When understanding stocks, the market represents the global economy. Despite being a world leader in many areas, Canada actually makes up a rather modest part of the entire global economy, sitting at around 3%. In comparison, the USA almost represents a significant 20%, with China being the next closest with 15% of the global market. With this in mind, it is important to know how to buy stocks outside of Canada.
Canada’s stock market is the Toronto Stock Exchange (TSX). The TSX hosts Canadian companies, as well as other companies willing to accept Canadian investments. It can be quite tempting to only invest locally, which is actually known as home bias. To avoid this, but work with Canadian currency, search for the Canadian version of stock – even if it shows up on the international stock market.
Important: Often, to find the Canadian version of the stock, you must type ‘.TO’ after the main part of the ticker. This will prompt the Canadian version of a stock that is traded on the Canadian market. Always research your individual investments by looking at sector breakdowns and understanding how the investment will perform over time across different markets. Essentially, understand your investments and the companies you invest within.
Canada’s top brokers for trading stocks
($0.1 per share with $4.95 min / $9.95 max)
Considered the overall best option for trading stocks. Questrade is favoured among seasoned and new traders and is recommended by some of the most successful traders in Canada. This app allows easy navigation through both the Canadian and US stock market. It allows commission-free EFT trades and offers discounts to active traders. Furthermore, this broker comes with no annual fees. It is only available to Canadian residents and offers both mobile and desktop web-based platforms.
This user-friendly platform has a portfolio analysis and deeply developed stock research tools.
($0.005 per share with $1 min / 0.5 % of trade value max)
Considered the best for researching stocks. This app may not be the most suitable for casual investors due to being an international trading platform that sees mostly professional traders. However, once better versed in the market, using this platform to trade is satisfying due to its low-cost commissions, fees, and trading tools.The platform includes 135 markets across 33 countries, proving to be most effective for day trading, mobile trading, options trading, and futures trading.
TD Direct Brokers
(9.99 to buy or sell any share)
Nice and easy, TD Direct Brokers offers diverse trading tools and convenience by also taking care of your banking needs. Additionally, if you bank with TD, then this option would be a smooth transition, though it comes with significantly higher fees than other trading platforms. Furthermore, you have access to financial educators every day of the week.
CIBC Investor’s Edge
Investor’s Edge is a well-performing discount broker. If you bank with CIBC, then it’s a pretty effortless integration and quite safe. Like all major Canadian bank trading platforms, security and financial education are the most exercised factors, with little regard for being low-cost. However, CIBC does have some lower fees.
Wealthsimple is growing in popularity for its stylish design, easy set-up, and investing options. With the mobile app, it is easy to link your debit and/or credit card directly and start making micro-investments with no minimum deposit and low fees. However, there are no physical branches available to visit and very few human advisors for not yet established traders (those with less than $100,000 on their Wealthsimple accounts). Finally, there are limited portfolio options.
Depending on what’s right for you, these trading platforms are the most notable in Canada. Still, it is important to do your own research and find a platform that works best for you. Can’t wait to see you on the market!
“Risk forms from not knowing what you’re doing.” – Warren Buffet