How To Buy Stocks In Canada
If US stock market is too narrow for your investment focus, then you need to know how to buy stocks in Canada. While the US stock market has not been performing very well, the global market, especially Canada, has performed better, thanks largely to its natural resources. Buying stocks in Canada may seem difficult for some, but it is much easier than you think. Nonetheless, you still might need some instructions. So, here is the guide to buy stocks in Canada.
To buy stocks in Canada, you will need:
- A license discount or full service broker
- A computer (especially necessary for discount broker)
- A bank account
- Understanding the risks. You must understand that stock market outside of US has a tendency to be influenced by the geopolitical environment. Some factors when investing abroad are unpredictable. You need to be cautious when investing abroad.
- Find a licensed broker. Just like buying stocks on the US stock market, you will need a licensed stock broker in order to buy stocks in Canada. There are two types of brokerage: 1) Full service brokers, they provide with great advice and many will invest in stocks for you. They are also very expensive. 2) Discount stock brokers will charge a small flat fee for their service, provided that you researched the stocks yourself, tell them what to do and when you want to buy and how much do you want to buy.
- Evaluate online brokers. There are plenty of online rating agencies that review the stock brokerage, such as Consumer Report. You need to not only consider the fee, but also their services. Choose the broker that is licensed in Canada, and proceed to the next step.
- Set up your account. You will need a bank account and personal information, such as social security number. These information will be used when you have to pay taxes on capital gain.
- Pay capital gain tax. Any money you make through buying stocks in Canada will be taxed. Depending on your location, whether you are in US or Canada, you will need to pay capital gain taxes. For example, Canadian citizens will need to consult with Canada Revenue Agencies for details.