Yes, Canadians can trade, invest and own US stocks. Grab more details on US stock market investing from Canada.
Canadians investing in the US Markets
The vital tool for having a healthy portfolio is to diversify the portfolio across various industries, asset classes, sectors and countries. Exposure to international markets is in the vogue now. An international portfolio is the one that has a blend of stocks, bonds or ETFs from other countries.
The United States of America is the biggest economy in the world and the happenings in Wall Street has a direct impact on the world’s economy. Top companies like Apple, Tesla, Microsoft, Netflix, Tesla, Amazon, Facebook, Alphabet or Berkshire are all US based. Hence, Canadians always fancy investing in the stocks of their neighbors.
Can I own US stocks in Canada?
Yes, Canadians can trade, invest and own in US stocks. There are a number of brokerage platforms in Canada that give you access to trade or invest in the US stock Markets. Step one is to choose the right trading platform that is best suited for you. You have options to choose from platforms like Interactive Brokers, Wealthsimple, QTrade, Questrade, CIBC Investor’s Edge etc., Here we have compared the features of the platforms:
Based on your preferences, you can choose a trading platform. For example, if you would like to invest only in American shares, you can go for Wealthsimple as it has no fees. If you would like to invest in a range of US investment asset classes, you can choose Questrade that covers almost all asset types. The choice of a broking platform depends on your needs and objectives. You must also look into educational tools provided, availability of real time data and quotes, access to customer service, etc.,
What are the Pros and Cons of Canadians investing in the US Markets
Advantages
- You can diversify your portfolio
- You get access to performance of top companies
- There is a possibility to mitigate the risk of your portfolio
- Take advantage of foreign exchange rates.
Disadvantages
- The fees for accounts trading in US stocks are generally higher than those trading in domestic markets
- Exchange rate fluctuations
- Need to pay fees to convert US to CAD
- Tax implications. The Canadians who invest in US shares must pay a withholding tax of 15% on the dividends they receive and 10% on the interest income they receive to the Internal Revenue System of the US.
Canadians Owning US shares
Thus, trading and investing in US shares for Canadians, has never been this easy. There are a plethora of trading platforms that will help you get exposure to the biggest and the most impactful share market. However, it is important that you analyze your financial situation, needs, objectives, features of the trading platform and the implications of such investments before you commence investing.