In this week’s issue:
- Weekly Commentary
- Strategy of the Week
- Stocks That Meet The Featured Strategy
In This Week’s Issue:
– Stockscores’ Market Minutes Video – Free Getting Started Videos
– Stockscores Trader Training – Currency Exchange When Trading an RRSP
– Stock Features of the Week – Stockscores Simple Weekly
Stockscores Market Minutes Video – Free Getting Started Videos
This week, I highlight the free videos found in the Getting Started area of the Stockscores Education Center and show where the risks are in the various markets that I track each week.
Trader Training – Currency Exchange When Trading An RRSP or TFSA
Historically, RRSP and TFSA accounts have been in Canadian Dollars with no ability to trade US listed stocks without incurring the currency exchange. This put a real limit on a trader’s ability to trade since so many good opportunities come from the US stock markets. It is not that you could not trade US listed stocks, it is just that the currency exchange on the trades made transaction costs very high.
If you bought a US listed stock, you pay the currency conversion in to US dollars when you buy. Then, when you exit the trade, you paid the currency conversion back in to Canadian dollars and typically the spread in rates was expensive. It was easy to incur a few hundred dollars in transaction costs to do this, making active trading for smaller percentage moves a difficult strategy to be successful at.
That meant that most Canadian traders who used their registered accounts for trading were forced to focus in on the Canadian market. That is ok when the Canadian market is strong, like it was for the first half of 2014, but when it is trending lower as it is now doing, Canadian traders will look south of the border for opportunities. With new US denominated RRSP and TFSA accounts, this is now possible.
Recently, Desjardins securities announced the availability of US Dollar denominated registered accounts (other brokerages may offer something similar but most do not). Now, a Canadian trader who wants to use their RRSP or TFSA to trade US listed stocks can do so without the burdensome in and out currency exchange fees of the past.
Here is a page with more information on this account option from Disnat:
https://www.disnat.com/regimes-us/index_en.aspx
This is a very important change that I recommend all traders who are using their Registered accounts consider.
There are other issues to consider when trading in a registered account. As I have discussed recently, leverage (trading on margin) is not allowed which means that some very disciplined traders could earn more after tax outside of these tax sheltered accounts because leverage increase buying power. It is also important to check with your accountant to get a final opinion on the viability of your trading strategy inside an RRSP or TFSA.
If you trade in an RRSP and have been frustrated in the past by the high transaction costs when trading US stocks, be sure to check out these new US Dollar RRSP and TFSA accounts from Disnat.
I went in search of good weekly charts this week using the Stockscores Simple Weekly strategy, taught in the Stockscores Investor course and utilizing the Market Scan of the same name. Here are two charts that stand out:
Here are two stocks that I found this morning that look interesting:
1. T.IFP
T.IFP is a Canadian Lumber stock, a sector that has been strong lately because of the weakening Canadian dollar and an improving US housing market. The stock recently broke to new highs after spending most of 2014 under the $18 resistance level. Support at $17.
2. HBAN
HBAN is a US Regional Bank, a sector that broke out last week. HBAN did the same, breaking to new highs through long standing resistance at $10.25. Support at $9.90.
References
- Get the Stockscore on any of over 20,000 North American stocks.
- Background on the theories used by Stockscores.
- Strategies that can help you find new opportunities.
- Scan the market using extensive filter criteria.
- Build a portfolio of stocks and view a slide show of their charts.
- See which sectors are leading the market, and their components.
Disclaimer
This is not an investment advisory, and should not be used to make investment decisions. Information in Stockscores Perspectives is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The writers and editors of Perspectives may have positions in the stocks discussed above and may trade in the stocks mentioned. Don’t consider buying or selling any stock without conducting your own due diligenc
