Have you signed up for Wealthsimple Trade and are now wondering how to buy or trade stocks? The good news is that Wealthsimple Trade makes buying or trading stocks very straightforward.
Four steps to buying stocks on Wealthsimple Trade:
1. Find the stock that you would like to buy
2. Input your order
3. Review trade specifics and submit trade
4. Check the status of your order
I will cover these steps in more detail below and outline exactly how to buy stocks on Wealthsimple Trade.
Steps to Take before you can buy Stocks on Wealthsimple Trade
Before you are able to buy stocks on Wealthsimple Trade, you will need to make sure the following is successfully completed beforehand:
- You have opened an account with Wealthsimple Trade (use this link to get a $25 signup bonus)
- You have funded your account
- You have researched which stocks to buy or trade
- You are logged on to the platform
How to buy Stocks on Wealthsimple Trade
Step 1: Find the Stock that you would like to buy
With your research done and a good idea of which stocks you would like to buy, the first step is to search for each stock’s ticker in Wealthsimple Trade.
You can search for stocks by typing in their ticker at the top of the platform.
It is important not only to search for the correct ticker but also for the correct exchange. In a lot of cases, stocks are dual-listed in both Canada and the US. A good example is Enbridge stock:
- ENB – shares of the company that trade on the New York Stock Exchange, trading in US dollars
- ENB.TO – shares of the company that are trading on the Toronto Stock Exchange, in Canadian dollars
Once you have successfully found the stock that you would like to trade, you can review its historical performance over time.
Step 2: Input your Order
Whether you are using the online platform or mobile app, the next step is to input your trade order. You will have to select which account you will be placing your order from as well as the type of order that you would like to place.
There are several order types to consider before placing a trade, each with its advantages and disadvantages. I will cover the two most important types: limit orders and market orders.
Limit Orders – Usually the Best Order Type
Limit orders are the most important order types to understand as an investor or trader. Limit orders allow you to specify the exact price that you would like to buy or sell a security at.
One key benefit of limit orders is that you can set this price to be as high or as low as you would like. Limit orders can also remain open for long periods of time, allowing investors to wait until a security approaches the price that they have specified.
Limit orders will fill you at either the price that you have inputted or a better one. When buying a stock, this means buying shares at the inputted price or at a lower price. When selling a stock, this means selling shares at the inputted price or at a higher one.
Limit orders allow you to invest exact amounts of money into a security and are best for investors that are not in an extreme rush to buy a specific security.
Market Orders – Useful for Fast Trading
Market orders are generally not recommended except when trading the most liquid stocks or securities. A market order is executed immediately, meaning that you instantly become invested in the desired stock or security.
The main weakness of market orders is that you have no control over the price at which you get filled. In the case of illiquid stocks or securities (a wide bid-ask spread), it is likely you will end up buying or selling the security at an unfavourable price.
Market orders are generally only used when in an extreme rush to invest in a particular investment.
Wealthsimple Trade also allows investors to buy fractional shares, which can be selected from this menu. Fractional shares allow you to buy a portion of a company’s share if you are unable or unwilling to buy an entire share.
This is particularly helpful if you are looking to invest in companies that trade at very high share prices. I have put together a guide on Wealthsimple Trade fractional shares if you are looking for more information.
Once you have decided on the type of order that you would like to place and have inputted the trade specifics, it is time to confirm your trade.
Step 3: Review your Trade and Submit the Order
The next step is to review all of the information you have entered into Wealthsimple Trade’s platform to make sure that everything is correct.
You will want to double-check several things:
- The name of the stock
- The number of shares
- The desired price (if applicable)
- The account
- The estimated cost
This is the last chance to cancel your order before it is submitted (and potentially filled).
Step 4: Check the Status of your Order
Once the order has been submitted, it will be filled instantly if it is a market order (and markets are open). A limit order may or may not be filled instantly, depending on what price you have chosen relative to the current market price.
Keep in mind that limit orders may be partially filled in some situations.
If you have placed a limit order that is far from the current market price, it may remain open (and unfilled) for a long time. It is important to check your order status to monitor if it has been filled and at what price it has been filled (once it does).
Once you have reviewed the trade and it has settled, you have successfully bought a stock (or more) on Wealthsimple Trade.
Wealthsimple Fees
While Wealthsimple Trade does not charge trade commissions, there are certain fees involved with using the platform that you should be aware of.
A key fee to consider is the 1.5% currency conversion fee anytime that you are switching between Canadian and US dollars on Wealthsimple Trade.
If you do not have a Wealthsimple Trade Plus subscription (costing $10 per month plus applicable taxes), you will only be allowed to hold Canadian dollar-denominated accounts.
Without a Wealthsimple Trade Plus account, you will be charged 1.5% twice when trading US securities (when buying and selling). A Wealthsimple Trade Plus account unlocks US dollar-denominated accounts on Wealthsimple Trade.
Additional Wealthsimple Trade fees include:
- Paper account statement – $20
- Special requests and investigation – $75 per hour
- Voluntary corporate action/election – $50
- Wire transfer (both incoming and outgoing) – $30
- Broker-assisted phone trade – $45
- Certificate withdrawal – $250
Alternative to Buying Stocks Directly: Using a Robo-Advisor
An alternative to buying stocks directly is to get equity exposure through a Robo-advisor. A robo-advisor is software offered by brokerages that aim to replace human advisors. They collect key information from you through questionnaires and provide you with investment recommendations based on your answers.
Using a robo-advisor removes the need to research stocks and trade them yourself. On the other hand, robo-advisory platforms typically come with a fairly low management fee that is charged annually on assets. This fee is substantially lower than what would be charged by a human advisor.
Wealthsimple offers a robo-advisory platform called Wealthsimple Invest, which I provide a full review of.
You can also get $25 free by signing up for a Wealthsimple Invest account by using this link.
If you do not have time to research and trade your own stocks or investments, working with a robo-advisor is an excellent, low-cost alternative to taking care of your own investments.
Alternative to Buying Stocks Directly: Working with an Investment Advisor
Working with an investment advisor is another alternative to trading your own stocks. Investment advisors are able to offer professional insights into investment management and in some cases financial planning.
Since investment advisors vary greatly in terms of backgrounds and skill sets, some advisors may be more skilled (and be able to provide more value) than others. Be sure to do a lot of research into your advisor if you choose to work with one.
Since investment advisors typically charge very high advisory fees, I do not recommend working with one. The amount of investing, planning, and trading information that is available to the general public online can help to replicate a lot of what most investment advisors actually do.
Wealthsimple Trade Platform Review
It is important to know all of a specific discount brokerage’s features so that you are not unpleasantly surprised by anything further down the road.
I cover the platform in extensive detail in the above video, as well as in my comprehensive Wealthsimple Trade review.
Conclusion
If you are looking to buy stocks through Wealthsimple Trade, the good news is that it is extremely straightforward.
If you are not interested in continuously researching stocks to buy (or spending the time to actually trade them), alternatives are to use a Robo-advisor or to work with an investment advisor. I do not recommend working with an investment advisor because of the high advisory fees that are usually charged.
Make sure to check out my ultimate list of the best stocks in Canada if you are looking for great stock ideas to invest in.
