How to Invest in Canada Stock Market [2024]

Summary: Investing in the stock market in Canada is a tried and tested method of ensuring potential long-term profits while also diversifying your portfolio and gaining exposure to a potentially large number of sectors, both domestically and internationally. To buy stocks in Canada conveniently, investors can register an account at online brokerages like Interactive Brokers.

How to invest in Canada stock market?

Investing in the stock market in Canada is more accessible than you probably think. In fact, it largely boils down to finding a reputable investment platform and figuring out what kind of stocks to invest in, that is, finding an investment option that will hinge on your trading strategy.

How to invest in Canada stock market: Step-by-step

To start investing in the stock market in Canada, you can take the following steps:

Step 1. Find a broker

In Canada, you can sometimes invest directly through your bank. However, finding a reliable investment platform and investing yourself without an intermediary is a much better option, as it gives you a lot of autonomy.

When looking for an investment platform, consider factors such as:

• Reputation and track record: Brokers licensed by Financial Conduct Authority (FCA), National Futures Association (NFA), Financial Industry Regulatory Authority (FINRA), and similar institutions should be the only ones worth your attention;

• Fees: Having to pay a lot of fees will mean smaller profits, so be sure you know how much the broker is going to charge you for various services;

• Research tools: Not all platforms offer a comprehensive set of market research tools, so those that do have an obvious advantage;

• Customer support: If the investment platform is not responsive, it’s safe to assume it does not prioritize its clients;
• Account types: It’s always a plus if the platform allows you to open various types of accounts and micromanage them separately (for example, cash accounts and margin accounts).

Where to buy stocks in Canada

To buy stocks in Canada, we recommend Interactive Brokers, a regulated online exchange with almost 50 years of solid presence in the market and more than 2 million registered users engaging in commission-free stock trading worldwide. 

The exchange holds licenses issued by The US Securities and Exchange Commission (SEC), National Futures Association (NFA), and Commodity Futures Trading Commission (CFTC) and brings features such as:

• Commission-free stock trading;
• Global stock-trading on 90+ market centers;
• Fractional shares;
• No minimum deposits;
• Additional income on fully paid shares;
• Lowest financing rates for margin accounts.

Step 2. Research potential stocks

There are a number of different types of stocks on the market, each with its own advantages and disadvantages:

• Common or ordinary stocks: Most ordinary stocks — when you buy them, you become a partial owner of the company that issued them, and your start generating a profit based on the company’s financial performance;

• Green stocks: Stocks with a good ESG rating, i.e., stocks issued by companies the investing public agrees are taking a sound approach to tackling environmental issues;

• Growth stocks: Stocks projected to grow faster than the general market;

• Dividend stocks: Stocks issued by companies that divide a portion of their income among shareholders in the form of dividends;

• Blue-chip stocks: Stocks issued by large companies with recognizable brands (e.g., Apple);
• Value stocks: Stocks issued by companies whose intrinsic value is estimated to be larger than what they are currently worth.

The best Canadian stocks to buy in 2024

As of 2024, some of the most commonly bought stocks in Canada include:

1. TELUS (TSX: T): Internet provider, one of the pioneers of 5G technology;
2. Royal Bank of Canada (TSX: RY): The largest bank and financial institution in the country;
3. Alimentation Couche-Tard (TSX: ATD): A convenience store chain with 12,000+ physical locations;
4. Canadian Natural Resources (TSX: CNQ): An oil and natural gas company;
5. TMX Group (TSX: X): The financial services company providing machinery for the Toronto Stock Exchange;
6. Northland Power (TSX: NP): A power producer operating green power infrastructure assets on multiple continents.

Other popular Canadian stocks include:

1. Tim Hortons (TSX: QSR);
2. Lululemon (NASDAQ: LULU);
3. Enbridge (NYSE: ENB);
4. Dollarama (TSE: DOL);
5. WestJet (TSX: ONEX).

Step 3: Deposit funds into your account and place a trade

Having chosen your exchange platform and done some research regarding the company you’d like to invest in, you can start placing trades and adding stocks to your portfolio.

First, you’ll have to fund your brokerage account, either by linking to your bank account or by using some third-party payment service, like PayPal (PYPL) or the Canadian Interac e-Transfers service.

Next, you can:

1. Log in on your broker’s website and look for the desired ticker stock symbol;

2. Specify the number of shares you want to buy;

3. Select the order type that suits your strategy better (market order or limit order, i.e., buying stocks at their current price or when they hit a certain price threshold);

4.  Submit the trade, i.e., process your order.

Bonus step: Monitor and manage your investment

Monitoring a stock portfolio demands a lot of attention, which might put off investors who prefer passive investment strategies. However, it’s the only sure way to experience profits.

Of course, you won’t have to keep track of everything 24/7. The frequency at which you should check your stock’s performance will depend on your chosen investment strategy. Veterans in the market who engage in frequent buying and selling will likely review their stocks every day. On the other hand, long-term investors (i.e., those engaging in buy-and-hold strategies) will not check their portfolios as frequently.

Be that as it may, by actively following the performance of your asset, you’ll get a deeper understanding of the whole market and the industry. Consequently, you’ll be able to adjust your future investment strategies and ensure further profits.

Pros and cons of investing in stocks in Canada

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about investing in stocks in Canada

How to invest in the stock market Canada?

To invest in the stock market Canada, register an account at a reputable online exchange like Interactive Brokers and start placing trades.

Where to buy stocks in Canada?

You can buy stocks in Canada on online exchange platforms and brokerages such as Interactive Brokers.

How to invest in foreign stocks in Canada?

You can invest in foreign stocks in Canada by registering an account at online exchanges like Interactive Brokers and purchasing stocks in foreign companies listed on the platform.

What is the largest stock market in Canada?

The largest stock market in Canada is the Toronto Stock Exchange.

What is the Canada stock market cap?

As of December 2023, the Canadian stock market cap is around $2.71 billion.