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How to buy Stocks in Canada?

Formerly, investing in stocks was a time-consuming and expensive undertaking that entailed spending hours on a call with your broker, researching companies in a local library, as well as paying steep commission fees. However, the digital world now has democratized investing. With this, stock investment has become more affordable and accessible than ever before. Even more, due to the increasing lifespans of the present, it also has become necessary than ever before.

With this, getting started in the stock market in Canada has become as easy as putting some dough together to invest and signing up with an investing service online.

how to buy stocks in Canada

Understand what stock is?

The stock, also known as equities or shares, is one of the major investment classes available to investors. Buying stock in a company means holding shares in that particular company and have a claim to its profits in dividends form. In some cases, you will also be eligible to vote in the company’s shareholder meetings.

However, when you are going to sell the stock of a company, it is going to be for more or less than what you have paid for it. This will result in a capital loss or gain.

While being one of the major investment options available in Canada, stocks are considered to produce the highest return on investment historically over the long term. At the same time, stocks are the riskiest investment option as well.

A complete guide on how to buy stock in Canada

Buying stock and holding onto your investment for a longer period of time is one of the most common and best ways to grow your wealth for generations. However, when it comes to buy stocks in Canada, then the process used to be tedious for beginners. But now, the availability of online brokerage account in Canada has made things pretty easier for everyone.

Because it is not only allowing you the best ways to sell and buy thousands of stocks without leaving the comfort of your home but can also help you to do so in an affordable way.

Even more, in Canada, you are not only allowed to invest in individual stocks or equities via online brokers but can also grab the opportunity to hold stocks using ETFs (Exchange Traded Funds) that can be purchased via a brokerage platform or a Robo-advisor.

However, if you are looking for how to buy stock in Canada, here we have brought a complete guide that will help you to make the most out of it with ease.

Ways to invest in stocks in Canada

Getting started to invest in stocks in Canada has become easier. As for now, it is not necessary to invest plenty of money. Rather you can make a start with a small amount as well. However, some brokerage platforms have minimum investment requirements that you need to meet to invest in stocks successfully.

However, here are some key steps that you must follow to invest in stocks in Canada:

1. Open an online brokerage account

When it comes to open an online brokerage account to invest in stocks in Canada, then you must understand the fact that online brokerage platforms are varying from brokerage firms to independent discount brokers in Canada.

Discount brokers can help you to save a lot of money in terms of commissions and stock trading fees. So, make sure to open an online brokerage account once you have found out the best online brokerage as per your investment needs so that it could become easier for you to make the most out of it.

2. Choose your preferred investment account

In Canada, you can invest via registered and non-registered accounts. However, the most popular registered stocks investment accounts include:

  • TFSA (Tax-Free Savings Account) is an account option that will help you to invest and get tax-free returns throughout your life. This can help you to make savings for both long and short-term investment goals.
  • RRSP (Registered Retirement Savings Plan) is commonly used to save for your retirement. It will defer taxes on your earnings until you are going to make withdrawals.
  • RESP (Registered Education Savings Plan) is intended to make savings for your child’s post-secondary education.

However, for personal and business use, you can also consider your non-registered account as well.

3. Set up an automatic deposit

Once you have decided on your investment account, funding your account is essential to begin buying stock. For this, you need to set up a deposit. Well, the process is easier, as you just have to link your savings account with a brokerage account to transfer funds.

More often, brokers also offer the option of an automatic deposit from the account. You can choose this option to make funding your brokerage account regularly.

4. Choose your investment approach

Once you have funded your account and set up a regular contribution. Now, this is the time to consider the type of investment approach you want to go with.

  • An index investment approach is the easiest option in which you have to buy an ETF that can track a broad stock market index. With this, you can develop a diversified portfolio with just up to 4 ETFs that make up the Canadian market.
  • Dividend investing is the next approach to consider here. But it comes up with its own pros and cons. However, some investors prefer to build their portfolio with dividend stocks, especially the ones that can increase their annual dividend payouts, as these stocks tend to perform well in the long-run.
  • Growth investing is another preferred stock investment approach investor used to consider in Canada. And it can be enjoyable investing your money in the companies that tend to offer better growth. These investments have the potential to offer great capital gain.

5. Analyze stocks before investing

Now here comes the last step, which is doing your research before buying stock in Canada. Whether you are looking for value or growth, you can divide the stock analysis into fundamental and technical analysis with ease.

  • Fundamental analysis is based on the company’s available data to determine its intrinsic value, financial health, and growth potential.
  • Technical analysis is based on the use of historical price patterns and charts of a company to forecast the future price of stocks to make a well-informed decision.

More often, the brokerage account also offers access to charting tools. Otherwise, you can also prefer to use a stock screening tool to analyze stocks and make a better decision with ease.


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