Investing in the US Stock Market

US Market Profile - A Land of Opportunity

With the largest economy and stock exchanges in the world, the United States offers what many international investors are looking for:

  • Access to the world's most capitalised stock market
  • A very liquid stock market
  • Diverse investment opportunities

The United States remains the most important market in the world for investors. Its lucrative business climate, including regulation and taxation rules, makes it very attractive to foreign investors. No other international financial market comes close to the size, accessibility, transparency and liquidity of U.S. stock markets.

US markets are better capitalized

The U.S. stock markets represent the biggest single concentration of wealth in history. In terms of market capitalization, no other financial market comes close to the combined U.S. stock markets. As of March 2020, the market capitalization of the NYSE was valued at US25.53 trillions.

Country Stock Exchange Market Capitalization (USD Trillions)
United States NYSE 25.53
United States NASDAQ 11.23
Japan Japan Exchange Group 5.1
China Shanghai Stock Exchange 4.67
China Hong Kong Stock Exchange 4.23
Europe Euronext 3.67
China Shenzhen Stock Exchange 3.28
United Kingdom London Stock Exchange 2.92
Canada Toronto Stock Exchange 1.75
India BSE India 1.51

U.S. Stock Markets are More Liquid

Just looking at the NYSE alone, the trade value was 2 times that of Shenzhen, 3 times that of Tokyo, and almost 7 times that of London. U.S. markets are still the biggest in terms of turnover as well as value. That means there's a very high chance of finding a buyer or seller of any particular stock at any given time.

Country Stock Exchange Monthly Trade Value (USD Billions)
United States NYSE 1,452
United States NASDAQ 1,262
China Shenzhen Stock Exchange 763
China Shanghai Stock Exchange 536
Japan Tokyo Stock Exchange 481
South Korea Korea Exchange 277
United Kingdom London Stock Exchange 219
India Bombay Stock Exchange 210

U.S. Stock Markets Offer Greater Diversification

U.S. markets offer access to a huge variety of U.S. companies seeking to raise capital. With almost 6,000 companies to select from, you can invest in major companies and brands from all over the world who list their shares on U.S. financial markets.

Country Stock Exchange Number of Companies
United States NASDAQ + NYSE 5,700
China Shanghai + Shenzhen + Hong Kong 5,500
Japan Tokyo 3,600
United Kingdom London 2,600

Source: Wikipedia, Investopedia

US Stock Market Investing Tips

Be updated with the current market forecasts to determine the strong and weak times to invest in the US stock market. Being on top of the current US stock market trends will give you better chances of buying and selling at the best times, thus eliminating guesswork and churn rate. You'll have peace of mind investing in the right companies to get the most of your money.

Check out these other US stock market investing tips:

  • Remember that investing involves buying a company's stock share, which makes you a part-owner. Pick the company instead of thinking of the "stock". Know the company's performance, competitors, and long-term prospects.
  • Write down the essential things that make every stock worthy of your money. Set a clear basis on what things you find attractive about a company, and opportunities you perceive for the future. Also, set your expectations, as well as the metrics that matter most.
  • Avoid unpleasant results by "buying in thirds", which is similar to dollar-cost averaging. Divide the amount you're planning to invest by three. Choose three separate points when buying shares, such as at regular intervals (like monthly or quarterly) or depending on company events or performance. For instance, you might want to buy shares before a new product launch and then place the next third of your investment into play if it becomes a hit. If not, you can divert the remaining amount elsewhere.
  • If there are a lot of choices and you can't decide what companies to invest on, you can buy "the basket"" to be a long-term winner. Buying a basket of stocks will eliminate the pressure of choosing "the one". The gains can be used from the winner to offset any potential losses. It's a great strategy to help you identify the best company to invest and double down your position if desired.
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