How can Canadians invest in international stocks?

3 min read | January 10, 2022 06:14 PM AEDT | By Kajal Jain

How can Canadians invest in international stocks? — Image source: © 2021 Kalkine Media®

Open an international account

The first step here can be opening an international account, which will allow the online broker to manage foreign investments on your behalf.

However, brokerage fees are generally high when it comes to foreign investing. Plus, taxation differs from country to country. Thus, investors should carefully note the brokering charges and taxes to retain the earned profits.

Also read: How can Canadian investors smartly pick stocks?

Invest in ETFs

Investors can choose to invest in international exchange-traded funds (ETFs) focused on the best companies worldwide.

Following are some examples of international stocks:

Alphabet Inc (NASDAQ:GOOGL), a California-headquartered interactive media giant
Amazon.com Inc (NASDAQ:AMZN), a popular e-commerce company based in Seattle
Alibaba Group Holdings Limited (NYSE:BABA), a China-based online retailer
Walt Disney Company (NYSE:DIS), a world-famous media business with headquarters in California

How much should you put in such stocks?

Finance professionals generally advise investors to include a large proportion of domestic stocks relative to foreign stocks in their portfolios to protect their money from unforeseen and dynamic changes in the global market.

To be specific, international investing raging between 20 and 25 per cent of the total portfolio is considered ideal. However, investors should carefully take note of their risk appetite and decide based on proper fundamental analysis when indulging in foreign investment.

Should you invest in international stocks?

If you are well-versed with the Canadian market and ready to take the next step to further your investment journey, then international stocks can be a good option.

These stocks are known to have greater coverage than domestic stocks, which in turn can help in diversifying your portfolio risk better and capture significant gains from developing economies in the long term.

Also read: ETF vs Index Fund: Which is a better investment option?

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