How to Invest in Canada

American investors invest in Canada to protect against a weakening U.S. dollar, gain access to Canada's economic growth or profit the country's vast natural resources. Follow these steps to invest in Canadian equities.

Instructions

1. Buy U.S. stocks with Canadian operations. Sears and Walmart have stores in Canada. The American car companies manufacture many of their cars there. Kellogg makes 30 different kinds of cereal across the northern border.

2. Purchase Canadian companies listed on American exchanges (NYSE or Nasdaq). Tech companies like Nortel and JDS Uniphase, large Canadian banks and numerous energy companies are listed on U.S. exchanges.

3. Invest in stocks listed on the Toronto Stock Exchange (TSX), one of the largest stock markets in the world. A full-service brokerage is necessary buy Canadian stocks directly. You can also buy Canadian stocks traded as American depository receipts (ADRs) on U.S. exchanges. ADRs don't have the same currency risk as Canadian stocks bought on TSX.

4. Take the easy way out and buy a mutual fund. Fidelity offers a Canada fund and iShares has an exchange traded fund of Canadian stocks, symbol EWC.

Tips & Warnings

• Research the fundamentals of any company before investing. Be sure the financial data supports a stocks current valuation and that there is growth potential.

• Investing across national borders increases the risk of regulatory interference, adds currency risk and has the potential to incur additional taxes.