Investment Recommendation: Buy Canada

I'm only making a recommendation today because I have a very high level of conviction. The last time I got like this was when I was recommending everyone buy Bitcoin in 2013. I put my skin in the game then and am doing so again now.

My pick is the iShares S&P/TSX Composite High Dividend Index ETF (ticker XEI) at the current price of $13.08 CAD. 

With the coronavirus scare the S&P/TSX composite (OSPTX) dropped by 34% from the all time high, but XEI has fallen 45%.

The reason for the XEI index performing much worse than broader markets is due to crashing oil prices. For context, XEG, the iShares ETF that tracks Canadian energy stocks, is down over 70%. Meanwhile the Canadian dollar has been massacred, dropping 10% against the USD.

Because of this "triple whammy" of coronavirus plus collapsing oil plus a plunging Canadian dollar, we have a situation where even XEI, a diversified Canadian ETF which represents the Canadian economy as a whole quite well (it's mostly a mix of energy, utilities, financials, real estate, health, and telecoms) is crashing hard and down 11% more than the composite.

Oil at $22 USD (down from $63 USD in January) makes one feel like the world is playing a game of limbo chanting: How low can you go!? $15 a barrel? I doubt it...

Meanwhile, we have a government that has no raison d'être if not to promote and protect the business of natural resource extraction. It's just so much easier to imagine the Canadian energy sector recovering in the medium term, at least partially, that it is to imagine it getting much worse. And in the longer term, despite the current mess we're in, I still see Canada as a global leader.

With an almost comically high dividend yield of 7.83% right now, I think today is the day to pull the trigger and invest in Canada via XEI (or something similar).