Buying American

The Canadian Loonie edged up higher today. As of right now you can trade 1 Canadian dollar for 1.028 US dollar. And the US based S&P; 500 is trading at a discount compared to the Canadian S&P;/TSX Composite index so I decided to take this opportunity to buy some US stocks because it’s like taking money that’s worth more to buy assets that are worth less (in terms of relative valuation to Canadian equities.)

I went with over 139 shares of Intel Corp (INTC-Q.) They design and manufacture microprocessors. The computer you’re using to read this post probably has an Intel chip in it. They are trading at 10 times earnings, with a nice dividend of just under 4%. They are a recession proof company (everyone uses computers), a leader in their field, and still have growth potential.

Another one I bought today is KKR & Co (KKR-N.) They buy/sell and manage assets and provide financial services to their clients. They are only trading at 8 times earnings, very cheap, they understand the capital markets very well and I believe they can find ways to make a profit in economic uncertain times like now. Plus the 4.5% dividend is pretty nice.

Of course both securities I’ve bought are in my RRSP brokerage account so the dividends wont get hit with any US with-holding tax. And I’ve bought enough of both to take advantage of re-invested dividends (DRIP.)

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Justin Pesenti
Justin Pesenti
03/12/2012 6:58 am

It always takes me a lot more than 3 weeks to prepare an excellent impromptu speech.
Wise are those who learn the bottom line doesn’t also have to get their main priority.