I’ve never invested in stocks in the past, but I’m somewhat interested in exploring this area.
What is the minimum amount required to invest in stocks in Canada and how do you go about it? Do you have to contact a firm and have them buy and sell stocks for you, or can you do it on your own?
Re: Investing in stocks in Canada
MwaHahahaha. Looks like my knowledge of economics is being put to the test! Wait a minute while I gather my thoughts, (this will prove to be good revision for the mocks next month damnit)
Re: Investing in stocks in Canada
Ok so here's the deal. First of all you've gotta decide which type of share you want. Like a new share from a company or a share which is owned by an invester. Then you're most likely in the need of a Broker. This is the guy that acts like an Agent between you and the market-maker for his own comission. The market maker is the one who buys shares in bulk and then whole sales them.
If you are looking to invest in shares, then these are the steps you should follow:
1) Do some market research into what companies share you want to buy. Look at profit and loss accounts or take advice from people or ask someone at the stock exchange. You will need to identify a company who is expected to make a profit, and so their share value will rise over time, meaning if you buy the share now you sell later at a higher price for $$$ profit. This is called the Bull stance! Conversely, if you already have share and think that this company will perform badly you can sell the sahre and then buy it at a lower price later for $$$ profit. This is called Bear stance. Anyway, in your case when you are going to buy shares, you gotta identify company that you think will improve!
2) Contact a Broker and give him specific details on how many shares you wanna buy! Don't spend too much at first. Try an experiment before going full-tilt!
3)Broker will contact market-maker and get you your share and take a comission from you.
The reason you cant buy shares yourself is that market makers only deal with Brokers.
I dont know about minimum amount required but I dont think it has to be very high. It's moderately affordable and also depends on your target company. The shares system is designed to be accessible by the masses so there shouldnt be alot of restrictions.
Have fun investing (I want my commission for the information)
Re: Investing in stocks in Canada
Hey Sadiyah, check out this link. www.morningstar.com
Re: Investing in stocks in Canada
Oye Dani! Dont work me out of my commision duffer, lol :D
Re: Investing in stocks in Canada
What is the minimum amount required to invest in stocks in Canada and how do you go about it? Do you have to contact a firm and have them buy and sell stocks for you, or can you do it on your own?
Sadiyah
Go to a Bank of Montreal branch and sign up. In a few days they will send you information for an online investorline account. You should have around $2000 as a reasonable start-up amount. IF you are a complete novice, buy mutual funds since experts make the picks for you. A decent, safe mutual fund is a dividend fund.
Re: Investing in stocks in Canada
Thank you Pakap and DBD.
Malik, so the minimum would have to be around $2k?
Re: Investing in stocks in Canada
Malik, so the minimum would have to be around $2k?
Sadiya; when I started investing I used my RRSP money - I think at the time it was around 8K. Personally I think 2K is a decent amount since you will get charged stock exchange transaction fees that diminish gains (assuming you make gains) as you buy and sell stocks. At around 20-30 dollars per transaction, having a bulk sum of around 2K is decent. That said there is no minimum per se. You could theoretically trade a single share worth 10 dollars. Of course be advised that if you are below a certain total balance (I think with BMO its 15,000, you get charged a yearly fee for account maintenance though I dont remember the exact fee sum)
Re: Investing in stocks in Canada
Thanks for the practical outlook Malik_786, making notes
Re: Investing in stocks in Canada
arent there any discount brokerages operating in the canadian stock market? for a relatively small amount like 2k, banks would eat into any gains you'll make.
i'd recommend parking your money in an index fund, and track a few stocks you are interested in for a while until u feel comfy enough with the ways of the stock market to get your hands dirty.
OT: how's the canadian market doing?
Re: Investing in stocks in Canada
I was initially interested in Tim Horton's stocks and this sort of got me thinking that perhaps I could look into the stock market. However, since TH sells pork-related products, I'll stay away from it.
queer, could you shed some light on index fund(s)?
Also, is anyone aware of firms that won't be eating up money as much as the banks would?
Re: Investing in stocks in Canada
index funds are funds that hold a miniature replica of all the stocks in the market, or on one of the market indices. hence, your money will move along at the same ups and downs as the overall market/market index, and wont underperform it, which would be the case if your individual stock picks turn out to be mistakes. (you also lose out on the chance of doing better than the market with smart stock choices).
but given that you have reservations about owning stocks in some companies, index funds are probably not for u because by definition, if u own index funds, u own every company. there are some islamic mutual funds based in the US market that invest "halal only", dont know about canada.
Re: Investing in stocks in Canada
queer, thank you for the details.
I have no idea about the 'halaal only' index funds in Canada and I don't quite agree with the one in the US. Therefore, I'd rather do my own research than to rely on someone else.