Financial Select Sector SPDR Fund (XLF)

Best time to own is now until mid April. US banks have been raising dividends (those that can have them). Financial stocks will participate in the market, which will do well.

Likes this ETF. Thinks the large-cap banks will continue to do well in the US. They are going to benefit from credit conditions getting better with a closing market recovery and, just generally, the consumer getting better. Believes the US economy will grow at 3% this year and banks will benefit from this.

Diversified American ETF? This is the one he would recommend. Financials will participate very well in a rising economic climate, and as well, they will have inflation protection qualities. They will be the best in industry, but they will participate and be well above the median. Feels the Cdn$ will continue to go down and, over the next year, he can see it down to $0.90 and probably has further to go. This ETF will probably give you some additional income pick up from the exchange rate differential.

Financials enter a period of strength from December all the way through to March. This one has been outperforming the market and we are well within its period of seasonal strength. If you can get it on weakness, all the better.

XLF-N or ZUB-T for a rising US$? Feels Cdn$ is going to outperform the US$ next year. Canada will benefit from a stronger US economy. If you are looking for a rising US$, the choice would be ZUB, but he is not expecting a rise in the US$.

[XLI-N or XLF-N] It depends on what happens with QE and bank regulations. Industrials should have less volatility than financials over 1 year. Over 5 years financials should do better.

This is the financial services, the sub sector in the US. He still likes US banks. This could easily double to get back to where it was prior to the financial crisis. If you own, the Cnd$ will eventually go down which will be in your favour as well.

US banks and holds some of the larger ones. Traded in US$’s. You are likely going to see more upside from US banks than Canadian banks due to the recovery in the housing market.

Chart shows this is reaching its old highs and you have to keep in mind that past buyers may Sell some of their holdings. He always waits for a breakout before moving into a stock.

This has done quite well, but when you are dealing with the US financials as opposed to the Canadian, there is a much riskier paradigm going on. Also, what he is sometimes concerned about in US financials are lawsuits. It will be a riskier sector but he sees nothing wrong with being in it.