While the current snowbird season is just wrapping up, many snowbirds already have their eye on next year, when it is highly likely that vaccine rollouts and reduced travel restrictions will make for a much more “normal” snowbird season.
One area where it is always wise for snowbirds to plan ahead is stocking up on U.S. currency to support their snowbird lifestyle when the opportunity presents itself– and now may be one of those times.
The Canadian dollar has been on a tear versus the U.S. dollar recently, sitting at just under $0.83 U.S. on May 11th, 2021 - up from around $0.78 U.S. just 6 months ago.
While it’s possible the Canadian dollar could keep getting stronger against the U.S. dollar, it’s also possible that it could get weaker. If you want to hedge your bets, now might be the time to start stocking up on U.S. dollars for next season. Snowbird Advisor members can access preferred currency exchange rates through the Snowbird Advisor Currency Exchange program.
Here are two currency conversion strategies to consider, depending on your risk tolerance.
- One-time Conversion: If you’re happy with the current exchange rate, you may want to convert most or all of your currency you will need for next season at one time to ensure you get a good rate and eliminate the risk of the Canadian dollar weakening against the U.S. dollar. Of course, if the Canadian dollar gets even stronger vs. the U.S. dollar, you will miss out on the upside, but trying to time the market is a dangerous game, and if you’re happy with the current exchange rate, you can sleep well at night knowing you aren’t subject to exchange rate volatility.
- Dollar Cost Averaging: If you think the Canadian dollar might get even stronger vs. the U.S. dollar, and you’re willing to take a chance, you may want to consider implementing a dollar cost averaging approach, where you convert a fixed amount of money at fixed intervals over time (i.e. $2,000 per month every month for the next 6 months). This strategy can help to reduce your exposure to volatility if the value of the Canadian dollar fluctuates against the U.S. dollar over that period.
Snowbird Advisor FX Program:
If you’re looking for a better way to save on currency exchange and manage all your currency conversion needs, the Snowbird Advisor Currency Exchange program offers the following benefits exclusively for Snowbird Advisor members:
- Preferred Currency Exchange Rates up to 2% better than the banks.
- Flexible Conversion Options – Convert any amount at any time OR a fixed recurring amount at regular intervals.
- Fast, Free & Easy Enrollment
- Other Benefits
You can learn more about the Snowbird Advisor Currency Exchange program here.