD. Now I'm starting to think a little longer term and I'm not sure if it makes sense to work on selling off my USA listed stocks, converting the cash back into CAD and then buying Canadian listed versions of as much as I can, or if there aren't Canadian listed versions of the stocks, then at least any etf funds. Obviously you guys don't know the future, but my point is if I changed money to USD when we had a better rate, and now that the USD is so high, am I getting basically an automatic 'gain' of 10-15% just by converting it back?

So I guess the questions are...
1. Is the USD going to keep getting stronger, and conversely, regardless of that is there more reason to think the CAD will fall in general (I foresee housing issues here amongst other problems)
2. Is my math wrong? Has there been enough of a difference between late last year and say the first half of this year that it would give me worthwhile gains to sell USD and convert back to CAD and rebuy? (assume relatively low transaction costs for buying and selling)
3. Anything I'm missing here?
post #8117 of 11182
1. USD is typically stronger during periods of distress. Aka risk-off.

2. You will get skinned twice for ForEx charges. Banks or your forex network companies make money from that spread. Also, there's probably some laws and regulations regarding capital control.

3. Makes perfect sense to get a bit more oomph from forex moves, but that's an double edged sword. See: devaluation of RMB. Devaluation of SWF.

I am assuming that CAD have high correlation with AUD and other hard commodities. So, it could be a good bet if you believe we are going to see strong recovery world wide and in the US.
post #8118 of 11182
Quote:
Originally Posted by brokencycle View Post


Doesn't it really depend on your 401k? Some firms offer 20 options some offer 3.

Yes, but in my experience the options are at best okay, never really great. 

post #8119 of 11182
Quote:
Originally Posted by the shah View Post

yeah it's at 20/share +/- whatever. cheap enough that it won't kill you
Quote:
Originally Posted by the shah View Post

no no nothing too convoluted , i'm just simply saying you could buy a hundred shares just for fun and see what happens , if they go bust nothing matters if they go up to 200/share in a year because everyone buys their products then you get a nice little bump :-)
Quote:
Originally Posted by the shah View Post

none taken :-) i'm not advocating doing that , but anyway you can read more about the product and the information out there doesn't bode well in my opinion, for what it's worth.
agreed , but the chance of a $200 stock going to $2000 seems less likely than a new technology blowing up from $20 to $200 ? i'm not day trading and that's not a very deep way of thinking about it but anyway that's all a moot point because i don't expect insurance companies would be too excited about paying for such minimal gains. i could be wrong though

Uhm... ok. confused.gif
post #8120 of 11182
My current situation:

4% down for the year, 12% up Oct MTD
Decreased leverage, got out of potentially dangerous positions given earnings' probabilities and took up defensive positions foo.gif
Edited by Flambeur - 10/14/15 at 7:06am
post #8121 of 11182
Quote:
Originally Posted by Master-Classter View Post

not sure if this question is going to get lost in the shuffle...

so I'm in Canada. Over the past year I've started gambling I mean investing in the stock market. All my money was in CAD, but as I've purchased stocks late last year and over this year, it's all been converted into USD. Now I'm starting to think a little longer term and I'm not sure if it makes sense to work on selling off my USA listed stocks, converting the cash back into CAD and then buying Canadian listed versions of as much as I can, or if there aren't Canadian listed versions of the stocks, then at least any etf funds. Obviously you guys don't know the future, but my point is if I changed money to USD when we had a better rate, and now that the USD is so high, am I getting basically an automatic 'gain' of 10-15% just by converting it back?

So I guess the questions are...
1. Is the USD going to keep getting stronger, and conversely, regardless of that is there more reason to think the CAD will fall in general (I foresee housing issues here amongst other problems)
2. Is my math wrong? Has there been enough of a difference between late last year and say the first half of this year that it would give me worthwhile gains to sell USD and convert back to CAD and rebuy? (assume relatively low transaction costs for buying and selling)
3. Anything I'm missing here?
If you're just swapping a US security for a Canadian-listed version of the same thing, why would there be any benefit? If the Canadian dollar is lower, than its price in C$ will be higher, all else equal. If not, arbs would swoop in and make it happen.
post #8122 of 11182
Quote:
Originally Posted by Concordia View Post


If you're just swapping a US security for a Canadian-listed version of the same thing, why would there be any benefit? If the Canadian dollar is lower, than its price in C$ will be higher, all else equal. If not, arbs would swoop in and make it happen.

Because he realizes the gain on the embedded currency bet he had with US listed shares.

 

IMO its a good idea to swap out a percentage of the shares. Was a very popular trade in South Africa buying European stocks due be being priced in EUR.

post #8123 of 11182
Quote:
Originally Posted by MSchapiro View Post

Borrowing from your 401k is a bitch.

I guess it depends on the plan. My sister-in-law did it a few years ago when some unanticipated events created a cash crunch when they needed a deposit on the house they were buying. I walked her through it. Don't remember exactly, but she borrowed roughly $20-$30k. It was like two pages of paperwork, far less than a conventional loan and possibly less than you'd have to fill out to open a savings account. They had the money in a week or less. They repaid it in full within a month or so, but I think could have repaid over 2-3 months if they chose.

Not sure about the comment somebody made about having to pay yourself interest (I don't recall this being the case, but could be wrong), but assuming that's the case I'm not paying yourself a nominal interest rate is such a big incentive. If it threw off your allocation strategy you could always just adjust your future contributions.
post #8124 of 11182
Quote:
Originally Posted by MSchapiro View Post

Delayed taxation. We don't know what the future rate will be. ​

I have the option of a Roth 401k and a traditional 401k. I firmly believe the future tax rate will go up in the future due to the current spending pattern of the US. Based on how I feel about the market I will switch which the bulk of my contribution goes to. If we are in a volatile and high valuation market as we are now I do traditional 401k because I am only taxed at the end. If I feel the market is offering greater value I am okay putting after tax money at risk (not to mention you can draw out of a 401k roth too).

You have anyone you recommend? ​

I agree with the implicit assumption that changes to tax rates are far more likely than major, disruptive changes that upset people's settled expectations and undermine years of tax planning.
But I'd note in passing that the fact that money withdrawn from a Roth isn't taxed again right now is a function of the fact that that's what the tax code currently says. There's no guarantee that in the face of a future financial crisis or political wind-shift everyone's careful tax planning won't go to shit.
post #8125 of 11182
Quote:
Originally Posted by lawyerdad View Post


I agree with the implicit assumption that changes to tax rates are far more likely than major, disruptive changes that upset people's settled expectations and undermine years of tax planning.
But I'd note in passing that the fact that money withdrawn from a Roth isn't taxed again right now is a function of the fact that that's what the tax code currently says. There's no guarantee that in the face of a future financial crisis or political wind-shift everyone's careful tax planning won't go to shit.

Excellent points. I have heard a handful of times that the current Roth structure may not stand over time, but I am hopeful because, well there really isn't much other choice. Everything is a bit of a guess long term.

 

 

As for the 401k, $20-$30k isn't bad and that is a good use of a 401k, but in my circumstance and GF's I'm sure we'd have enough pretty easily to hit that 50k limit after a few years. It shouldn't be a primary savings vehicle. 

post #8126 of 11182
Quote:
Originally Posted by MSchapiro View Post

Excellent points. I have heard a handful of times that the current Roth structure may not stand over time, but I am hopeful because, well there really isn't much other choice. Everything is a bit of a guess long term.



Yeah, that makes total sense. At some point nothing's 100% certain (except death and taxes rimshot.gif) so you have to make some reasonable assumptions and plan on that basis, hedging or diversifying as makes sense against the uncertainties.
post #8127 of 11182
I think Gen X is safe with Roth IRA's, but eventually they are going to start taxing them. If I was a millennial I would invest $5500 on something else.
post #8128 of 11182
yep, that's what I meant. I assume CAD and USA listed versions of the same holdings are the same value. The point is I took my CAD cash and over the past year bought a all USA listed funds/stocks and even though the assets themselves went up and down, the currency has moved so much maybe it makes sense to sell a lot, make one lump sum cash transfer from USD to CAD (Norberts Gamble?) and rebuy the same things in CAD and instagain on forex difference. Question is, is USD going to get strong (I suspect yes) and CAD going to get weaker (I suspect yes), in which case it's a good idea but I may wait a few months to see how the currencies play out. Also CAD versions aren't as good (less liquidity, and I dunno, our markets just seem to suck more).



So... NFLX and chill tonight? You guys buying in? Shorting?

(I originally held from 95/99-110 or so, and missed that drop to 108 earlier today (damn) but decided to grab some now at 110/111. If it goes down to 100 I'll double down, if it goes up to 115/120/125 I'll sell tomorrow.)
post #8129 of 11182
Quote:
Originally Posted by Hombre Secreto View Post

I think Gen X is safe with Roth IRA's, but eventually they are going to start taxing them. If I was a millennial I would invest $5500 on something else.

I will honestly be so pissed if that happens. I doubt that it is so, but I wonder if one could sue the government to prevent already funded Roths from converting to being taxed. 

 

The amount of taxes I pay is insane and prevents me from building a good safety net for myself. We as a nation have successfully destroyed the ability to build wealth on a salary and taxes are only going to get higher. 

post #8130 of 11182
Quote:
Originally Posted by MSchapiro View Post

I will honestly be so pissed if that happens. I doubt that it is so, but I wonder if one could sue the government to prevent already funded Roths from converting to being taxed. 

The amount of taxes I pay is insane and prevents me from building a good safety net for myself. We as a nation have successfully destroyed the ability to build wealth on a salary and taxes are only going to get higher. 

I think people who already invested in them will be grandfathered in. Honestly though, I see a Roth IRA as backup. The very, very, very last backup. I don't even really think about it. I knows it's there, but I focus most my money on things the government isn't so heavily depended on.
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