I guess everyone knows what it means by, “Don’t put all your eggs in one basket!”
In addition, I know I mentioned that I would not invest in the American stock market because of the exchange rate. However, I realized I have geographical bias (thanks Swell Swede) and understand currency exchange rates are not that volatile. It is highly unlikely that $1 Canadian dollar can exchange for $1 American dollar anymore (remember 2011?). Therefore, it is totally reasonable to invest in American stocks as long as the currency rate stays between $0.75 to $0.85 American dollars for every $1 Canadian dollar.
Pursuing this further, you are also thinking of investing in other countries because the Canadian and American economies are pretty much closely related and you may not enjoy the diversification you look for. As a result, you are wondering where else you can dock your money into and let it grow passively.
Well! Other than crytocurrencies, maybe investing in the top ten largest stock markets in the world would be an option.
Here is the list of Top Ten Largest Stock Exchanges in the World By Market Capitalization (as of November 2017):
- New York Stock Exchange (NYSE) – Market cap: US $30 trillion
- NASDAQ – Market cap: US $12 trillion
- London Stock Exchange (LSE) – Market cap: US $5.8 trillion
- Tokyo Stock Exchange (TSE) – Market cap: US $5.5 trillion
- Shanghai Stock Exchange (SSE) – Market cap: US $5.05 trillion
- Euronext – Market cap: US $4.18 trillion
- Hong Kong Stock Exchange (HKeX) – Market cap: US $4.14 trillion
- Shenzhen Stock Exchange (SZSE) – Market cap: US $3.65 trillion
- Bombay Stock Exchange (BSE) – Market cap: US $2.22 trillion
- Toronto Stock Exchange (TSX) – Market cap: US $1.8 trillion
It seems like Toronto is doing pretty well, however TSX’s market cap has actually fallen from US $1.9 trillion in 2011 to U.S $1.8 trillion in 2017. This decline in market capitalization may mean companies listed on TSX are not as valuable as they were before.
So where can Canadian invest in the foreign market? You will find out in the next post!
Do you currently invest in any of the stock exchanges above? Do you find the fees and commissions expensive? Please leave you comment below! Catch you on the flip side!