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 how invest in the TSX, and learn more about how to buy a TSX stock online.
How to invest in the TSX
You can follow the steps below to set up an account and buy TSX stocks:
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 several brokers to find the cheapest option before you decide on a service.
Open a stock-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. This will require you to supply personal information such as your full name, address, email and phone number.
Deposit funds. When your account is up and running, you’ll have to deposit funds to start trading. Depending on the platform you use, you may need to link your bank account to your trading account to initiate a transfer. Some platforms may allow you to pay with a credit card, debit card or online bank transfer.
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.
Pay the required fees. Many brokers charge commissions every time you make a trade on the TSX. This commission will be deducted from your account balance as soon as you execute a trade. You may also have to pay an account maintenance fee quarterly or annually to keep your account active.
How to buy TSX stocks
The following stock trading platforms provide access to the Toronto Stock Exchange as well as US stock exchanges.
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What is the TSX?
The Toronto Stock Exchange (TSX) is a stock exchange based in Toronto, Ontario. It’s Canada’s largest stock exchange, and the 9th 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.
What is the TSX Venture Exchange?
The TSX Venture exchange (TSXV) is for smaller, emerging companies with market-caps too small to be listed on the TSX. Many resource exploration and high-tech companies are listed on the exchange.
How much does it cost to buy TSX Stocks?
The amount you’ll pay to buy a TSX stock 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.
Trading commission fees
Some of the most popular brokers in the US 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.
Note that most trading pltforms waive account fees if you keep a minimum balance in your account, though the amount varies between platforms. Read our reviews to learn more.
Popular TSX stocks to buy
One good way of finding the most popular stocks on the TSX is by looking at the S&P/TSX 60 Index, which lists 60 of the largest companies on the exchange by market capitalization. Some of the stocks listed in the index include:
*Year-to-date (YTD) stock data was collected on July 20, 2022.
Other investment options on the Toronto Stock Exchange
There are a number of other investment products available on the TSX besides equities:
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 to buy
You can earn money on the cumulative average value of a number of TSX stocks when you invest in ETFs. Some popular ETFs that trade on the TSX include:
Ishares S&P TSX 60 Index (XIU)
Ishares S&P TSX Global Gold Index (XGD)
Ishares S&P TSX Capped Financials (XFN)
Ishares Core S&P TSX Capped Comp (XIC)
Ishares S&P TSX Capped Energy Index (XEG)
BMO S&P TSX Equal Weight Banks Index (ZEB)
Why should I invest in TSX Stocks?
The Toronto Stock Exchange is the largest stock exchange in Canada and features stocks from several major Canadian companies. It even 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. The TSX may be a good fit for you if you want to invest in banks, oil and gas companies or large Canadian corporations with at at least $7.5 million in net tangible assets. To invest in smaller Canadian companies, you’ll need to explore the TSX Venture Exchange (also known as the TSX-V). Investing in a basket of stocks (an ETF) is generally less volatile than investing in just 1 single stock. The graph below shows a good example of this using the BMO Equal Weight Banks Index ETF–a collection of equally-weighted Canadian bank stocks including TD and CIBC in addition to 4 others. Comparing the return on investment between the ETF and some individual stocks over the past 11 years, you can see that TD outperforms the ETF while CIBC underperforms compared to it. That’s why investing in a basket of stocks is often less risky than riding the ups and downs of individual stocks.
Is now a good time to buy TSX stocks?
While it’s impossible to predict what will happen in the future, you may want to consider investing in strong stocks that are likely to withstand any future market fluctuations, like blue chip stocks. To find these stocks, you’ll need to do some research and be aware of what’s going on in particular sectors. You can also make better decisions by tracking the historical trends of stocks and forecasting which companies have fared well throughout the pandemic, as well as which stocks could be on the verge of making a comeback.
Bottom line
The TSX lists stocks from over 1,500 Canadian companies, making it Canada’s largest stock exchange. To buy and sell TSX stocks, you need a brokerage that provides access to Canadian stock exchanges. Stock trading: The rewards, risks and how to start
Frequently asked questions about the TSX
You can buy TSX stocks online by signing up for an online brokerage account such as Interactive Brokers or Fidelity Investments. These accounts will let you invest in TSX stocks using your desktop or mobile phone.
Some US-based companies may list stocks on the TSX, although most list on US exchanges like the NYSE and Nasdaq.
The best way to invest in the TSX is to sign up for an online brokerage account or robo-advisor that provides access to international investments. You can also invest in TSX stocks using a financial planner, though this often comes with higher management fees than if you manage your own investments.
Claire Horwood is a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee.
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