How to Buy Stock on TSX

Decide how you wish to access and control your stock investments. Large financial institutions and banks (e.g. the Royal Bank of Canada and TDAmeritrade) offer stock accounts linked to the individual's general savings account. The bank then manages the investments for the individual and returns the profit in a manner similar to interest or a money market. The contrasting option is opening an investment-only accounts. This generally gives the individual investor more control over buying and selling decisions and is typically the best choice for first-time investors in the TSX.
Create an account with your financial institution (for linked investment accounts) or investment-only account. For the former, contact your banks customer service department to learn how to link an investment account with your current savings account. If you are choosing to buy stocks through an investment-only account, choose an online stock broker. Online stock brokers offer flexibility and discounted rates to individual investors that larger stock broker firms do not. Examples include ING Canada and Questrade Canada. Links to these institutions are included in the Resources section of this article.
Setup a payment plan for your investment account. If it is linked to your savings account, the Canadian bank will simply withdraw funds from your savings. If you have an ING Canada account or similar plan, you will be required to link the investment account to a credit card or bank account.
Research the TSX stocks in which you wish to invest. The TSX is known for featuring a large array of oil- and energy-focused companies, but general consumer and automobile companies are also listed on the TSX. Consult a financial adviser or solicit recommendations from a fellow investor on which stocks historically perform well.
Invest in TSX stocks and track your progress. Like all stock markets, the value of the TSX can fluctuate widely within the perimeters of a single, 24-hour day. Be vigilant and understand the inner mechanisms of a stock market by reading guidebooks and taking financial seminars. The more educated you become, the better your TSX stocks will perform.

How to Compare Stock Prices

Analyze a company's price-to-earnings ratio. The most traditional method of determining whether a stock is valued properly is to analyze this ratio of its price to the company's annual earnings per share. The P/E ratio is at the core of fundamental analysis.For example, if XYZ earned $8.50 per share last year and the stock is trading at $125 per share, the stock has a P/E ratio of approximately 15-to-1. In other words, the stock is trading at 15 times the annual earnings. Generally, the lower the P/E ratio, the better value the stock represents. Older blue chip companies typically trade at eight to 12 times earnings, while highflying technology companies can trade at 30 to 40 times earnings or more. A company can even be losing money and trade at a high price.
Compare a stock price to other companies in the same sector. It stands to reason that two or more publicly traded companies in the same business should be roughly similar in stock price, but this is rarely the case. By analyzing an entire business sector (airlines, banking, construction, etc.), you get a feel for which are the best performing stocks in that particular sector. Comparing the stock prices side by side often reveals which companies are best poised for growth in that sector. Google Finance offers excellent sector coverage.
Analyze the biggest winners and losers. Most stock-quoting systems will give you access to the biggest price and percentage movers of the day. Stocks that gained or lost the greatest dollar amount or percentage make for interesting analysis and potential investments. Stocks that lost much of their value one day might be due for a nice rebound the next. Likewise, by studying the stocks that gained a great deal in a given day, you may be able to identify other stocks poised to make a similar move.