The Edge: Two Olympic Investments in Canada

The Trading Edge with Derek HoffmanOne of your favorite posts was when I covered Brazil in “Bright Signs of an Early Carnival for Traders Utilizing Brazilian ETFs“. So, with the Winter Olympics in full-throttle I want to shine the light on some safe and steady Canadian investments.

As of this morning, the U.S., Germany and France lead the Olympics with the most medals per country, respectively. Meanwhile, this year’s Olympics host, Canada, is tied for 4th place. Canada may not be placing first in the Olympics, but they are economically benefiting from the attention on Vancouver and the wallets being opened in surrounding areas right now.

iShares MSCI Canada Index ETF (EWC): The case of higher lows

EWC is an exchange traded fund that allows you to invest in a diversity of Canadian holdings. Companies such as Royal Bank of Canada (RY), Suncor Energy (SU), Barrick Gold (ABX), Canadian Natural Resources (CNQ), fertilizer leader Potash Corp. of Saskatchewan (POT) and Toronto Dominion Bank (TD) are just a sampling of strong large-cap companies moving the needle for EWC. Financials, energy and industrial materials make up the majority sector weighting in EWC, and all stand to gain from the Olympics currently in Canada.

The Canadian Dollar (FXC): An anti-dollar hedge

If you are concerned about Bernanke’s printing presses spinning galore at zero interest policy and flushing the market with more and more U.S. dollars, then look no further than the Canadian Dollar. Consider the Rydex CurrencyShares Canadian Dollar Trust, or FXC. If you think a currency is representative of a country’s share price, then this curreny-based ETF (FXC) is a simple way to play the Canadian dollar. The Canadian banking system has been rather healthy in comparison to other countries across the globe. Further, the country’s debt to GDP ratio has remained stable and commodities continue to perform and drive upside for FXC.

In the words of highly respected chief economist and native Canadian David Rosenberg, “We’re still in this post-bubble rollercoaster ride and the theme for 2010 will be the return of volatility … focus on high quality companies with dividend yield … global economic growth is going to be disappointing over the next 4-6 quarters.”

Stay warm and stay nimble. Continue to enjoy the Olympics, where each country all over world showcases their athletic prowess on the center stage in Vancouver, Canada.

Disclosure: No positions in the stocks mentioned.

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