How‌ ‌and‌ ‌Why‌ ‌You‌ ‌Should‌ ‌Invest‌ ‌in‌ ‌Canadian‌ ‌Stocks‌ ‌

Living a fulfilled life is about making a difference in the world, but we can all admit that being rich is a pretty sweet deal too.

It allows us to adopt the kind of life we want, take exciting adventures, buy commodities, and even though it can’t buy happiness, it can buy things that can make us happy.

The sad thing is that money doesn’t grow on trees. You either work for it and be smart enough to keep it in your pockets, or it’s gone just as fast as it came.

Therefore, we all look for channels to invest the little we have, to see it grow and give us more money in the long run. Real estate, bonds, shares, businesses, you name it.

And we all know that investing in stocks is a smart idea.

Shrewd investors have realized that the stock market is a gold mine. Canadian stocks are particularly appealing for many reasons which you’ll get to see later… So how can you dig this Canadian gold mine?


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A brief overview of stocks for newbies

First, for newbies, stocks (also called shares) are basically parts of a corporation you purchase to own part of the corporation. You are therefore entitled to the companies’ profits.

If, for example, you purchase 100 shares in a company with 10,000 shares, you own 1% of the company and deserve 1% of the profits.

To pick the right kind of stocks to invest in, research is conducted to evaluate how a stock is priced and to ensure you invest in a company that has a high dividend growth potential to make your investment count!

Now, let’s dive into Canadian stocks.

Canada’s robust economy

Canada’s economy is robust, one that stands on a strong foundation formed by its stable monetary policy and natural resources. Besides this, it has been named one of the safest countries in the world.

This makes the nation have an impressively low budget deficit, stable inflation rate, and, additionally, has a GDP of about $1.7 trillion, which makes it one of the richest nations in the world.

When it comes to business, though the economy is driven by the service industry, the natural resource base forms a strong framework for exporting. Crude oil and precious metals specifically stand out.

Unlike oil-producing countries prone to inconsistencies due to changing oil prices, Canada’s economy is sturdier thanks to the low budget deficit. It compares with Asian and European economies.

For this and many reasons, investors want to be part of the seemingly bright future of Canada.

In 2019, an increase of about $1.5 billion attributed to new ventures and capitalists was recorded, which goes to show that Canada’s growth potential is evident to many entrepreneurs, especially in the U.S.

So how can I buy Canadian stocks?

Now to the nitty-gritty, the easiest way to purchase Canadian stocks is via ADRs and ETFs listed in the U.S. They enable you to buy single securities that open a window of hundreds of stocks.

ETFs do the ‘dirty’ work for you by monitoring and analyzing Canadian industries, and the whole economy all together. ADRs make your work even easier by allowing you to buy shares into the desired company without the need for foreign exchange, which is cumbersome.

Common exchange-traded funds (ETFs) include Canada Energy Income ETF (NYSE: ENY) and MSCI Canada Index Fund (NYSE: EWC). While popular American Depository receipts (ADRs) include Canadian National Railway (NYSE: CNI), Brookfield Office Properties Inc. (NYSE: BPO), and Bank of Montreal (NYSE: BMO).

Alternatively, you could also choose the more involving traditional process using Stock exchange platforms like The Toronto Stock Exchange (TSX), The Canadian Securities Exchange, and U.S. Brokerage houses.

In TSX specifically, the top-performing industries will often be listed in the 60-index. In contrast, new companies will be listed in the 50-index.

On the other side, foreign exchange rates could mean additional cost on your side, so seek advice before following this route. However, even if you’re investing through ETFs, the information found here is invaluable.

Final thoughts

As an intelligent investor, the time to make money moves is now. Canada has a promising future.

Through extensive market research, you could easily find yourself a million-dollar investment in the Canadian stock market. Use company reports, review financial statements, stay up to date, and simply speak to an expert for advice if you’re a newbie.

Other than this, analyze external factors like the industry’s potential in the global climate, the political environment, and the customer base.

Remember not to put all your eggs in one basket, no matter how good the deal looks. Don’t put all your money in stocks, as no one knows what the future holds. Instead, put a percentage of your monthly income into buying stocks.

Stay put, ready to buy and sell more as time goes by to remain firm even when it crumbles. In fact, stop-loss orders were invented to save smart investors.

If your gut warns you about a certain company, make sure you take advantage of stop-loss orders. Finally, keep tabs with the Canadian economy using the bevy of resources available to you online.

Bio: Chris Muller

Chris Muller is a financial writer and digital marketer – he started a digital marketing business in 2015 that focuses on freelance writing, content marketing, and SEO – all while working full-time and playing dad to two kids.