Keep or sell Canadian stocks?

[BrianB]

We've got a couple of Canadian stocks in our after-tax account: ENB (Enbridge) and BNS (Bank of Nova Scotia). Not huge amounts, total current value in the US$25k range, less than 10% of that account. I like the dividends they throw off and the Canadian tax withheld is a US tax credit so they have been good for us.

Without getting into political arguments, does it look like a good time to exit based on the trade disagreements that seem to be getting more serious?

We could do some tax-loss harvesting to offset the gains we have in these two so it wouldn't be a tax hit.

Edit to add: We don't buy or sell often in this account. It's primarily for the dividend income and to pass on to our Daughter with basis step-up when we are gone.

BrianB

 

[Flieger]

ENB is a large provider in the US (bought Dominion gas distribution). Don't think there will be huge impact. I also hold ENB and will keep holding.

Flieger

 

[Ian S]

The more likely risk factor is the exchange rate although that's probably already been factored in to some extent. The big Canadian banks have been around a long time and have weathered many storms. The last time there was a dustup over tariffs, the Canadians wisely selected quite narrow targets for exerting pressure. For example, the American whisky industry - think Kentucky bourbon - which was targeted caused Mitch McConnell some lost sleep.

 

[rembrandt]

If you want to go international, try Israel Bonds.

 

[Flieger]

The more likely risk factor is the exchange rate although that's probably already been factored in to some extent. The big Canadian banks have been around a long time and have weathered many storms. The last time there was a dustup over tariffs, the Canadians wisely selected quite narrow targets for exerting pressure. For example, the American whisky industry - think Kentucky bourbon - which was targeted caused Mitch McConnell some lost sleep.

Honestly - Canada has no chance with a Tariff battle. That's why they have already started making changes. Any tariff's should be short-lived if at all IMO.

Flieger

 

[Aramis]

1/3 of all US refinery capacity is processed using Canadian oil. It has particular qualities which the refineries using it have been designed around. It is almost impossible for the US to import oil of similar characteristics and it would cost hundreds of millions of dollars and a great deal of time (including downtime) to re-engineer the refineries to process different oil. In the short to medium, and perhaps long term term, then, any tariffs on Canadian oil, would operate to significantly increase the cost of refined petroleum for all Americans because it must continue to be purchased. I do not think Trump has the stomach to significantly raise the price of gas for Americans heading into the summer driving season. The Canadian tariff threat is meant to frighten and to establish a negotiating position. We all know that is his initial tactic. I don't know what his ultimate desire is here; the border security issue is the stated one and perhaps it is all he wants. Canada will certainly do something to try and appease him and I expect Trump will impose certain targeted tariffs if he is not entirely satisfied - and he wont be entirely satisfied at the outset because ongoing pressure is also how he negotiates. What and how those initial tariffs are, and for how long they will be implemented, will probably be designed to deliver a message.

The Bank of Nova Scotia, obviously, is a different analysis - they don't export banking products to the US so your consideration there would be whether the impact of any tariffs negatively impacts the broader Canadian economy. You should have some time after the imposition of any tariffs to decide that whether that is occurring but, of course, some will front run their bets on the outcome based on their expectation of tariffs. There could be some whipsawing around that depending on whether the expectations become reality and, if so, cause a negative impact to the Canadian economy.

 

[Koolau]

My gut says there will be no or only short-lived tariff battle with Canada. I view the current talk of tariffs as a gambit which will likely w*rk and then be a memory in short order. YMMV

 

[braumeister]

Canada produces 78% of the world's maple syrup, 92% of it from the province of Quebec.
How can we possibly fight a monopoly like that?
I see settlement of this rather sticky issue in short order.

 

[OldShooter]

From Rick Ferri's "All About Asset Allocation" : "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.' "

All this stuff is already priced in by people who know far more about the situations than any of us do.

 

[Aramis]

Canada produces 78% of the world's maple syrup, 92% of it from the province of Quebec.
How can we possibly fight a monopoly like that?
I see settlement of this rather sticky issue in short order.

A couple of months of having to use corn syrup on their pancakes and this will be all over!

 

[Sunset]

I think the exchange rate is about at the worst it's been for many years.
I hold a bunch of CDN stock and will just ride out any blip as once it's settled the fear will disappear and the exchange rate will go up.

 

[38Chevy454]

IMHO all of the tariff discussion is just negotiations. Trying to time the market based on something unknown seems foolish to me.

Current exchange rate has been bad for Canadians. They need those $US.

 

[jaybee0]

I will sell because of horrible total return underperformance against the S&P, why people keep investing in these losers?

 

[kcowan]

TSX has outperformed S&P in the last 30 days by 2.88% to 0.56% but generally S&P wins.

 

[Flieger]

I will sell because of horrible total return underperformance against the S&P, why people keep investing in these losers?

I guess not everyone is as brilliant as you maybe? Go troll somewhere else.

Flieger