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Opinions Keith Richards
BMO EQL WGT US BANK HDGD TO CAD IDX ETFZUB.TOTOP PICKDec 19, 2014
Keith RichardsOwned
$21.32
Stock price when the opinion was issued
$40.29
As of Jun 19, 2026. Market Open.
E.T.F.'s
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WAIT
Largest in the category. ZBK is unhedged, but there's a hedged version as well (ZUB). He'd opt to start hedging risk away a bit more, given what seems a concerted effort to weaken the USD. Gives you diversification in the US banks, instead of Canadian banks, as it's a different market and different economy.
Banks are very sensitive to the economy, and we're in a recessionary period. He'd wait for positive market follow throughs before allocating capital. If you're in it for the long term, you could buy this on the pullback. Interestingly, US banks are down about 21%, whereas Canadian banks (as in ZEB) are down 9%.
E.T.F.'s
PARTIAL BUY
Basket of US retail and diversified banks. Don't have to worry about currency moves. He like the USD, so he'd prefer not hedged. Banks have gotten hit on recession worries. An opportunity here, though you might be a quarter or two early. Financials tend to perform well early in the cycle, though we're not there yet. Very cheap at 1.4x book value. Pick away at it. Best opportunities come when people are most unsettled. He's picking up some US financials right now. Yield is 2.3%.
E.T.F.'s
BUY
Will US banks do well? Yes, the financials in the US will do well. Their economy and markets will do well this year, and so will their banks. Not worried at all.
John HoodOwned
E.T.F.'s
SELL
Time to cut losses? He has had a lot of questions on this one. Investors tend to run to banks when interest rates are thought to be rising as bank profitability tends to rise when rate spreads expands. US banks did not do well last year for various reasons. With the investment cycle going on he believes interest rates are likely to remain where they are, so the outlook for US banks is not likely to change. He might suggest selling and moving into a broader market based ETF.
E.T.F.'s
PAST TOP PICK
(A Top Pick Nov 22/19, Up 2%) Still likes the banks. Trend is still decent, despite the pullback. Will stay as long as highs and lows keep getting higher.
Keith RichardsOwned
E.T.F.'s
From a seasonal perspective, you tend to get a bit of a pop from December to around April or so. Chart shows an uptrend through 2013 followed by a consolidation in 2014. It is now just starting to break out. He will play this for the next 4-5 months.