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Some Investors will look at a share count rather than a cost and that is reflected in the above. What if the US investor focussed on the dollar amount instead?
Already many of you are thinking “but but …” and “what if …. ” etc. There are many ways to approach this and none would be wrong and the above is but one example as to when static models and forms are of little benefit. Transactions costs and any tax considerations could be factored into a dynamic model.
A dynamic Investment Analysis Form would allow for scenarios to be run such as investing USD$30,000 to only buy TBMPF on the OTC and converting that to Canadian to buy even more shares for the same dollar amount VS buying the same number of shares at a lower cost and investing the difference (USD$30,000 - USD$22,817 = USD$7,113) elsewhere. The point however is when dealing with F/X one has a changing share price and a changing current exchange rate to contend with and the spread between the F/X buy and sell rates usually has a built in “loss” at any given point in time. The current outlook for the Canadian Dollar is bullish and if that realizes then there may be foreign exchange opportunities in addition to any share price appreciation. Looking at projected foreign exchange rates and consensus price targets of shares, one can start to predicatively model with more information – again, difficult without current data and information that software or a financial application (spreadsheet for example) affords. This also works in reverse. As the Canadian dollar appreciates in value, Canadian Investors may be