The Canadian stock market offers investors a plethora of outstanding companies to choose from. In my opinion, constructing a portfolio composed solely of TSX-listed companies could do you well in the long run. However, focusing so much on one region could be catastrophic during market downturns. It could result in a lot of uneasy nights for investors who aren’t able to stomach a lot of volatility. With that said, it would be a good idea to diversify into other regions of the world.
For many Canadians, the answer to that would be investing in U.S. stocks. That’s because those companies are regulated by a different government and operate under a different (albeit sometimes connected) economy. However, one benefit to investing in U.S. stocks is that Canadians should be very familiar with many of the companies listed on American stock exchanges. That means Canadian investors could make informed decisions when looking for U.S. stocks to pick from.
One of the most popular investments for Canadians is SPDR S&P 500 ETF Trust (NYSEMKT: SPY). As its name suggests, this is an exchange-traded fund that tracks the performance of 500 large American-based companies. While I think the S&P 500 could serve you well over the long run, if you’re searching for greater gains, you’re better off investing in individual companies.
In this article, I’ll discuss two top U.S. picks for Canadian investors.
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This is one of my favourite U.S.-listed companies
Sea Limited (NYSE: SE) is the first stock that I think Canadian investors should consider buying today. This is a Singapore-based company that trades in the United States. For those who are unfamiliar, Sea Limited operates three distinct business segments. Those are Garena, Shopee, and SeaMoney, which represent its digital entertainment, ecommerce, and digital banking services, respectively.
Sea Limited stock has struggled to grow over the past two years after experiencing major gains prior to 2022. While that may cause some investors to be hesitant, I believe it’s important to focus on the underlying business in these situations. In that case, we can see that Sea Limited’s financials indicate major growth across all its verticals. For example, Garena, Shopee, and SeaMoney all posted revenue increases of 12%, 16%, and 37% year over year (for the third quarter). Because of that, I think this is a great opportunity for investors today.
A company you know very well
Visa (NYSE: V) is another U.S. stock that Canadians should be very familiar with. In 2022, it’s estimated that Visa covered 61% of all transactions (on a dollar basis) in the United States. That’s an incredible share of the credit card market and speaks volumes to its presence in the economy.
So far this year, Visa stock has managed to gain nearly 26%. That growth has allowed the stock to reach new all-time highs. It should be noted that the stock saw a very limited decline in value in 2022, when compared to other growth stocks in the United States. That may be a crucial detail that Canadian investors should keep in mind during the next market downturn.
