Warning! Watch Out for Foreign Stocks!

I was pleased with my recent investment in Canadian companies trading on the NYSE, they seemed like good dividend plays, maybe not long term holds, but solid for a year or two, with careful watching.

The past couple months I picked up Student Transportation (STB) Just Energy (JE) and Atlantic Power (AT) sure their dividends seem a little higher than a slow prudent investor would pick, but hey I’m young and don’t mind a little risk.

When I received my dividends in my account, I noticed a deduction for foreign tax of 15% of the dividend, hmmm, not really thrilled about that. I guess that’s what I get for my lack of research, boo.

If you learn anything from my site, it’s that you need to do your own research, learn from my mistakes. I need to do more research and careful analysis of stocks instead of just reading a couple positive articles on SeekingAlpha and throwing in my money. This is why investing can seem like gambling, honestly the money sometimes doesn’t even seem real. I feel a pinch more when I go on a shopping spree and blow a few hundred dollars (please don’t judge me, I haven’t done that in at least two years) than when I put the money in the market and watch my investment drop 1-2%, and I lose a few hundred dollars in the market. I guess I am a natural optimist and think, it’s going to come back up, I just have to be patient. But have I been prudent? Is it realistic to think that the investment will come back up, when I haven’t done enough in depth research to merit this hope? I guess I’m just thinking out loud and throwing these questions out into the internet to see if anyone can relate to my thoughts. Also PLEASE do your own research, as it is painfully obvious that I am not an investment professional.

However, to be a little positive, since I started investing, I have only lost money on one stock Deutsche Telekom (DT) in 2010, and it was just a couple hundred dollars, nothing too crazy.

So far this has been a stellar quarter of Dividend Income and overall Portfolio Performance for me, and I can’t wait until the end of the month to give an update. Stay tuned!

4 responses to “Warning! Watch Out for Foreign Stocks!

  1. Some lessons we learn the hard way eh? I only own one foreign stock, but I knew going in that I would have a 19% foreign tax being taken out. I think as new investors we are bound to make a few mistakes along the way. Just chalk it up to the cost of earning your education.

    • It would’ve been nicer to know going in, but it doesn’t bother me enough to sell. I agree it does reinforce the fact that I have a lot to learn. Thanks for the encouragement.

  2. Keep in mind that you can reclaim foreign dividend taxes if you hold your positions in a taxable account. I hold TOT, a french energy major, and I get all my French withholding back at tax time.

    Best wishes!

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