How to Invest in the TSX in March 2021 | Finder Canada

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How to invest in the TSX

Find out how you can make trades quickly and easily with Canada’s largest stock exchange.

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Investing

Looking to invest in the TSX? The Toronto Stock Exchange (TSX) is a major global stock market based in Canada. It deals primarily with energy and financial companies, such as Canada’s largest banks and a number of oil and gas companies. Find out what makes the TSX unique, and learn more about how you can use this stock exchange to make trades.

What is the TSX?

The Toronto Stock Exchange (colloquially known as the TSX) is a stock exchange based in Toronto, Ontario. It’s Canada’s largest stock exchange, and the ninth largest exchange in the world by market capitalization. There are over 1,500 companies listed on the TSX, including a high proportion of those specializing in the financial and extractions industries.

You can use the TSX to trade shares in companies, investment trusts and exchange-traded funds (ETFs). As a more advanced trader, you can also use it to dabble in bonds, commodities, futures, options and other derivative products. Just be aware that any trades you make on the TSX will be carried out using the Canadian dollar.

Who is the TSX best for?

The TSX may be a good fit for you if you want to invest in the Canadian market and want to make trades using the Canadian dollar. It’s a good fit for investors with a major interest in the Canadian and global financial industry as well as in oil and gas. It may not be a good fit for investors looking to make their money in industries like tech or healthcare.

It’s also important to note that companies listed on the TSX must have more than $7.5 million in net tangible assets. To invest in smaller Canadian companies, you’ll need to head over to the TSX Venture Exchange (also known as the TSX-V).

How to invest in the TSX

Choose a broker or trading platform. You’ll need to choose a broker or trading platform that gives you access to the TSX or at least lets you buy and sell the TSX stocks that you’re interested in. You should also try to compare at least three to four brokers to find the cheapest option before you decide on a service.

Open a share-trading account. Once you’ve landed on the right broker or platform, you’ll have to open a trading account with them. This can usually be done by filling out a quick online application with the provider you’ve settled on.

Deposit funds. When your account is up and running, you’ll have to load funds into your “wallet” to start trading. Some platforms require you to have a minimum balance of $1,000 to get started and you may also be required to pay a quarterly account fee.

Buy stocks on the TSX. Once your money is loaded into your account, you’ll be ready to start trading. You can buy and sell stocks as well as a number of other financial products (such as bonds, exchange-traded funds and derivatives) on the TSX. This will cost you different amounts, based on which broker or platform you use.

Compare stock trading platforms

Name Product Available asset types Stock Fee Option Fee Account Fee ETF Transaction Cost Feature Table description
Wealthsimple Trade
Stocks, ETFs
$0
N/A
$0
Free
Zero commissions on Canadian stocks.
Get a $25 bonus when you open a Wealthsimple Trade account and deposit and trade at least $100.
Interactive Brokers
Stocks, Bonds, Options, ETFs, Currencies, Futures
Min. $1.00, Max. 0.5% of trade value
$1.50 min. per order
$0 (if monthly commissions are greater than or equal to US$10.00)
Min. $1.00, Max. 0.5% of trade value
Extensive trading capabilities and global investment tracking.
Access market data 24 hours a day, six days a week and invest in global stocks, options, futures, currencies, bonds and funds from one single account.
Qtrade Investor
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs
$6.95 - $8.75
$6.95 - $8.75 + $1.25 per contract
$0 if conditions met, else $25/quarter
$0 - $8.75
Trade 100 ETFs free of charge.
Qtrade Investor offers low trading commissions and an easy-to-use platform with access to powerful tools and a wide selection of investment options. Trade 100 ETFs free of charge and thousands more for $8.75 or lower.
Questrade
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, Precious Metals
$4.95-$9.95
$9.95 + $1 per contract
$0
Free
$0 account fee and free ETF transactions.
Opt for self-directed investing and save on fees or get a pre-built portfolio and take some of the guesswork out.
Scotia iTRADE
Options, Mutual Funds, ETFs, GICs, International Equities
$4.99-$9.99
$9.99 + $1.25 contract ($4.99 + $1.25 contract if completed 150 trades or more a quarter)
$0
$9.99 ($4.99 if completed 150 trades or more a quarter)
Pay no annual account fees.
Buy, sell and trade ETFs, Equities, Options and more with competitive commissions.
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Compare up to 4 providers

How much does it cost to invest in the TSX?

The amount you’ll pay to buy TSX stocks will depend on which broker or trading platform you use to make your trades. Each one will have its own fee structure for executing trades (in addition to an account fee, in some cases). These extra charges can have a big influence on the cost of investing.

You can read about our picks for best stock trading platforms here.

Broker trading fees

Some of the most popular brokers in Canada to buy TSX stocks are listed below, along with a price breakdown for making trades on Canadian stocks. The one you choose will be based on your unique preferences and budget.

Broker

Stocks (price per trade)

ETFs (price per trade)

Account fee

TD Direct Investing

Between $7 and $9.99

Between $7 and $9.99

$25 per quarter

RBC Direct Investing

$6.95 to $9.95

$6.95 to $9.95

$25 per quarter

CIBC Investor’s Edge

Between $4.95 and $6.95 (or $5.95 for students)

Between $4.95 and $6.95 (or $5.95 for students)

$25 per quarter

BMO InvestorLine

$9.95

$9.95

$25 per quarter

Scotia iTRADE

Between $4.99 and $9.99

Between $4.99 and $9.99 (but free to buy)

Free (but inactivity fee)

Qtrade

Between $6.95 and $8.75

Between $6.95 and $8.75 (or pick from 100 free ETFs)

$25 per quarter

Virtual Brokers

Between $1.99 and $7.99

Between $1.99 and $7.99 (but free to buy)

$25 per quarter

Questrade

Between $4.95 and $9.95

Between $4.95 and $9.95 (but free to buy)

Free

Wealthsimple Trade

Free

Free

Free

*Account fees for most brokers are waived if you keep a minimum of $15,000 in your account.

Other ways to invest in the TSX

For most investors, stock exchanges are designed for trading equities over all other types of investments. Equities let you purchase shares in a particular company and may allow you to collect a portion of revenue (also known as dividends) when that company performs well. That said, there are a number of other investment products available on the TSX.

Other investment options on the TSX

If you want to invest in the TSX without having to buy stocks directly, you can take advantage of the following options:

  • Index funds. These track the performance of a “basket” of stocks on the TSX, and let you earn money on the average gains of all the shares put together.
  • Exchange traded funds. ETFs are similar to mutual funds, except they can be traded on the stock exchange and typically come with much lower trading fees.
  • Options. Options are a type of contract that let you speculate and bid on how an asset is going to perform on the stock market.
  • Bonds. Bonds allow you to lend money to governments or corporations so that you can collect a set rate of interest on your loan.
  • New issues. New issues give you the change to invest in a company going public for the first time so that you can get in on the ground floor before share prices go up.

Popular TSX ETFs

You can earn money on the cumulative average value of a number of TSX stocks when you invest in several of Canada’s most popular ETFs. These include the following:

  • Ishares S&P TSX 60 Index (XIU-T)
  • Ishares S&P TSX Global Gold Index (XGD-T)
  • Ishares S&P TSX Capped Financials (XFN-T)
  • Ishares Core S&P TSX Capped Comp (XIC-T)
  • Ishares S&P TSX Capped Energy Index (XEG-T)
  • BMO S&P TSX Equal Weight Banks Index (ZEB-T)

Why should I invest in the TSX?

The Toronto Stock Exchange is the largest stock exchange in Canada and features stocks from several major Canadian companies. It offers access to certain stocks and securities that aren’t listed in other markets. In particular, it attracts some of the world’s largest natural resources companies, which makes it popular with international investors.

It’s easy to find some of the most popular stocks being traded on the TSX by looking at the S&P/TSX 60 Index. This lists out 60 of the largest companies on the exchange by market capitalization. You might also like to invest in this index to earn a net profit based on the average price movements of these 60 stocks.

Is now a good time to buy TSX stocks?

Many stocks on the TSX have suffered significant drops as a result of the coronavirus pandemic. Historically, stock market crashes have been a good time to buy shares as markets generally recover over time. Many investors will see the current share prices of many of the stocks on the TSX as a good entry point and will invest accordingly.

However, it’s important to keep an eye on the news and be aware of what’s going on in particular sectors. For example, the price of oil reached record lows in late April, which has caused oil markets to become extremely volatile. As a result, investing in this sector (which makes up a large portion of TSX stocks) is more risky than usual. For more on oil, read our Invest in Oil guide here.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involve substantial risk of loss. This means they are not appropriate for all investors. Past performance is not an indication of future results so you should make sure to consider your own circumstances and obtain your own financial advice before making any trades.

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