The American stock market is the place to be, let’s face it. Yes, Canada has one, and it is brimming with fantastic chances for all kinds of investment schemes. The international gold standard is, however, the American stock market. The cost and ease of investing in US equities from Canada are both favourable.
Several online trading platforms provide Canadians access to the New York Stock Exchange (NYSE) and the NASDAQ, two of the most important international stock markets where you may purchase shares in businesses like Tesla, Netflix, and Meta Platforms (Facebook). For many Canadians, investing in US equities is an appealing approach since it is a crucial tool for portfolio diversification.
Which stock trading platform should you use if you want to trade in US equities out of the many options available? Why should Canadians invest in US stocks?
1. Previously higher returns
2. Access to the American market.
3. Increase portfolio diversity.
One of the strongest economies in the world is the United States. The S&P500 index on Wall Street has generated annualized average returns of around 14.1% over the past ten years, while the S&P/TSX index in Canada has generated annualized average returns of about 6.9%.
Even though stock returns have generally followed a favourably biased bell curve distribution, stocks can have substantial volatility. The average total annual return between 1825 and 2019 was 9.56%. In fact, nearly 70% of all yearly returns over that period were positive.
Long-term stock ownership may enable individuals to outperform inflation while simultaneously accumulating savings for their retirement.
The range of firms offered on U.S. exchanges exceeds that on Canadian exchanges alone. According to market capitalization, the NYSE and NASDAQ are the two biggest of the world’s stock exchanges. They also present some of the most lucrative opportunities. The United States has stock exchanges for several of the largest global growing businesses, including FAANG (Facebook, Amazon, Apple, Netflix, and Google).
Your assets become more diversified and your risk is reduced when you invest in several US stock exchanges, marketplaces, and sectors. In order to lower your portfolio’s overall risk, having a well-diversified portfolio entails owning a wide range of assets. You run the risk of suffering significant losses if you own shares in just a few businesses. Investments in several economic market sectors, asset types, and geographic locations comprise stock diversification. The goal is to reduce risk by balancing the positive and negative performance of various assets. Holding assets that are not strongly correlated or those that won’t move simultaneously in the same direction and at the same time is necessary for this to be effective.
Having US stocks is a very golden investment any person can make. However, many years ago, investing in US stocks was very difficult and complex, but technology and different methods have made purchasing stocks very simple. Canadians can buy American stocks in many ways:
Not all trading applications are accessible in Canada. In the meantime, you can still have access to US equities. Check which locations, nations, and exchanges are available, as well as the costs involved, before signing up for a new account or broker. In my opinion, the simplest approach to purchasing US equities in Canada is through online stock trading platforms. You may fund your account and begin trading US equities by selecting a platform that provides access to US markets.
Access to many investment possibilities. You have the freedom to benefit from investment possibilities that aren’t available in Canada by trading on US stock exchanges. The US is home to some of the most diversified and powerful corporations in the world, including Apple, Microsoft, Amazon, and Facebook. The second benefit of buying US stocks is increasing affordability. Brokerage costs are decreasing as a greater number of online share trading platforms vie for market share. Lastly, having a very diverse profile and a diverse portfolio reduces the total risk of the holdings. The overall impact of market volatility decreases since investments are made across a variety of asset classes and industries. Owning interests in a variety of funds guarantees that the dangers associated with a certain sector and company are minimal. Thus, it decreases risks and delivers larger profits in the long run.
An increasing number of Canadian online share trading services provide access to global stock markets. Some of the platforms are:
In this blog, we have uncovered how Canadians can easily purchase US stocks. Moreover, the cost and ease of investing in US equities from Canada are both favourable. The S&P500 index on Wall Street has generated annualized average returns of around 14.1% over the past ten years. The range of firms offered on U.S. exchanges exceeds that on Canadian exchanges alone. Having US stocks is a very golden investment any person can make. Many years ago, investing in US stocks was very difficult and complex, but technology and different methods have made purchasing stocks very uncomplicated. The US is home to some of the most diversified and powerful corporations in the world, including Apple, Microsoft, Amazon, and Facebook. An increasing number of Canadian online share trading services provide access to global stock markets. Check which locations, nations, and exchanges are available before signing up for a new account or broker. Goodluck. Now you know how to purchase US stocks easily while living in Canada.