Invest in US stocks or CAD Hedged version of stock?
Hi all, apologies for the room temperature IQ question. I've focused most investing in Canadian based ETFs rather than in $Invesco QQQ Trust(QQQ.US$ , $SPDR S&P 500 ETF(SPY.US$ etc.
I wanted to ask about investing in stocks that are on the NYSE versus the CAD Hedged stock that appears.
The CAD hedged always appears at a much more purchasable price but is it better or worse for the long term?
Looking at some stocks like Eli Lilly (~$614USD vs $23CAD), Costco ($565USD vs ~26CAD)
Is it always better to buy the canadian version to save on exchange fees?😘😘😘
I wanted to ask about investing in stocks that are on the NYSE versus the CAD Hedged stock that appears.
The CAD hedged always appears at a much more purchasable price but is it better or worse for the long term?
Looking at some stocks like Eli Lilly (~$614USD vs $23CAD), Costco ($565USD vs ~26CAD)
Is it always better to buy the canadian version to save on exchange fees?😘😘😘
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Brooklynnn : RRSP is better for holding USD stocks as you don’t have to pay 15% tax on dividends
Brooklyn Hey : I wouldn't care too much about stock prices, since they won't factor into performance.
CAD-hedged just means that you are protected from USD weakness relative to CAD. But then you are vulnerable to USD strength. Depends what happens, which performs better. For example, CAD-hedged would've been great for 2001-2012, but bad for 2012-2023.
I think USD may weaken over the next ten years, but I'm not totally convinced. So I have some of both, hedged and non-hedged. All in CAD / TSE. Example: VFV and VSP.
EugeneB Brooklyn Hey: You think the USD will weaken relative to CAD?
Nwwovice Brooklynnn: Depends on the stock. Most stocks don't pay a very high dividend, and most of your profits will be from capital gains.
I own some US stocks in my tfsa. MSFT dividend yield is 0.92%, which is currently around $3 dividend per share. The withholding tax is $0.45.
Bravo Jordan : Directly in US stocks. As a Canadian, you probably already have sufficient CAD exposure via your job and possibly your house.
Keep US stocks in USD, and CAD stocks in CAD.