Buying DVC - Canadian version questions

[deedubb]

If you go CAD -> USD and then the exchange rate changes and you go USD -> CAD haven't you just cemented your loss? Unless you have some method or hedge to allow you to convert back at your original exchange rate?

Haha, yes you are correct. This would again be a guessing game...ie. dollar drops significantly, convert back to CAD on the thought that it will climb again before I need to use the money. Overall, it would not be worth the risk as the amount saved would be minimal.

 

[Kaadk]

If you go CAD -> USD and then the exchange rate changes and you go USD -> CAD haven't you just cemented your loss? Unless you have some method or hedge to allow you to convert back at your original exchange rate?

All depends on how the exchange rate changes. Normally, if you straight up convert CAD->USD->CAD with no changes in the exchange rate, you'll take a loss. This is because the banks charge different rates for the conversion. Let's say the rate is currently at 1.35. You might pay 1.36 or 1.37 to buy the USD, and when you switch it back, you'd only get like 1.34 or 1.33.

So, to avoid loss, you'd need the US Dollar to raise to like 1.39, at which point, after the banks take their cut and you get your 1.37 or so, you're even with what you paid. If it really goes up, you might be ahead, but you'd have to be able to sit on it for a while.

I'm facing similar losses (percentage wise, not volume wise) with our cancelled trip. So far, for what we've been able to get money back on, I've lost 1.67%, 2.98% and 2.44%.

 

[musika]

no worries at all. Any questions feel free to send me a PM. My husband made a spreadsheet to compare all the resorts and prices, with the ability to plunk in specific contracts to see their relative value - I’d be happy to share if you’d like.

I hope your 2021 trip is a go as well. Crossing my fingers for a super fast vaccine. If we can’t go to WDW in March I am toying with the idea of Aulani for summer 2021 instead. That’s the nice flexibility owning DVC brings. There should be some good resale contracts coming up soon... likely a great time to buy. Good luck !

Way late to the ball game, but I would be interested in your spreadsheet as well!

 

[bababear_50]

started a new thread about selling.
Hugs
Mel