"It may now be a sensible time to start thinking about locking in some of that profit and switching back to Canada, especially as the currency is at its weakest for a couple of years," says Gavin Graham, president of Graham Investment Strategy.
The Dow Jones has recorded a series of record closing highs since March 5, while the loonie has been trading below parity with the U.S. greenback since early February — closing at 97.82 cents US on Thursday.
That means U.S. dollars pocketed from cashing out of high flying American equities will now buy more Canadian dollars than they would have earlier this year.
Graham said investors should focus on sectors such as resources that have underperformed in Canada.
Even with a eurozone drag, a gradually improving American economy and prospects that Chinese economic growth will be maintained at around 7.5 per cent should help Canada's resource-based economy and the TSX over the next six months or so, he said in an interview.
The Dow has shot up a solid 10 per cent this year while the S&P 500 is up nice per cent. The commodity sensitive S&P/TSX composite index is up just 2.8 per cent, held back by the weak performance of gold stocks, among others.
While the Dow has made an impressive turnaround from the crash in 2008, its performance over the last dozen years has been weak in real terms when adjusted for inflation.
"It's nice that we are back to all-time highs in nominal terms... but more importantly it's been a lost decade as far as returns are concerned for the index as a whole," Graham said from Toronto.
Some sectors have done well, but investors have generally fled to bond funds over the last five years because they've made no money in real terms in the stock market.
Canadian investors with little exposure to the U.S. market have missed out the best opportunity to benefit from the run. But Graham said most Canadians have U.S. holdings through major Canadian funds which have investments in technology, pharmaceutical and consumer companies that aren't readily available in Canada.
Adrian Mastracci says that the run-up in the U.S. exchanges is an opportunity for investors to crystallize some profits and rebalance their portfolios in accordance with their long-term plan and goals.
Far too many investors chase headlines to buy and sell shares on emotion. The portfolio manager at KCM Wealth Management says average investors should follow a pre-set plan instead of trying to time the market.
"Emotions are for that special person in your life, not for investments, so park the emotions aside, come up with a game plan that works for you and just employ it time after time after time," he said from Vancouver.
Canadian investors typically devote 15 to 25 per cent of their equity holdings to companies based in the world's largest economy.
Mastracci suggests investors who want to invest more in the United States gradually make changes over several months instead of putting all their money in the market at once.
He expects the bull run in the U.S. markets will likely continue as long as the Federal Reserve pumps in billions of dollars into the system.
Gareth Watson, vice president at Richardson GMP Ltd., cautions about making dramatic changes in a portfolio because of fluctuations in the exchanges or currency.
"You should avoid making short-term trading decisions based on long-term investing goals," he said in an interview from Toronto.
"So if you have gone into the U.S. as part of your longer-term plan, don't be trading back and forth on a regular basis between the two countries. Stick with the plan."
That means focusing primarily on the characteristics of individual companies that attracted an investor in the first place.
"Unless those have changed, there shouldn't be huge reasons for you to go out and make a lot of changes in your portfolio at this moment."
He said the U.S. bounce can be traced back to last summer after the European Central Bank said it would rescue an eurozone country in crisis.
Watson added that investors don't necessarily need to be in a hurry to increase their Canadian exposure since the pickup in global growth that would lift the TSX will be moderate and won't likely have until later this year.
"I don't think the pickup in commodity prices is necessarily in the immediate future and so for that reason I don't think there needs to be a rush to get back here."
Still, he says that investors who have adopted defensive portfolios might want to expand their holdings over time of cyclical stocks such as industrials, technology, resources, materials and energy.
"I don't necessarily think that people need to change that makeup a great deal, but if you want to capitalize on the potential for global growth, over time you are going to have to increase your exposure to more cyclical areas of the economy."