If you are considering investing outside the US and are looking for a stable, growing economy, Canada may be able to provide you with the options you are looking for. Canada’s economy is supported by business-friendly policies, as well as research and development.
Canada is home to some of the biggest names in business and excels in many sectors. This country has also focused its university support, business incentives, and policies around critical industries in order to attract the best companies, and afford them the opportunity to grow.
There are clear advantages to investing in Canada, as Canada is one of the world’s most competitive investment locations, drawing from a pool of highly educated workers and excelling in key industries.
The federal debt in Canada is actually lower than a decade ago, and the percentage of debt-to-GDP is the best in the developed world. Canada is being heralded as the new Switzerland, and could be the best financially-managed country among developed nations
Several of Canada’s banks were ranked the safest in the world, and none of the financial institutions asked for, or needed, a government bailout.
Diversification To Reduce Risk
Diversifying globally is an excellent hedge against economic downturns. Canada provides an easy option for global exposure.
Canada boasts an economy that is backed by gold, oil and other popular natural resources. The Canadian government also more tightly regulates Canada’s banking system, resulting in fewer sub-prime mortgages and a stronger housing market.
In addition to being better off monetarily and fiscally than the United States economy, Canada’s economy has a resources sector that is relatively larger than the US. This proves to be a huge advantage when commodity and energy prices are pushed higher by demand from Asia.
How To Invest In Canada: Getting Started
If you are looking to diversify and branch out into Canadian stocks, there are several ways to go about it. There are Canadian securities to fit your investment objectives, and risk tolerance.
You can gain exposure to Canadian stocks by purchasing shares in American stocks with operations in Canada. Many US car companies manufacture several cars in Canada, and other US goods such a cereal are made in Canada.
You can also buy Canadian corporations that are listed on US exchanges such as the S&P500 or the NASDAQ. There are many energy companies, large Canadian banks, as well a tech companies that are listed on American exchanges.
The Toronto Stock Exchange is one of the biggest stock markets in the world, and stocks listed on its exchange are available to investors through full-service brokerages.
There are also Canadian stocks that are traded as ADRs (American depository receipts). Stocks bought on the Toronto Stock Exchange carry a greater downside risk than American depository receipts.
You can chose to keep it simple and invest in a mutual fund or a Canadian ETF. iShares offers an ETF of Canadian stocks (EWC) and Fidelity offers a Canada fund.