Monday, May 28

Back in the saddle

Hello! I'm almost healthy again today, and my fog has lifted enough to think about writing again, so I figured I was past due for a blog post. Today I have two little observations for you...

RY drops on good results (Friday)
Isn't that cute? RY reports one penny under expectations - basically meets expectations - but because BMO and TD beat expectations quite strongly the market punishes the share price. At the point I checked in on Friday it was down $1.75! It recovered later Friday and some more today, but is still down from last week's trading range by $1-$1.50. I think that this isn't going to be a huge bargain opportunity unless something further happens, but if you were looking to buy anyway I'd be keeping close tabs....

Canadian dollar up and up
It closed at 92.6 cents US today. This is really mixed news, depending on where your money is: If it's in Canada, this is great. If it's in the US, not so great. I certainly am hoping to do some cross-border shopping sometime soon, and vacations in the States will be really cheap this year. On the other hand, my recent purchase of JNJ has risen 1.5% but this is not enough to keep pace with the rising dollar so I'm actually at a loss position! (Good thing I don't have to sell!) This is a good illustration of currency risk. When planning your asset allocation, your time frame really matters because currency movements can be long-term trends. If the Canadian dollar keeps going up for the next five years, I could hold an appreciating stock without ever having a "real" profit!

6 comments:

moneygardener (AKA investor99) said...

Royal Bank's drop = people needed an excuse to take money off the table.

I bought RY in May of 2006. Since then I am now up over 24% including dividends. This company has been exceling for over a year now, and the stock has reacted well. Investors needed an excuse to take some profits.

Mr. Cheap said...

I'd love to buy some RY, but I'd really like to get a better yield (currently its at 3.12%)

Average Joe said...

Glad you are feeling better.

Also like your new layout.

Average Joe

Thicken My Wallet said...

RY failed to meet expectations due in large part to higher disability insurance claims which is more of a seasonal issue than a structural weakness (unlike BMO). Sunlife experienced the same problem with disabiliy claims in Q1 2006 but it rebounded quite nicely.

It may be a good opportunity to take advantage of some seasonality rather than structural issues at RY.

Deborah said...

I think it is highly reasonable to expect the Canadian dollar to continue to gain on the US dollar over the next 5 years.

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