You have some spare cash in your hands and cannot wait but to invest somewhere that can enrich you with profits. But wait.. where should you invest it?
There are definitely many diverse options you can choose from, as this financial jungle is full of different products waiting for your tap. But, among these US based stock market could be one of the wisest choices to look into.
Investing in US stocks is like joining a vibrant community of opportunities and innovation. Whether you’re new to the investment game or a seasoned player, US stocks – fueled with ever-increasing M2 money supply – have a lot to offer. Here’s a friendly guide to why putting your money in US stocks could be a smart move.
1. A Rock-Solid Economy
The US economy is like a well-oiled machine, known for its strength and resilience. US companies have consistently filled the world’s largest market cap companies list throughout the years. Here’s why that matters for your investments:
- Diverse Industries: From Silicon Valley tech wizards and Wall Street financiers to healthcare pioneers and consumer favorites, the US economy covers a lot of ground. This diversity helps you spread out your investments and reduce risk.
- Innovation Powerhouse: Think of all the big names like Apple, Google, and Tesla. These companies are not just industry leaders; they’re changing the world. Investing in US stocks means you’re part of this innovation wave.
2. Reach Beyond Borders
Investing in US stocks gives you a ticket to global markets, even if you never leave your home country.
- Global Footprint: Many US companies operate internationally, so you’re indirectly investing in global growth and trends. For example, US multinational companies like Intel, Mondolez, Coca-Cola, and Apple earn more than 60% of their total sales from overseas.
- Top Players: US firms are often the big fish in their sectors, offering stability and growth potential across the globe.
3. Safety Nets and Transparency
The US stock market is like a well-guarded fortress, thanks to its strong regulatory framework. Many U.S. companies, show a strong commitment to transparency in their global operations. This is reflected in their robust disclosure practices and proactive engagement with international regulations.
- Clear Rules: The US Securities and Exchange Commission (SEC) makes sure companies play by the rules, giving you peace of mind that you’re getting accurate information.
- Legal Protections: With a solid legal system in place, you have a safety net, making investing a bit less daunting.
4. Easy In, Easy Out
The US Stock market is also known for its high liquidity with over $362 billion worth of trading value each day – the highest on this planet.
It’s high fluidity is like having a VIP pass, making buying and selling stocks a breeze, not to mention that its cheaper.
- Smooth Trading: High trading volumes mean you can quickly buy or sell stocks without causing big price swings, giving you flexibility.
- Variety of Choices: Whether you’re into established companies or looking for the next big thing, the US market has something for everyone.
5. Strong Returns and Extra Income
US stocks have a track record of delivering solid returns of 9.5% annually over the past 200 years, making them attractive for those seeking growth and income. I mean.. statistically speaking, I personally think 200 years of data points are more than enough to deserve your interest. There have been many big and small wars, worldwide pandemics, devastating financial crisis, and numerous other black swan events, but the US stock market has been successfully making new all time highs eventually.
- Long-Term Growth: Historically, US stocks have shown steady growth as seen in the chart above, often outperforming other investment types. For example, $100 invested in the S&P 500 in 1990 would be worth about $2,300 today, whereas the same amount in an index of major global stocks excluding U.S. equities would be worth only about $510!
- Dividends Galore: Many US companies pay dividends, providing you with a nice income stream that you can reinvest to grow your wealth even more. While it may seem small in a short timeframe, it can be a significant driver in growing your overall asset value. In fact, including dividends in the total return of the S&P 500 has enhanced annual returns by approximately 2% points above the index’s price appreciation alone.
In a Nutshell
Investing in US stocks is a journey filled with promise and potential. You’re tapping into a powerful economy, gaining access to global markets, benefiting from strong protections, enjoying high liquidity, and reaping attractive returns and dividends.
So, whether you’re looking to diversify your portfolio, ride the wave of global growth, or enjoy steady income, US stocks offer a world of opportunities. Dive in with a thoughtful approach, and you could be well on your way to building a bright financial future.
