Buy Canadian Bank stocks.

If you are thinking of buying a bank stock since Citigroup, Bank of America, JP Morgan, etc have been pounded lately (except for today's big rally), why not just stick with 2 best of breed stocks in Canada that don't have much exposure to the U.S.. That would be Royal Bank(RY) and Toronto Dominion(TD).

Both stocks provide a good yield and have a strong balance sheet and will move when the bank industry recovers. If you have U.S funds, you can even think about exchanging it to Canadian dollars to buy the Canadian stocks. 1 US dollar is now 79 cents Canadian! Amazing that it was at par a couple of months ago. I wish I transferred all my Canadian money to the U.S dollars. That would have been a quick 15% return.

"six reasons to like TD:

• Domestic retail business should continue to outperform despite a cooling housing market.
• With roughly 90% of the bank’s earnings coming from retail, 2009 EPS estimates are more sound.
• There is low risk of a major U.S. acquisition in the near term, unlike other large cap Canadian financials.
• Year-over-year EPS changes probably bottomed in the third quarter.
• Higher funding costs make TD’s strong retail deposit franchises in Canada and the U.S. all the more important.
• TD’s loan loss ratio is less worrisome than most Canadian banks."-Stock Article Link
  

Canada's 2 big banks' earnings surprise back in Aug