Yahoo Finance How Canadian Investors Can Benefit From U.S. Stocks
Written by Jed Lloren at The Motley Fool Canada
The Canadian stock market offers investors a plethora of outstanding companies. However, if you look at the Canadian economy, you may notice that it’s heavily focused on the financial and energy sectors. That means investors wouldn’t be able to build a well-diversified portfolio if they were to only invest in Canadian companies.
Fortunately, Canadians are able to access the U.S. stock market. This provides Canadians with the opportunity to take advantage of companies that could benefit their portfolios in different ways. For example, many of the world’s largest tech companies operate in the United States. This could give Canadians the opportunity to balance out their portfolios if they choose to add American tech stocks to their holdings.
The U.S. stock market also provides the opportunity for Canadians to add even more geographic diversification to their portfolios. This is because many international companies choose to list on the American stock exchanges because of the exposure they’re able to get. That means, Canadians could add companies from all over the world to their portfolio, with the hopes of adding stability should the Canadian economy ever encounter a prolonged period of economic uncertainty.
In this article, I’ll discuss two stocks that trade on the U.S. markets that I think Canadians should consider investing in today.
This is my favourite stock in the world
Sea Limited (NYSE:SE) is my favourite stock in the world. This company operates in three very interesting industries. Those are the e-sports, e-commerce, and digital banking industries. Of those business segments, Shopee, Sea Limited’s e-commerce business, is the most intriguing to me.
In its most recent earnings presentation, Sea Limited reported US$3 billion in revenue. Of that, US$2.1 billion in revenue was attributed to its ecommerce business. One thing that investors should note is that Sea Limited continues to work on its economics. Of the revenue its e-commerce business generated last quarter, only US$208 million ended up on the company’s bottom line. If Sea Limited can continue to become more profitable, then this company could be a monster in the stock market over the coming years.
Over the past five years, this stock has gained nearly 300%. I think it’ll still be a very long time before Sea Limited returns to its all-time highs, but I think it has a chance to get back there in the future.
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Consider one of the most well-known companies on Earth
If you’re ever considering American stocks to add to your portfolio, I think you’d be making a mistake not at least considering Microsoft (NASDAQ:MSFT). This is one of the most well-known companies in the world. It’s estimated that Microsoft holds a 62% share of the desktop operating system market, worldwide. To put that dominance into perspective, its closest competitor only holds a 19% share of that market.
Microsoft is one of the largest stocks in the world, with a valuation of US$2.5 trillion. However, despite that size, the stock continues to grow at a very impressive rate. Over the past five years, Microsoft stock has gained about 240%. It should be noted that from November 2021 to November 2022, this stock lost more than 35% of its value. However, it has since recovered all of those losses and seems poised to keep pushing its all-time high.
The post <strong>How Canadian Investors Can Benefit From U.S. Stocks</strong> appeared first on The Motley Fool Canada.
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Fool contributor Jed Lloren has positions in Microsoft and Sea Limited. The Motley Fool recommends Microsoft and Sea Limited. The Motley Fool has a disclosure policy.
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