Loonie at Par Means Shopping, Vacation and Investment Bargains

After hovering in the high 90-cent range for the month of March, for the first time since July 2008 the loonie finally hit par with the U.S. dollar today.

At the same time, economic woes in Greece, Spain and Portugal have sent the euro, which had lost 200 basis points since Friday and was trading around $1.34 this morning, into a nosedive. Meanwhile, a slow recovery from the recession has sunk the British pound in the U.K., while an election call for May 6 sparked a sell-off of sterling over fears of a parliamentary deadlock. The pound, which historically has floated around $2 Canadian, slipped to a low of $1.51 this morning.
All this means that Canadian investors can now snap up U.S. and foreign stocks at bargain basement prices. While the same care needs to be taken to choose stocks that present good future growth opportunities, the relative price at which they can now be acquired was inconceivable a year ago.

This is also a good time to become a snowbird by buying U.S. real estate, as housing prices down south remain depressed even in the sunshine states. If you're already a snowbird or are planning a trip south of the border this summer, you might want to convert some of your funds into a U.S. dollar account for future use, and save a bundle on conversion rates.

Save even more by calling your credit card company and getting that account linked to a U.S. dollar credit card, so you can avoid getting dinged by the 2.5 per cent conversion fee when buying in U.S. (or any foreign) currency.

Last, but not least, this is a great time to shop for bargains both on day trips and online. And the best part is that, according to economists, you don't even need to feel guilty about it. Why? The assumption is that the money you save (even the capital gains you could make by selling a U.S. vacation home years down the road) will be spent on goods in Canada. That's a win-win situation.