In the first decade of this millennium, rampant demand for commodities fuelled by rapid growth in China, India and other emerging economies led to unprecedented interest in Canadian equities, as a result of which the benchmark Toronto Stock Exchange TSX Composite soared to a record high by June While the savage worldwide recession of took a toll on most major economies, Canada escaped relatively unscathed for a couple of reasons.

Firstly, the Canadian economy was in much better shape than most nations as the global economy was slipping into recession in ; thanks to the commodity boom, Canada was the only G-7 nation at that time to enjoy twin budget and current account surpluses. Secondly, the largest Canadian banks and financial institutions did not load up on toxic mortgage-backed securities during the U. As a result, the Canadian financial sector did not witness the cascading bank failures seen in the U. In the aftermath of the global recession, the Canadian economy was the first G-7 economy to recover all the jobs lost in the downturn, and also endured a relatively short-lived correction in housing.

Most of these companies have solid balance sheets, sound management, and long-term records of growth and profitability. While the benchmark TSX Composite index has approximately stocks, a sub-set of this index — the TSX — consists of the best Canadian blue-chips. Overseas investors may be familiar with a handful of Canadian companies such as Blackberry ; whose mobile devices ruled the roost before it was crushed by Apple and Samsung , TransCanada TRP.

TO , the pipeline giant whose Keystone XL project has been the subject of much controversy in the U. TO , which has been pursuing Botox-maker Allergan.

TO , Toronto-Dominion Bank TD. TO , Bank of Nova Scotia BNS.

How to Invest in Canadian Stocks and Bonds

TO and insurers Manulife MFC. TO , Sun Life Financial SLF. TO , giant energy companies Suncor SU. TO , Canadian Natural Resources CNQ. TO , the biggest commodity producers Potash Corp PRK.

Stocks - RBC Direct Investing

TO , Goldcorp G. TO , Barrick Gold , and some of the most profitable railways Canadian National Railway CNR. TO , Canadian Pacific CP. These stocks and funds can be purchased either through your online account or a full-service brokerage.

As with any investment, ensure that these stocks are suitable for your investment objectives and risk tolerance, and seek qualified advice if necessary. Also note that as investing in Canadian stocks may have certain tax implications for overseas investors, familiarize yourself with these tax aspects and discuss them with your advisor.

One criticism of the TSX is that it is too heavily weighted to cyclical stocks whose fortunes depend on the domestic and global economies.

As of July 21, , the three biggest sectors on the TSX were Financials comprising But if you believe that the long-term prognosis for the global economy is positive, and economic growth will translate into rising demand for commodities, TSX stocks are certainly worth considering for inclusion in diversified portfolios.

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Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. How To Invest In Toronto Stock Exchange Equities By Elvis Picardo, CFA Share.

Canada has fared better in boom and bust While the savage worldwide recession of took a toll on most major economies, Canada escaped relatively unscathed for a couple of reasons.

So how does one invest in TSX stocks? There are two basic avenues of investing in TSX equities — Interlisted stocks: Interlisted stocks are those that are dually listed on a Canadian exchange like the TSX and on a U.

The major benefit of interlisted stocks to the U. More than three-quarters of the 60 stocks that comprise the TSX blue-chip index are interlisted including all the ones mentioned in the previous section.

In fact, many of these interlisted stocks have the same ticker symbols on Canadian and U. Altogether, close to Canadian stocks are interlisted on U. Exchange-traded funds and mutual funds: ETFs and mutual funds are another popular method of investing in a basket of TSX equities.

Its top ten holdings as of July 21, were — Royal Bank, Toronto-Dominion Bank, Bank of Nova Scotia, Suncor, Canadian National Railway, Canadian Natural Resources, Bank of Montreal, Enbridge, Valeant Pharma, and Manulife Financial. The ETF has an expense ratio of about 0. The Bottom Line One criticism of the TSX is that it is too heavily weighted to cyclical stocks whose fortunes depend on the domestic and global economies. The author owned shares of Manulife and Suncor at the time of publication.

Find out how the third-largest stock exchange in North America came to be. Canada, one of the wealthiest countries, is also one of the safest places to invest. Canadian stock markets are home to some of the best companies across sectors such as finance, energy, mining and minerals.

Learn about the Canadian stock market and why it has declined over the past five years. Understand if now is a good time to invest in Canadian stocks. Understand what's happening with the Toronto Stock Exchange in Learn about four of the top stocks on the Toronto Stock Exchange for the coming year.

Discover why investing in Canadian stocks makes sense and which Canadian companies to invest in even with oil prices at multi-year lows. The TSX Venture Exchange is a Canadian-based junior listings market that houses many micro-cap and small-cap firms.

Learn specific information about three of the most popular and best performing ETFs that offer exposure to Canadian equity markets for U.

Stocks - RBC Direct Investing

While there are certainly some differences, American and Canadian investors have more in common than not. When the price of oil goes up, don't worry about how much gas is going to cost - get even by making a play on the Canadian dollar.

Discover why some investors prefer Canadian to U. Learn how trades of Canadian bank shares are executed in both Learn key indicators used by analysts to follow the Canadian stock market and to gauge the condition of the overall Canadian Read about the four major reasons Target's expansion into Canada ended so abruptly and quickly after expanding into northern Learn about the Canada Pension Plan and how it adjusts its contributions and benefits each year for changes in inflation No thanks, I prefer not making money.

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