It appears that the portfolios I manage have begun a slow climb up from their recent lows. At least for the short term, the bottom for the portfolios occurred on January 20, 2016. Given the recent high correlation of the stock markets to the price of oil, relative to the longer term lower correlation, it seems that the market turnaround occurred when the price of oil retreated from its low of less than USD 28. Assuming the price of oil will slowly increase, I purchased some XLE ETFs yesterday for between USD 55 and USD 56. It’s only one day out, but so far I’m not disappointed with my decision. Let’s see what happens.
Oil
The CAD and USD Price of Oil
I recently spoke with a Canadian who was recently laid off from his work in Alberta’s oil patch. He was lamenting the recent decline in the USD price of the CAD as he was taking his vacation abroad and his costs were in USD. Apparently, his stock broker had told him that the value of the Canadian dollar was unrelated to the USD price for oil. My response was that I believed that while the stock broker may have wanted to believe that the link was non-existent, reality shows something different. Click on VisualCapitalist to see a recent chart visually demonstrating the relationship.