I’ve been asked by many of my clients why their US-based investments have taken a dip in their values. They know the US economy is still doing well, and they haven’t heard any big breaking news, so rightly so, they want to know what’s going on?

Why are your US investments looking like they aren’t as strong as they were a few months ago?

When you initially purchased your investments, your Canadian dollar was weaker. Investment values include exchange rates when calculating your returns.

To really boil it down in the simplest way possible: you bought shares when your dollar was only worth 70 cents. If that share hasn’t gone up in value, but the Canadian dollar is now worth 80 cents, every share you own has in a way “lost” 10 cents of value.

No worries though. Keep maintaining your investment strategy. The Canadian dollar will fall into it’s more “natural” zone eventually, and even if it doesn’t, it’s not a bad thing that your dollars are worth more. And as long as the US economy keeps growing in the long run, today’s Canadian dollar value just wont be relevant in the big-picture of your investments.

Just another example of why it’s important to diversify.

Happy investing folks!

Alan Yu, (647) 588-8879