Today's DateJuly 8, 2020

Best Investing Tools in Canada for 2020

2020 has started and many are making resolutions for the year. While some think about health and mariage, others are looking dive into investing. Investing has been a very steady source of income in the past and it still is for many. It provides an opportunity to increase one’s personal wealth through some smart investing techniques. In this article, we will outline some tools and platforms to start investing right now.

1. Research Tools

Any investor should do a deep research before diving into investing. Investing without prior research is a high risk. In terms of research, one should start by identifying the industry (i.e. IT). Researching on the industry is a very good indicator of the potential the stock would have. Some very good sites to start your research are:

These sites are an excellent source of latest news, expert recommendations and analysis of an industry and a specific company. In fact most banks get their data from either of these websites.

2. Investing Platforms in Canada

To actually invest in Canada, we are somewhat limited in terms of platforms. In the US, there are many platforms that allow commission-free trading and this is a great plus for any investor however in Canada, most investors trade via brokers or via their bank’s platform.

Wealthsimple

Wealthsimple, a Toronto-based company specialized in financial products, recently launched the first commission-free stock trading service in Canada. They are the first company that allows anyone to trade without any commission on their platform. We at FinanceHQ have tested their mobile app and it is amazing that a company has finally decided to go commission-free in Canada. Their trading mobile app is excellent however they are missing some stocks however at the moment of writing this article, they only support CDS-eligible securities. DTC securities like Disney are unfortunately not on the platform at this moment.

Institutional Trading Platform

Due to limitation in Canada, most people decide to invest via their banking platform. Almost all banking institution in Canada has an investing platform and you can start right away. Investing is very easily on these platforms and most of time provide many tools for you research as well. The only draw-back for these platforms is their commission. Most banks charge a fixed rate of $9.95 per transaction. This means each time you sell or buy a stock, you will be charge a fixed fee of $9.95. This amount does not really matter if you are investing thousands however if you want to test-drive the market, be careful as this amount could represent a huge chunk of your investment.

FinanceHQ Recommendation

If you want to invest on American stocks, we strongly recommend that you create a US savings account. You see, banking conversion rates are not the best. If you invest in let’s Apple Inc and you withdraw the profits to your CAD account, your bank will automatically convert USD to CAD using their own rate. This will put you at a disadvantage. We recommend moving the investment back to a USD account and then withdraw the money and convert it via private exchange as they have much better rates than banks.

3. Daily News Monitoring

Once you have invested on a stock, do not forget about it. Most people starting to invest think that if you put your money on a stock and leave it will bring you millions. This is very wrong. You need to actively monitor headlines, news, expert recommendations and foresee any changes to the industry as a bad news can crash the stock and will take years to recover. There are some tools you can use to be actively involved. There is the website StockTwits that consists of a large community of active investors. Think of it as the Twitter of stock market. Otherwise we recommend subscribing to newsletters from sites mentioned in part 1 above.

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