SPY - Canadian Investors: Don't Put All Your Eggs in the SPY Basket
2023-11-09 11:45:00 ET
As Canadian investors, we can take advantage of the many outstanding companies that trade domestically. However, it’s important that we diversify our portfolios . That way, if the Canadian economy were ever to take a major hit, then our portfolio would have a better chance to survive. The American stock market is the easiest place for Canadians to diversify. The biggest reason for this is because of the many American companies that Canadians should be familiar with.
When Canadians first enter the American stock market, they often choose to invest in SPDR S&P 500 ETF Trust ( NYSEMKT:SPY ). As the name of this exchange-traded fund suggests, it tracks the performance of the S&P 500. That’s an index that contains 500 large American companies. Although I believe the S&P 500 is a solid fund to hold in a portfolio, choosing only a couple of American stocks to invest in could yield better returns over the long run.
In this article, I’ll discuss two American stocks that Canadians should consider investing in today. I believe it would be better to choose these two stocks for the long run, rather than putting all your eggs in the SPY basket.
My favourite American-listed company
If I could only buy one NYSE-listed stock, it would be Sea Limited ( NYSE:SE ). Although this company is listed on the NYSE, it’s actually based in Singapore. That gives Canadian investors a unique kind of exposure. For those who aren’t familiar with this company, you should know that it operates three distinct business segments. This includes Garena, Shopee, and SeaMoney, which represent its entertainment, e-commerce, and digital banking services, respectively.
Over the past year, Sea Limited stock has not performed very well, only gaining about 9%. However, if we look at a longer time period, we can see that this stock has actually gained a lot of value over the past five years. Over that period, Sea Limited stock has gained more than 260%. Given that it operates in three very exciting industries, I think Sea Limited stock could continue to grow for a very long time.
One of the biggest companies in the world
With a market cap of US$2.7 trillion, Microsoft ( NASDAQ:MSFT ) is one of the largest companies in the world and likely needs very little introduction. If you have a job or attend school at any level, there’s a very good chance that you’ve used this company’s products. Whether it’s a Windows desktop or one of its Microsoft Office products, it’s very hard for the average person to live a life that doesn’t count on Microsoft in one way or another.
Since the start of the year, Microsoft stock has gained about 52%. That’s a tremendous gain for a company of its size. We’ve already seen one American company hit the US$3 trillion mark, and Microsoft could very well be the next one to do it. I think it’s reasonable to expect that to happen early next year. I also believe Microsoft still has a lot of room to grow.
The post Canadian Investors: Don’t Put All Your Eggs in the SPY Basket appeared first on The Motley Fool Canada .
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 .
2023