Why the US remains the most coveted market

11 December 2018  |  EDUCATION

The US provides a lucrative selection of opportunities for overseas stock trading. It’s often described as the world’s greatest superpower or the land of the free. In economic terms, it remains a steady option. In theory, investing in the US is like investing in an entire continent, because each of the 50 states is administered independently. So in a sense, buying a variety of US stocks can help to build a diverse portfolio in one easy step.

That said, the bulk of US revenues come from non-American markets. They’re multinationals, so up to 43% of their profits are earned in foreign lands, according to stats in 2016. Also, a good number of companies listed in  US exchanges are global. This means both in the literal and metaphorical sense, adding US shares to your portfolio offers instant diversification benefits. In these discussions, US investment is often pitted against China.

The largest market in the world

Still, even in this comparison, the American stocks come out on top. If you’re interested in daily trade (as opposed to long-term purchases), the US market is twice as liquid as China, with US$40 trillion in trades last year. If you’re measuring by market cap, the US still wins at US$32.3 trillion compared to China’s US$6.9 trillion as at April 2018. And yet for all this value, you don’t need a lot to get started. At Monex, you can start  US trading with brokerage fees as low as $9.99.

The US market is significant, not just in cash volumes but also by investment options. It has a larger number of listed companies than any other market, so there’s a lot more to explore.

Home of the FANGs

Facebook, Amazon, Netflix, and Google (FANGs) have been considered excellent companies to invest in the past. So, if you want part ownership in these firms – for five minutes or five decades – it makes sense to invest in their country of origin. There are tons of other tech options.

Another critical benefit is access to more than 1,400 EFTs (Exchange Traded Funds) and ADRs (American Depositary Receipts). These options aren’t available in other markets, but through online trading, you can boost your portfolio with a quick click. The US share trading regulations are more stringent than many other markets, so it’s a safer, smarter choice. Plus, you can diversify by investing both in the US and China. Take advantage of both sides of the  current East-West trading tensions between Presidents Trump and Xi.

For more information on lucrative markets, or to  open your trading account, become a client today.

Read Also:

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History May Favor Bulls This Quarter, Despite Volatility

U.S. Earnings Analysis in November – Projections & Insights

Risk Disclaimer: The information above is of general nature only and does not take into account your objectives, financial situation or investment needs. Prior to you make an investment decision, please make sure you carefully read and fully understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other relevant documents that you can obtain from this website. Monex Securities Australia Pty Ltd (AFSL No. 363972; ABN 84 142 210 179) is the Financial services provider. Financial products trading carries risks and may not be suitable for all investors. You are strongly recommended to seek independent financial advice before making any investment decisions.


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