Canada boasts vast natural resources and a booming mining industry, making it an attractive country for international investors. Of all of Canada’s different stock exchanges, the Toronto Stock Exchange (TSX) is the most popular and one of the largest stock exchanges in North America. The TSX features more mining and energy companies than any stock exchange in the world. Investors find securities in common stock, exchange-traded funds (ETFs), income trusts, split share corporations, and investment funds.

Understanding the Basics

There are two main approaches to participating in the stock market. The buy-and-hold approach is best for investors who are comfortable with a long-term approach. The buy-and-hold investor focuses on investing in quality stocks that will yield a dividend for the long haul, rather than focusing on daily price increases.

The short-term speculator is focused on daily fluctuations of stock prices. The goal of short-term speculation is to buy low and sell high for a quick profit. The buy and hold approach and short-term speculation are great examples of how stocks can serve as long-term or short-term investments.

A great way to test the waters of investing in Canadian stocks is to purchase penny stocks. Penny stocks have a share price of fewer than five dollars and typically trade at less than a dollar apiece. Penny stocks come from small companies in terms of market capitalization and have a low trade volume. These stocks are traded on the Toronto Stock Exchange (TSX), TSX Venture Exchange, Canadian Securities Exchange, and NEO Exchange.

First-time investors can benefit from a personal finance site like Wealth Rocket to learn the ins and outs of investing and what to expect when entering the Canadian Stock Market. Investors can find plenty of investment opportunities in Canadian natural resources as well as opportunities to invest in cannabis stocks and other Canadian companies. Wealth Rocket offers its picks of Canadian stocks to buy, which are speculative compared to Canadian dividend-paying stocks. The best Canadian stocks include 5N Plus, American Lithium Corp, Drone Delivery Canada, Exro Technologies, Numinus Wellness, Supreme Cannabis, and Ventripoint Diagnostics.

Do Your Due Diligence

Always review a company’s annual report before investing in any stock. When looking at cash flow, the company should generate plenty of cash. The debt number should either be lower than or equal to last year’s number. The last line of the earnings statement should be higher than the previous year, as should the equity number. Lastly, the sales number should be higher than the previous year.

Investing in a family-owned company with a decades-long track record of success and growth is a smart idea. A great example of a healthy company is Atlas Tool Works, a world-class precision manufacturing facility with a broad array of metal manufacturing services. The company is an active member of several industry-specific associations, boards, and committees. Atlas’s commitment to continued success is being led by Zach Mottl, who’s the fourth generation of his family to own and operate the business.

In his current role as Chief Alignment Officer (CAO), Zach engages in outreach, develops strategy, and finds operational improvements and alignment at Atlas and the family’s related businesses Accushim Inc. and Abet Industries. He advocates for the value and importance of domestic manufacturing in a healthy state or national economic model. Zach serves on the TMA Board of Directors, the Economic Development Committee of Burr Ridge, and was appointed by Illinois Governor Pat Quinn to the Taxpayer Action Board.

Investing Tips to Keep in Mind

Before investing in Canadian stocks, there are a few considerations to keep in mind. Investors purchase a stock or company share because the company is profitable. Purchasing a stock when the company isn’t profitable is speculating rather than investing. Not all stocks are a good investment, which is why an investor should never build an investment portfolio of all stocks. Stock prices are dependent on the health of the company, which is influenced by the customer base, industry, economy, and political climate.

A smart investor always has a logical answer to why they invest in certain stocks, and they always monitor their stocks regardless of investing approach.