Dividends4Life: Dividends from The Land Down Under or the Great White North

The Land Down Under or the Great White North? Many investors are starting to ask that question as natural resource prices wend their way higher here in early 2011 and more want to get on board the bull market. Both countries have plenty of buried treasure as well as agricultural bounty. And as former pieces of the British Empire, both have long established histories of fostering both domestic and foreign private investment, with rule of law, developed financial and physical infrastructure, relatively light regulation and few if any capital controls.

Many factors affect exchange rates. But both the Australian dollar and the Canadian dollar--nicknamed the “loonie” in honor of the ubiquitous bird--show a close relationship with the price of oil. When black gold’s price rises, so does their value in US dollars. That adds up to a powerful windfall for US investors. Not only does a rising Aussie dollar or Loony push the US dollar value of the stock or bond in question. It also lifts the US dollar value of dividends, in effect conferring a dividend increase. And both countries are certainly famous for dishing out cash to shareholders

Source: Investing Daily

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