Features
Two murders of two Jewish Winnipeggers – one in 1913 and one in 1928 Could they have been eerily connected?
By BERNIE BELLAN The story you’re about to read started off in one direction – then, following a phone call I received Tuesday evening, January 25, took a completely different – and frighteningly eerie direction.
My original story was going to be about a new book that is about to be launched titled “The End of Her”. The book’s author, Wayne Hoffman, is someone who first came to my attention, and subsequently the attention of our readers, in 2015 when he sent me a tantalizingly provocative email whose subject was the long-ago murder of his great-grandmother, Sarah Feinstein.
Mrs. Feinstein was only 26 years old at the time of her murder and, although as Wayne Hoffman notes in his book, there have been many theories advanced as to who could possibly have wanted to murder such a young, innocent woman, the case remains a total mystery.
(You can read my story about “The End of Her” elsehwhere on this website.)
Now, the story of how Wayne Hoffman came to write his book is in of itself quite a fascinating one, but that January 25 phone call really sent my head spinning.
The caller, as it turned out, was a woman with a relatively deep voice. She began by saying that it had just been brought to her attention that there is a Jewish newspaper in Winnipeg. Not only had she never heard of The Jewish Post & News, she said, she wondered what any Jewish newspaper would be all about? Would it be religious in content? she asked. When I assured her that this paper is mostly secular in content she seemed more interested in perhaps taking out a subscription.
We were enjoying a lengthy conversation when the caller sprung this one on me – totally out of the blue: Her grandfather, whose name was Robert Cohen, she told me, had been murdered in Winnipeg in 1928.
“Really?” I asked. “That’s an amazing coincidence,” I said. I explained that I was going to be publishing a story about a new book whose subject was also a long-ago murder of a Jewish Winnipegger.
“I actually have a copy of his obituary,” the caller continued. “But it’s in Yiddish – and I can’t read it.”
She wondered in which newspaper it might have appeared. I said that the main Yiddish language circulation newspaper in Winnipeg at that time was something called Der Yiddishe Vort. I told the caller that I was going to try and see whether there was anything I could find out about her grandfather’s murder and that I would get back to her.
The next day I contacted Stan Carbone, curator of the Jewish Heritage Centre, and asked him whether he or Andrew Morrison, the Centre’s archivist, could help me find the obituary of Robert Cohen from 1928.
Andrew was quick to respond, writing me that when he did a search he was able to come up with one reference to a Robert Cohen in a February 27, 1928 edition of the Israelite Press (which was called Der Yiddishe Vort in Yiddish.)
Andrew sent me the link to the story, which I was able to access on the Jewish Heritage Centre website. What I found was a pdf of the front page from that February 1928 issue which had a story about someone named “Ruven Cohen”, not Robert Cohen. (I can read Yiddish somewhat but my understanding is quite limited.)
But, it was a front page story in that pdf – not an obituary. I realized immediately that the story was about Cohen’s murder.
Next, I contacted Rochelle Zucker, host of the Jewish Radio Hour, and asked her whether she might be able to translate the story for me. Rochelle obliged me that same evening.
Here is the shocking translation of that story , as provided by Rochelle Zucker:
Feb. 17, 1928 Israelite Press
Young Jewish Man from Winnipeg Mysteriously Murdered
R. Cohen murdered in the area of Shell Lake Sask.
Shelbrook Sask, – From the coroner’s inquest of the mysterious death of Ruven Cohen, a cattle merchant from Winnipeg it was found that the $1190 that he had with him when he was leaving the area remained in his pocket. Therefore, the motive for the murder could not have been robbery. The tragic death of R. Cohen, a young man from Winnipeg, made a deep impression here in the city. His body is expected to arrive tomorrow.
According to the information that has been received to date, Mr. Cohen, on his buying trip, had found merchandise in the area and had telegraphed to Winnipeg for money. He got the money and according to reports from the town of Kenwood in that area, he deposited $2000 in the bank. Monday, he took out $1200 and took it with him to pay the farmers for the animals that he bought.
He borrowed a horse from Alfred Schwartz, a Jewish farmer from the area, and rode on horseback in the area. Tuesday, the horse came back home with Cohen’s dead body on it. His hands and feet were tied to the saddle.
Mr. Schwartz and Harry Adelman, a merchant from Shell Lake, traveled immediately to Shelbrook, 40 miles from there and notified the police who immediately started an investigation.
The deceased left behind a widow and 4 children.
Wow! I thought – Mr. Cohen was murdered, but apparently he was not robbed – even though he was carrying a huge amount of cash on his person! And he was in Saskatchewan buying cattle! Sarah Feinstein’s husband, David, was also a cattle buyer who was in Canora, Saskatchewan at the time of her death.
How similar though was Ruven Cohen’s murder to Sarah Feinstein’s I asked myself. Here were two Jewish Winnipeggers, both murdered in the early part of the 20th century, yet with no apparent motive for either one’s murder.
Yet, there was much more to the story, as I was to find out. The next day I contacted the woman who had called me Tuesday evening to tell her what I had found out, including that her “grandfather” was murdered in Saskatchewan, not Winnipeg. But then I was in for another surprise when the woman with whom I was talking told me that she was 19 years old.
“Nineteen?” I said. “But you sound so much older.” After I got over how young this woman was it dawned on me that something else didn’t make sense.
Robert or Ruven Cohen – as he was referred to in the Israelite Press, couldn’t have been her grandfather. She’s much too young to have had a grandfather who was murdered as long ago as 1928. “He had to be your great-grandfather,” I said to her.
“I guess,” she answered. “I hadn’t really thought about it much.” I told her that I was so caught up in this story now that I was determined to try and find out whether there was anything else that I could find out about Mr. Cohen’s murder.
Subsequently, I renewed my subscription to something called newspaperarchives.com, which is a fabulous source for investigative reporters. I had actually taken out a subscription to that service a year and a half ago when I was pursuing the mystery of why someone named Myer Geller had left $725,000 to the “Sharon Home” after he died – without offering any explanation.
It was after searching newspaperarchives.com that I came across a story that was every bit as tantalizing as that initial story from the Israelite Press.
Here is that story, from the February 15, 1928 issue of a newspaper called the Shelbrook Chronicle:
R. Cohen of Winnipeg tied hand and foot to saddle
Horse returns home with dead body
Grim tragedy stalked through the little hamlet of Shell Lake on Tuesday morning when the dead body of Robert Cohen, cattle buyer of Winnipeg, was found tied to the saddle of the horse he was riding. The horse, which Robert Cohen had borrowed from Perry Turrell on Sunday afternoon to go to Kenwood, returned early Tuesday morning to the farmstead of his owner dragging his dead body, and when Mr. Turrell found the body the hands were securely and apparently expertly tied together and then tied to the stirrup of the saddle. The feet were likewise securely tied and the body apparently thrown over the saddle and the feet and hands tied to the same stirrup by the same rope passed underneath the body of the horse. The conjecture is that when the horse was started off the saddle turned under the horse and the body was then thrown under the horse and dragged. The head was severely bruised and lacerated.
It is alleged that a sum of money was sent to Cohen through the bank at Kenwood by his Winnipeg partner and the purpose of his trip to Kenwood was to draw out some of the money for the purpose of buying cattle in the country about Shell Lake.
He is alleged to have withdrawn $1300, distributed about $100 in Kenwood and started for Shell Lake with about $1200. He borrowed the horse – a rather spirited one from Perry Turrell on Sunday afternoon and rather late in the afternoon left for Kenwood. Monday he spent in Kenwood. When interviewed by long distance the pioneer cattle buyers of Kenwood said that Robert Cohen was a stranger to them until his visit of this week.
On Tuesday morning Turrell rose early, noticed that the yard about his buildings was marked as if by an object dragged over it. On examination he found blood stains and then noticed the horse in the yard riderless.
On going over to investigate in the half light of the early morning the horse took fright and ran to the field dragging a dark object. Terrell approach the frightened animal again and this time found that the heavy object was the dead body of Robert Cohen who had on Sunday afternoon borrowed his horse. Thinking life might not be extinct he cut the cinch of the saddle and also the rope which bound the body to the saddle. He then discovered that the man was dead and left the body where it was and immediately sent alarm to several of his neighbours…
In the meantime Turrell and some of his neighbours followed the blood trail out of the yard east on the roadway and across some vacant land for a distance of a mile. An empty pocketbook was found on the snow in this vacant land, presumably that of the dead man, for when the Constable and coroner later examined Cohen there was no money on his person.
Cohen is a large man, apparently about 35 years of age. He has a wife and family in Winnipeg, the wife at present in hospital in that city. His wife has a sister and brother-in-law, residents of Shelbrook, the brother-in-law a blacksmith also named Cohen
There are a number of theories as to how the man may have met his death. The most commonly held is that his assailant, with the intent of robbery, knocked the man insensible, took his money and then tied him to the saddle.
Yet, there is one gaping hole in that Shelbrook Chronicle story. Why on earth would a robber have gone to the trouble of tying Mr. Cohen’s body to his horse after he murdered him? What possible motive could there have been for such a savage and what must have been fairly time consuming task if the motive were simply to rob the poor man? And, why were the two stories – the one in the Israelite Press and the other in the Shelbrook Chronicle so contradictory? Never mind that the name of the person who gave Mr. Cohen a horse was completely different in both stories, the question of whether he was robbed or not is also180 degrees different in both stories.
It was when I came across one final story about Mr. Cohen’s murder, however, in an April 7, 1930 issue of the Winnipeg Free Press that the robbery motive seems to have been thoroughly disproven. Here is an excerpt from that story:
Government offers $1000 reward for slayer of Cohen Winnipeg cattle buyer
Cohen was a likeable man who paid good prices for his cattle and was thought well of in the district where he met his death. Robbery apparently was not the motive for his killing for his money was found in his pockets. (Editor’s note: emphasis mine.) He had been killed before he was roped to the saddle of a horse. A blow at the base of his skull was the cause of death.
So, there we have it. Despite the Shelbrook Chronicle’s claiming that Mr. Cohen had been robbed of $1300, both the Israelite Press’s and the Free Press’s story say the exact opposite: that no money was taken from him. Whether or not he was robbed, the manner in which he was killed and tied to his horse certainly would suggest that the motive for his murder was far more insidious than simply robbing the poor man.
And, what does this have to do with the murder of Sarah Feinstein? Think about it: Two murders of Jews – who both have strong ties to the cattle buying business.
This is where another story written by Wayne Hoffman enters into the picture. In January 2019 we published a story by Wayne about his great-grandfather David, which was titled “My Great-Grandfather, the Jewish Cowboy”.
In that story Wayne goes into great detail about his great-grandfather’s time spent in Canora, Saskatchewan, where he and his brothers had a thriving business, including before and after Sarah Feinstein’s murder. The story is quite vivid in how it describes what an outstanding cowboy David Feinstein was, but when you read the following two paragraphs from that story, just stop to think how much more sense it now makes to think that Sarah Feinstein’s murder was a hit – exacted by some very tough competitors of David Feinstein:
“David’s stay in Canora coincided with Canadian, and later American, Prohibition. According to a few of my cousins, some of the Feinstein brothers–possibly including my great-grandfather–were probably involved in bootlegging. There was more than just horses in those barns, one suggested; perhaps the family’s connection to organized crime had something to do with the murder? It did explain one odd thing I’d found in my research: While the brothers were dealing cattle in Saskatchewan, according to a business directory, they were also officers of a short-lived company in Winnipeg called Manitoba Vinegar Manufacturing.
“The notion that the brothers might have been involved in unsavory endeavors was bolstered by other stories I learned, about how they were serious gamblers, and tax cheats; two of my great-grandfather’s brothers were later fined in what the Tribune called ‘Canada’s biggest tax evasion case.’”
Could both Sarah Feinstein’s and Ruven Cohen’s murders have been part of the same pattern of “sending a message”, which was all too common among gangsters of that era?
You be the judge.
Features
Bias in America’s Colleges Produced Modern Anti-Zionism
By HENRY SREBRNIK Jon A. Shields, Yuval Avnur, and Stephanie Muravchik, professors at the Claremont Colleges in California, have just completed a study, “Closed Classrooms? An Analysis of College Syllabi on Contentious Issues,” published July 10, 2025, that draws on a database of millions of college syllabi to explore how professors teach three of the most contentious topics: racial bias in the criminal justice system, the Israel-Palestine conflict, and the ethics of abortion.
They used a unique database of college syllabi collected by the “Open Syllabus Project” (OSP). The OSP has amassed millions of syllabi from around the world primarily by scraping them from university websites. They date as far back as 2008, though a majority are from the last ten years. Most of the data comes from universities in the United States, Britain, Canada, and Australia.
“Since all these issues sharply divide scholars, we wanted to know whether students were expected to read a wide or narrow range of perspectives on them. We wondered how well professors are introducing students to the moral and political controversies that divide intellectuals and roil our democracy. Not well, as it turns out.”
In the summary of their findings, “Professors Need to Diversify What They Teach,” they report that they found a total lack of ideological diversity. “Across each issue we found that the academic norm is to shield students from some of our most important disagreements.”
Teaching of Israel and Palestine is, perhaps no surprise, totally lopsided, and we’ve seen the consequences since October 7, 2023. Staunchly anti-Zionist texts — those that question the moral legitimacy of the Israeli state — are commonly assigned. Rashid Khalidi, the retired professor of Modern Arab Studies at Columbia, is the most popular author on this topic in the database. A Palestinian American and adviser to the Palestine Liberation Organization delegation in the 1990s, Khalidi places the blame on Israel for failing to resolve the conflict and sees the country’s existence as a consequence of settler-colonialism.
The problem is not the teaching of Khalidi itself, as some on the American right might insist. To the contrary, it is important for students to encounter voices like Khalidi’s. The problem is who he is usually taught with. Generally, Khalidi is taught with other critics of Israel, such as Charles D. Smith, Ilan Pappé, and James Gelvin.
Not only is Khalidi’s work rarely assigned alongside prominent critics, those critics seem to hardly get taught at all. They include Israel: A Concise History of a Nation Reborn by Daniel Gordis, a professor at Shalem College in Israel. Gordis’s book appears only 22 times in the syllabus database. Another example is the work of Efraim Karsh, a prominent historian. His widely cited classic, Fabricating Israeli History, appears just 24 times.
For most students, though, any exposure to the conflict begins and ends with Edward Said’s Orientalism, first published in 1978. Said is the intellectual godfather of so many of today’s scholars of the Middle East, thanks in no small part to this classic book. Said was a Palestinian-American academic, literary critic, and political activist from a prominent Christian family. Educated at Princeton and Harvard Universities, two of America’s most distinguished centres of higher learning, he taught at Columbia University, another Ivy League institution, until his death in 2003.
Said was no crude antisemite. His writings were aimed at academics and intellectuals and he has, in my opinion, done more damage to the Jewish people than anyone else after 1945. Said claimed to be the first scholar to “culturally and politically” identify “wholeheartedly with the Arabs.” But he was also a political activist for the Palestinian movement opposing the existence of Israel.
Said warned PLO leader Yasir Arafat that if the conflict remained local, they’d lose. Join “the universal political struggle against colonialism and imperialism,” with the Palestinians as freedom fighters paralleling “Vietnam, Algeria, Cuba, and black Africa,” he advised.
(In this he was not the first, though. Fayez Sayegh, a Syrian intellectual who departed for the United States and completed his Ph.D. at Georgetown University in 1949, preceded him. Also an academic, his 1965 monograph Zionist Colonialism in Palestine stands as the first intellectual articulation of Zionism as a settler colonial enterprise, arguing that the analytical frameworks applied to Vietnam and Algeria apply equally to Palestine. The treatise situated Zionism within European colonialism while presenting it as uniquely pernicious.)
Israel’s post–Six-Day War territorial expansion helped Said frame Israel as “an occupying power” in a 1979 manifesto titled The Question of Palestine. Alleging racial discrimination as the key motive was a means of transforming the “Zionist settler in Palestine” into an analogue of “white settlers in Africa.” That charge gained traction in a post-Sixties universe of civil rights, anti-imperialism, anti-colonialism, and Western self-abnegation. The work sought to turn the tables on the prevailing American understanding of Israel: It is not, in fact, an outpost of liberal democracy or refuge from antisemitism, but an instrument of white supremacy.
Orientalism popularized a framework through which today’s advocates on behalf of Palestinians understand their struggle against the state of Israel and the West generally. Said casts the Western world as the villains of history and peoples of the East as its noble victims.
The essence of the book, Said concluded, is the “ineradicable distinction between Western superiority and Oriental inferiority.” It falsely affirms “an absolute and systematic difference between the West, which is rational, developed, humane, superior, and the Orient, which is aberrant, undeveloped, inferior.”
So it was impossible to take Zionism seriously as one among the myriad nationalist movements that emerged in the nineteenth century, much less to see Israel itself as a land of refugees or the ancestral homeland of Jews. And, indeed, Said’s Orientalism singles out Israel for special rebuke, suggesting that the state could be justified only if one accepted the xenophobic ideology at the core of Western civilization. Israel’s defenders, particularly those who lament the lack of democracy in the Middle East and fault Arabs for their militancy, represent the “culmination of Orientalism.”
Said is widely acknowledged as the godfather of the emerging field of postcolonial studies, and his views have profoundly shaped the study of the Middle East. Said also inspired – and in some cases directly mentored – a generation of anti-Zionist U.S. scholars whose dominance in the academic study of the area is unquestionable today.
The political left that emerged trained itself to read every conflict as the aftershock of colonialism. The ideological narrative of oppression and resistance allowed even the jihadist to become a post-colonial rebel.
It’s hard to overstate the academic influence of Orientalism. The authors note that “As of this writing, it has been cited nearly 90 thousand times. It is also the 16th most assigned text in the OSP database, appearing in nearly 16 thousand courses.” Orientalism is among the most popular books assigned in the United States, showing up in nearly 4,000 courses in the syllabus database. Said’s work appears in 6,732 courses in U.S. colleges and universities.
But although it was a major source of controversy, both then and now, it is rarely assigned with any of the critics Said sparred with, like Bernard Lewis, Ian Buruma, or Samuel Huntington. Instead, it’s most often taught with books by fellow luminaries of the postmodern left, such as Frantz Fanon and Judith Butler.
All these ideas are now embedded into diversity, equity, and inclusion identity politics, and “humanitarian” outrage over supposed Israeli “settler-colonialism,” “genocide,” and “apartheid.”
The ground for the massive pro-Hamas college and university encampments, and attacks on Jewish students, was prepared decades ago. The long march of progressives through American institutions over the past decades has taken its toll on society.
Henry Srebrnik is a professor of political science at the University of Prince Edward Island.
Features
Exchange Rate Factors: What Global Events Mean for Savvy Investors
When Russia invaded Ukraine in 2022, it created ripples in all financial markets, including currency markets. The Euro weakened while the dollar surged and emerging market currencies wobbled. Global factors can quickly affect financial markets and shake established trends. Apart from such rare events, currencies tend to change their price because of interest rates, inflation, and overall investor confidence. For investors managing money abroad, understanding these movements is critical to avoid losses and mitigate risks.
Below, we will break down how global political, economic, and cultural events influence exchange rates, with insights for savvy investors.
Economic factors
There are several key exchange rate factors with a consistent history of shaking financial markets. These factors include inflation, interest rates, trade balances, employment rates, and so on. Since economic factors are shaping markets almost daily, we start with those.
Inflation and interest rates
Inflation and interest rates are closely connected as one can easily affect the other. When inflation rises, central banks step in and raise interest rates to reduce inflation, and when inflation is lower, central banks can lower interest rates to make borrowing money cheaper. As a result, investors closely monitor these two metrics to anticipate changes in interest rates. Higher inflation makes currencies weaker, and whenever banks change the rates, the changes are immediately reflected in global currency rates. In the United States, the Federal Reserve is the central bank that sets interest rates in the country.
Trade balances and economic growth
A country that exports more than it imports has a stronger demand for its currency. More demand equals a stronger currency. However, the Japanese yen was always weaker against the dollar because the BOJ of Japan tends to have super low rates near 0 to support its exporters. Economic growth also increases demand for local currency as more investors try to invest in the country’s economy. Long-term investors often track this data to detect early signs of any changes in currency strength.
Political and geopolitical factors
Elections, sanctions, and overall political stability are also crucial factors. If the country gets under sanctions, its economy crumbles and its currency becomes inflationary, losing its value quickly. Elections are also crucial for a currency’s strength. Geopolitical events can have a serious impact on the currency as well. The most obvious example is the 2016 Brexit events that made GBP lose its value rapidly and violently. Global conflicts, such as wars, can seriously impact global financial assets, especially currency markets. When tensions are high, safe-haven currencies like USD and CHF (Swiss Franc) become very popular among investors as they seek a safe place to protect their capital.
Cultural and social factors
People like tourists, workers, and diaspora communities can shape currencies as well. Tourism usually drives seasonal demand, and countries that are popular destinations during certain seasons experience their currency appreciation as demand spikes. The perception matters as countries seen as safe and opportunity-rich tend to attract more investors, solidifying their currency strength.
Technology and innovation
Technology is seriously affecting everything, especially the financial sector. Digital payment systems, blockchain technology, and fintech startups have made it easy and swift to move money around. Cryptos and stablecoins enable investors to protect their capital using stablecoins during volatile times. The latest trend among banks is to work on CBDCs, which signals a new era where national currencies are blended with technology and blockchain. Despite this, currencies, even in their crypto form, will continue to be influenced by all major factors mentioned above, and knowing how these factors impact your currency is key to keeping your capital safe from risks.
Practical lessons for savvy investors
So, what do all these factors teach us about global currency rates and investing strategies? The key lies in proper preparations and anticipation. Monitoring macro trends, policy announcements, and major geopolitical and political developments is critical.
Diversify
The number one method which is used by professional investors is diversification. This simply means to spread your risks across a basket of assets. By not investing all your capital in one instrument, you can mitigate risks. If one asset experiences a loss, other ones will counter it with returns. Building a diversified portfolio is key to properly diversifying. For example: divide your capital to buy stocks, commodities, currencies, and cryptos so that if one fails to perform, others will counter it. This ensures a stable income without unnecessary losses in the long run.
Hedge
Forex options and ETFs are great hedging assets. Forex options let investors lock in an exchange rate for a future date, which is very useful if you expect volatility but want stability. Currency ETFs, on the other hand, track specific currencies or a basket of currencies and allow easy trading or protection without trading forex directly, but they are still risky.
Monitor the economic calendar
Economic calendar is a free online tool that aggregates important macroeconomic news data such as interest rate decisions, CPI, inflation, employment rates, central bank announcements and speeches, and other crucial information. By monitoring them, investors can always know when important news data will be released, and they can postpone their investment decisions to avoid volatile times and only invest after the main trend is determined.
Features
The Canadian Dollar is on a slow decline. Should you save in euros or US dollars instead?
The Canadian dollar has been losing its value against the dollar this year. For Canadians, this raises a simple question: if your CAD is losing ground, is it better to move savings into euros or U.S. dollars, especially bonds, stocks, or a carry-trade strategy? Carry-trade strategy in this context means to borrow in CAD and invest it in the USA or the EU zone. This is a complex matter, and to understand where the CAD is, how attractive other currencies might be, we need to analyze these currencies more deeply. Below, we will walk you through the data, practical costs, and risks so you can reach a usable conclusion after reading this guide.
Quick snapshot – What the markets say right now
Recently, the Canadian dollar has hit multi-month lows due to weaker oil prices and a post-Fed (U.S. Federal Reserve) market reaction (which raised the rates, making the CAD weaker against the dollar). Canada’s central bank has cut its policy rate to 2.25%, while the Fed’s fund rate remains notably higher at about 3.75-4%. The ECB (European Central Bank) main interest rates are lower than the Fed’s and near the low-to-mid 2% range. While the Euro currency to USD rates remain mostly predictable, due to higher US bond yield rates, the EUR remains stronger, still. The U.S. 10-year Treasuries are around 4.1%, Canada’s 10-year near 3.2%, and Germany’s 10-year around 2.7%, meaning that today the USD-denominated bonds have the highest nominal yield among the three. As a result, the dollar seems much more attractive when it comes to bond yields and stocks.
Bonds – Which currency is the best for fixed income?
The short answer is: USD bonds. When it comes to nominal yield alone, US bonds beat almost all other competitors. U.S. government bond yields (10-year) are noticeably higher than Canadian and German/Eurozone bond yields right now. As a result, US bond buyers have more income potential than Canada and the EU. Euro-area core yields are lower, meaning they are paying less than the USA.
However, nominal yield does not mean it is guaranteed real return, and metrics like inflation, currency rates, and hedging costs can impact potential returns directly. If you buy USD bonds but the dollar falls against the CAD, currency losses will most likely wipe out the higher yield rate. If the Fed lowers its rates, it will make the dollar weaker against the CAD and EUR.
Another challenge is that, if you live and spend in Canada, you are using CAD, and when exchanging it for dollars, you get exposed to foreign currency rate risks, which must not be underestimated.
Stocks – Euro or dollar?
Both the EUR and USD have their advantages. USD has strong liquidity and strong long-term performance, while EUR equities offer valuation opportunities and recent relative strength.
Why USD?
The U.S. market remains the most liquid stock market with strong earnings for many tech and large companies. This makes USD stocks very attractive for long-term-oriented investors. S&P has been rising historically, and even after crashes, it often recovers its value relatively quickly.
Why EUR?
European indexes have performed well this year and in many cases cost less than their U.S. counterparts. While cheaper does not always mean better, these indexes still have some growth potential. Some major banks in the EU zone, together with industries, have recovered strongly with a recent focus on military manufacturing, making many EU stocks very attractive, together with local indexes.
However, here is a caveat: if you are using CAD daily and it loses its value against the euro, the returns from euro holdings might shrink, exposing you to greater currency risks.
Carry-trade analysis – Is it viable to borrow CAD and invest it in USD or EUR?
The basic promise of carry-trade is simple yet powerful: you borrow cheaper currency and invest it in currencies with higher yields. In our case, is it lucrative to borrow in CAD and invest in either EUR or USD? To answer this question, we need to look at numbers. BoC policy rate is 2.25%, Fed funds from 3.75%, U.S 10-yr is 4.1%, Canada 10-yr is 3.2%. If we deduct Canadian rates from the U.S. rates, we get around 1.8% positive before costs. So, in theory, it could be lucrative to invest CAD in USD assets using a carry trade. Since the ECB has around 2%, it is not profitable to use a carry-trade strategy for the euro.
The bottom line
While the CAD has been weakening lately, it is still not cheap enough to naively invest in USD or EUR. However, if you want a pure yield and can tolerate foreign exchange rate risks, USD bonds are more attractive today. When it comes to stocks, USD equities provide stable and liquid markets. If you want valuation potential and diversification, then euro equities have become more attractive this year. When it comes to carry-trade strategies, the USD remains more lucrative than the euro, but on paper, traders and investors should evaluate all the risks and costs before investing in any currency.
In the end, Canadians who have CAD for their daily costs should be careful when trying to get exposure to other markets. US bonds, US stocks, US carry-trade, and EU stocks remain attractive choices for experienced investors.