How to Invest in Stocks in Canada [2025] | Step-by-Step

Investing in stocks is one of the oldest and most effective investment methods with high long-term profit potential. However, investing in stocks also carries some risks, so due diligence and a lot of research are mandatory. In this guide, you will learn how to invest in stocks in Canada, as we are highlighting some of the advantages and disadvantages of such an investment strategy, and providing some practical tips on how to make your investments more fruitful. 

Best Platform for Worldwide Stock Trading & Investing

• Highly trusted multi-asset broker with clients in over 200 countries

• Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)

• Low commissions starting at $0 with no platform fees or account minimums

• Easily fund your account and trade assets in 26 currencies

• IBKR pays up to 4.58% interest on cash balances of $10k or more

Up to 4.58% interest on balance*

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How to buy stocks in Canada?

Investing in stocks in Canada is more straightforward than you think, as we nowadays have several investment options at our disposal. For the most efficient and convenient investment, however, your best bet would be to set up an account at an online brokerage, such as Interactive Brokers (IB).

How to buy stocks in Canada: Step-by-step

While investing in stocks might sound intimidating for new investors, the process is quite simple. Nowadays, online exchange platforms offer clients a user-friendly interface and a lot of customizable features that allow them to tailor their investing experience to their specific needs. 

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

Step 1: Select a broker

To invest in the stock market safely and conveniently, you must find a reputable, licensed broker. More experienced traders will look for brokers that cater to their specific trading strategy (e.g.,  buy-and-hold or day trading), but newbies are advised to look for user-friendly platforms with a good range of financial instruments and educational material. 

When choosing a broker, consider factors such as:

• Reputation: Look for brokers that hold licenses issued by Financial Conduct Authority (FCA), National Futures Association (NFA), Financial Industry Regulatory Authority (FINRA), etc.;

• Fees and commissions: Lower fees are a huge plus for any broker. However, be sure that lower fees do not come at the expense of other equally as important features;

• Range of offerings: The more investment products a broker offers (e.g., mutual funds, exchange-traded funds (ETFs), and options), the better;

• Customer support: New investors often have a lot of questions on their minds, so prompt customer support is invaluable;

• Security: Cybersecurity is starting to become everyone’s paramount concern, especially when it comes to finances. Therefore, look for brokers that take all the necessary precautions to safeguard client data.

Where to buy stocks

To purchase stocks in Canada, we recommend Interactive Brokers (IB), a well-regulated and safe online exchange with over 2 million registered users. IB holds licenses issued by bodies such as The US Securities and Exchange Commission (SEC), National Futures Association (NFA), and Commodity Futures Trading Commission (CFTC). Moreover, the platform offers 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.

Best Platform for Worldwide Stock Trading & Investing

• Highly trusted multi-asset broker with clients in over 200 countries

• Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)

• Low commissions starting at $0 with no platform fees or account minimums

• Easily fund your account and trade assets in 26 currencies

• IBKR pays up to 4.58% interest on cash balances of $10k or more

Up to 4.58% interest on balance*

Get Started

Step 2: Decide what kind of stocks you want to buy

Once you’ve found a broker, you can start thinking about what kind of stocks you want to buy. The stock market is massive, so you’ll have to do a lot of research before you can be sure that your investment is going to yield profits.

Some of the most commonly traded stocks include:

• Common or ordinary stocks: Common stocks, also known as ordinary shares, are the most common stock type. In essence, when you purchase common stocks, you become a partial owner of the company that issued it, and your profits start to depend on the company’s performance on the market;

• Growth stocks: As their name suggests, growth stocks are stocks projected to grow at a faster rate compared to the general market. That is, they tend to flourish during times of low interest rates and economic expansion;

• Dividend stocks: Dividend stocks are stocks issued by companies that distribute a portion of their income to shareholders. These payments are called dividends, and they usually come as cash. However, some companies issue them in the form of additional stocks.

• Blue-chip stocks: Blue-chip stocks are stocks issued by large companies with a well-established presence on the market (think Apple). As you can expect, blue-chip stocks are popular because the company’s track record usually promises returns;
• Value stocks: Value stocks are stocks issued by companies that the investing public has agreed are underpriced compared to their intrinsic value.

The best Canadian stocks to buy in 2025

Some of the most commonly bought stocks in Canada include:

1. TELUS (TSX:T): One of the major internet providers that put $40 billion into 5G technology;
2. Royal Bank of Canada (TSX: RY): The largest bank and financial institution in Canada with a marketp cap of over $250 as of 2024;
3. Alimentation Couche-Tard (TSX:ATD): A convenience store chain with over 12,000 physical branches;
4. Canadian Natural Resources (TSX:CNQ): An oil and natural gas company with offshoots in the United Kingdom and some African countries;
5. TMX Group (TSX:X): The financial services company behind the Toronto Stock Exchange.

Step 3: Decide how much you want to invest

Once you have chosen what kind of stock you want to invest in, it’s time to decide how much you want to invest.

The precise numbers you’re going to be working with will depend, first and foremost, on your financial goals but also on the current stock price and the number of shares you want to obtain. If the share price of the company that caught your attention seems out of reach, be sure you don’t make any impulsive decisions, as emotional buying is one of the most common mistakes investors make. Instead, try to think long-term. Invest in stocks that have a more promising potential for returns based on the company’s fundamentals.

Step 4: Deposit funds into your account and place a trade

Having figured out how much you want to invest, you start adding funds to your investing account. The most convenient way to do that is to your bank account to your broker, but you can link your broker account with a third-party payment method, like PayPal (PYPL)

Once you’ve funded your account, you can start investing. If you’ve chosen Interactive Brokers, simply:

1. Log in on the Interactive Brokers website and look for your selected company’s 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);

4.  Submit the trade.

Step 5: Monitor and manage your investment

Finally, to ensure your investments are profitable, it is mandatory that you monitor its performance constantly. This might deter some investors who prefer more passive investment strategies, but it’s the only sure way to experience profits.

After all, by actively engaging with your investment, you’ll be in a position to understand the whole market better and get up to speed with the latest developments in the industry you invested in. In turn, this kind of accumulated knowledge will help you adapt and adjust your future investment strategies more effectively, yielding a more stable long-term income.

Pros and cons of investing in stocks in Canada

Pros

• Liquidity: If you buy the right stocks, you will have no problems selling them, as stocks are often highly liquid;
• Potentially high returns: Stocks have among the highest potentials for high returns, which makes them a better option than, say, bonds if you’re investing long-term;
• Diversification: By investing in different sectors and industries, you can easily diversify your portfolio and create a hedge against inflation;
• Dividends: Many Canadian companies distribute dividends to their shareholders, so you can earn some additional passive income.

Cons

• It’s an active investment: Investing in stocks can be time-consuming, as it’s an active investment method that demands you do constant research on the market and adjust your trading strategy as needed;
• The market is volatile: The stock market can be highly volatile, so investing short-term is not always viable. While the stock market has been steadily growing over the decades, there have been some years when the returns were lower. For example, the S&P/TSX 60 index comprising some of the largest companies on the Toronto Stock Exchange saw its returns grow by over 24% in 2021 and then drop over 9% in 2022;
• You might lose confidence: Since the market can be volatile, it is possible that it just won’t go in your favor for a long time. This can lead to some impulsive decisions and, thus, further losses.

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