About Canadian Stock
The Toronto Stock Exchange (TSX) sells stocks of Canadian and foreign companies that are well-established in their industries. The TSX Venture sells stocks of Canadian and foreign companies that are just starting up. The CNQ (Canadian Trading and Quotation System) sells stocks of junior companies that do not meet the requirements to trade on the TSX Venture.
-
Benefits
-
The TSX Venture and CNQ allow investors to buy stocks of start-up companies at a low price because of low demand for the stocks and then to sell the stocks at a higher price when the companies have expanded and more investors want to invest in these companies.
The TSX Venture allows investors to invest in companies that have been in business for years and that provide a steady income through dividends.
Disadvantages
-
The companies who trade their stocks on the TSX Venture and CNQ are junior start-up companies and could go out of business at any time, which means investors could lose the money they have invested in these companies.
The stocks on the TSX Venture, although providing a steady income, do not provide much of a potential for capital gains earnings as their prices remain relatively constant.
Taxation
-
To encourage Canadian investors to invest in Canadian companies, shareholders of Canadian companies can reduce their taxes through the dividend tax credit.
-
