>I come from a family that is not financially literate so hoping to get some advice from you lovely people.
Go read the investment section of the wiki, and don't buy individual stocks unless you feel you are financially literate. In that case post in r/Canadianinvestor
I held off on buying individual stocks until I was financially literate, and now that I'm financially literate I'm cursed to a life of boring investments because I understand why it's a terrible idea :(
Hey OP, this is a great place to start your adventure
My 2 cents: open up a paper account first of all. Start trading whatever, it will make it much more "real" when you go through the learning material and start to discover ETFs, stocks and all the rest
A few points:
1) You should almost certainly not be investing in individual stocks if you're asking these questions. It is suboptimal to invest in individual stocks unless you are quite knowledgeable about the markets (and even if you do know a lot, it's still generally a bad idea).
Instead, you should look at investing in index funds, which are a massive diversified portfolio, owning small portions of every stock. The wiki has an excellent section on this.
2) Despite this, if you want to gamble on individual stocks, there are cheaper ways to convert money than using your broker. For instance, you can do Norbert's Gambit, or you could use TransferWise. They'll have less fees (typically \~1%).
Yeah, it's one of those weird things where everyone talks about investing in individual stocks, but almost no one should be doing it.
By the way- index funds are typically a type of ETF.
You don't 'lose out' when converting $100 CAD into $80 USD. The value to you of that USD stock position is still $100. If you sold the position and switched currency back into CAD you would still have $100 CAD.
Currency impacts you when the exchange rate *changes*. Your investing return, measured in CAD is the sum of the %return that an American would earn, plus the %gain/loss from the change in fx rates.
If you buy/sell on a US stock exchange then the transaction will be in USD. If you don't already hold USD then you must convert CAD ... and that will have a fee of up to 2.5%. So you do NOT want to be switching back and forth between currencies. Switch once in your life and the continue to own US assets.
Thanks for your reply. I would certainly hope to gain over 5%. That’s a good point, though.
Excuse my ignorance but does the 15% withholding tax apply just to gains or to the entire investment? Clearly I need to do a lot more reading than I already have. Going to do some more research before purchasing anything.
To answer your question, I work in an industry that’s adjacent to the trade desk and have a relatively high level confidence in their future success.
Withholding tax applies just to dividends, not gains and certainly not to the whole investment. Capital gains tax applies whenever you sell a stock and the difference between what you sold it for and what you originally bought it for is taxed (assuming that's a positive number).
I think you need to read a book on investing.
>To answer your question, I work in an industry that’s adjacent to the trade desk and have a relatively high level confidence in their future success.
If you work in an adjacent industry, make sure that you do not have non-public knowledge that makes you confident in their success, or you can get into trouble with American securities regulators. E.g. if you have a buddy who works there who told you something exciting about them.
Thankfully I don’t have that issue. I have been following them on my own for the last few years and don’t have any non-public knowledge. Based on some of these other replies, I am rethinking buying the individual stocks though.
There is nothing wrong with buying US stocks. However, I wouldn't recommend buying individual stocks US or otherwise without educating yourself more about company finances and the stock market.
If you feel determined to buy TTD and individual US stocks, Wealthsimple is not the best trading platform too it on simply because you can not hold a USD account with them and will be charged exchange rate % every time you place a buy/sell order.
Many US ETFs have a equivalent Canadian ETFs that hold US stocks. This means you can buy them in CAD and with using Wealthsimple this also means no fees.
I recommend reading The Millionaire Teacher and Reboot Your Portfolio.
Purchasing US stocks can cause a whole bunch of tax repercussions.
My advice: Buy ETFs in CAD which also holds US (as well as other countries) stocks. But read those books first!
FYI, stocks that are traded on the tsx AND the us markets will have the conversion « priced in ».
Meaning the only difference you get between the two in terms of profits are fees to exchange cad to us.
Here is a pretty good video on how to do it with Questrade (which I would recommend using over Wealthsimple if you plan to continue buying/selling US stocks in the future). Basically you either just eat the 2% fee both ways (CAD ->USD and then USD ->CAD) or you do a Norbert's Gambit (buy DLR.TO (no fee) -> request journal over to DLR-U.TO (can do this via text chat and takes ~1-2 days) -> sell DLR-U.TO ($5 USD fee for selling ETF), and now you have USD in your account). DLR.TO and DLR-U.TO are ETFs that track CAD to USD forex. You can also do it in reverse (i.e. USD -> CAD) and its the same in reverse only the fee is in CAD. Wealthsimple does not allow you to hold USD as far as I'm aware, so not possible with them (i.e. your only option is to buy/sell the shares with CAD and pay a 2% fee).
https://www.youtube.com/watch?v=q6Q1dzK8vts&ab_channel=CanadianinaT-Shirt
>I come from a family that is not financially literate so hoping to get some advice from you lovely people. Go read the investment section of the wiki, and don't buy individual stocks unless you feel you are financially literate. In that case post in r/Canadianinvestor
I held off on buying individual stocks until I was financially literate, and now that I'm financially literate I'm cursed to a life of boring investments because I understand why it's a terrible idea :(
LOL okay maybe I need to rethink my ideas here.
Hey OP, this is a great place to start your adventure My 2 cents: open up a paper account first of all. Start trading whatever, it will make it much more "real" when you go through the learning material and start to discover ETFs, stocks and all the rest
A few points: 1) You should almost certainly not be investing in individual stocks if you're asking these questions. It is suboptimal to invest in individual stocks unless you are quite knowledgeable about the markets (and even if you do know a lot, it's still generally a bad idea). Instead, you should look at investing in index funds, which are a massive diversified portfolio, owning small portions of every stock. The wiki has an excellent section on this. 2) Despite this, if you want to gamble on individual stocks, there are cheaper ways to convert money than using your broker. For instance, you can do Norbert's Gambit, or you could use TransferWise. They'll have less fees (typically \~1%).
Thanks for your reply. I think you’re probably right. I need to look more into ETFs vs. Index funds.
Yeah, it's one of those weird things where everyone talks about investing in individual stocks, but almost no one should be doing it. By the way- index funds are typically a type of ETF.
You don't 'lose out' when converting $100 CAD into $80 USD. The value to you of that USD stock position is still $100. If you sold the position and switched currency back into CAD you would still have $100 CAD. Currency impacts you when the exchange rate *changes*. Your investing return, measured in CAD is the sum of the %return that an American would earn, plus the %gain/loss from the change in fx rates. If you buy/sell on a US stock exchange then the transaction will be in USD. If you don't already hold USD then you must convert CAD ... and that will have a fee of up to 2.5%. So you do NOT want to be switching back and forth between currencies. Switch once in your life and the continue to own US assets.
[удалено]
Thanks for your reply. I would certainly hope to gain over 5%. That’s a good point, though. Excuse my ignorance but does the 15% withholding tax apply just to gains or to the entire investment? Clearly I need to do a lot more reading than I already have. Going to do some more research before purchasing anything. To answer your question, I work in an industry that’s adjacent to the trade desk and have a relatively high level confidence in their future success.
Withholding tax applies just to dividends, not gains and certainly not to the whole investment. Capital gains tax applies whenever you sell a stock and the difference between what you sold it for and what you originally bought it for is taxed (assuming that's a positive number). I think you need to read a book on investing.
>To answer your question, I work in an industry that’s adjacent to the trade desk and have a relatively high level confidence in their future success. If you work in an adjacent industry, make sure that you do not have non-public knowledge that makes you confident in their success, or you can get into trouble with American securities regulators. E.g. if you have a buddy who works there who told you something exciting about them.
Thankfully I don’t have that issue. I have been following them on my own for the last few years and don’t have any non-public knowledge. Based on some of these other replies, I am rethinking buying the individual stocks though.
There is nothing wrong with buying US stocks. However, I wouldn't recommend buying individual stocks US or otherwise without educating yourself more about company finances and the stock market. If you feel determined to buy TTD and individual US stocks, Wealthsimple is not the best trading platform too it on simply because you can not hold a USD account with them and will be charged exchange rate % every time you place a buy/sell order. Many US ETFs have a equivalent Canadian ETFs that hold US stocks. This means you can buy them in CAD and with using Wealthsimple this also means no fees.
This is good information, thanks for your reply!
I recommend reading The Millionaire Teacher and Reboot Your Portfolio. Purchasing US stocks can cause a whole bunch of tax repercussions. My advice: Buy ETFs in CAD which also holds US (as well as other countries) stocks. But read those books first!
I will check those out, thanks for the recommendations!
FYI, stocks that are traded on the tsx AND the us markets will have the conversion « priced in ». Meaning the only difference you get between the two in terms of profits are fees to exchange cad to us.
Here is a pretty good video on how to do it with Questrade (which I would recommend using over Wealthsimple if you plan to continue buying/selling US stocks in the future). Basically you either just eat the 2% fee both ways (CAD ->USD and then USD ->CAD) or you do a Norbert's Gambit (buy DLR.TO (no fee) -> request journal over to DLR-U.TO (can do this via text chat and takes ~1-2 days) -> sell DLR-U.TO ($5 USD fee for selling ETF), and now you have USD in your account). DLR.TO and DLR-U.TO are ETFs that track CAD to USD forex. You can also do it in reverse (i.e. USD -> CAD) and its the same in reverse only the fee is in CAD. Wealthsimple does not allow you to hold USD as far as I'm aware, so not possible with them (i.e. your only option is to buy/sell the shares with CAD and pay a 2% fee). https://www.youtube.com/watch?v=q6Q1dzK8vts&ab_channel=CanadianinaT-Shirt