How to Know Investing in Canada Makes Sense

Individuals looking to invest their assets should examine Canada’s financial markets very closely. Canada is very rich in natural resources, and the Canadian stock market is much less volatile than the American stock exchanges. This article will review some of the various investment opportunities that this market has to offer.

When people think of oil production, they usually think of the Middle East. Yet, Canada is a world-leading producer of oil and gas. There are several ways to invest in Canada’s Oil Gas Stocks. Trusts are an excellent investment vehicle to utilize in investing in oil and gas stocks. Investing through trusts is an attractive option because you have the opportunity to receive a monthly or quarterly income from the trust.

Should you be interested in earning tax breaks on your investment, :Flow Through Shares may be your answer. Flow through shares are shares of stock that oil and mineral production companies issue to their investors, allowing investors to share in the tax breaks of exploration. However, if the shares are sold, the investor will no longer be entitled to the tax break. Ask your stockbroker about flow through shares, and whether they may be a good option to add to your portfolio.

A Registered Retirement Savings Plan, or RRSP, is an account that is used to hold savings and investments in Canada. Established in 1957, this plan is intended to be employed as a retirement savings vehicle. However, it should be noted that there is an RRSP limit on the amount that can be contributed to the account in any given year. Basically, you may contribute no more than 18% of total income earned in the previous year for up to $2,000 total, not including any income earned from investments.

Another way to invest in Canada is through Bankers acceptances . These are short-term promissory notes that are issued by companies, but are guaranteed by a Canadian bank. This makes them highly desirable short-term investments, as they are extremely secure but also typically offer a higher rate of interest than treasury bills and money market securities.

Canada offers an extremely stable environment in which to invest. Oil and gas investments can be profitable, and any investor searching for tax breaks should investigate the flow through share option. The Registered Retirement Savings Plan is an excellent way for average Canadian to save for retirement, but investors need to be aware of contribution limits so that they do not set themselves up to face penalties. For short-term investments, investors may want to consider purchasing into bankers’ acceptances; because they are fully guaranteed by a Canadian bank, these acceptances provide an extremely secure investment vehicle while still providing above average returns to the investor. For these reasons, individuals should strongly consider Canada’s financial markets when selecting a place to invest their assets.

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This entry was posted on Friday, July 8th, 2011 at 2:26 pm and is filed under Banking/Finance, General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.