Investing in the stock market can seem scary, but it has lots of opportunities, especially in the US market, where some of the world's largest and most successful companies are based. If you're thinking of adding US stocks to your portfolio, here's what you need to know.
UNDERSTANDING THE US STOCK MARKET
The US stock market is made up of different exchanges. The two most important ones are the New York Stock Exchange (NYSE) and the NASDAQ. Companies from all kinds of sectors, including technology giants like Apple and Amazon, are listed on these exchanges. The US stock market is one of the world's most liquid and diverse markets. This means it attracts both domestic and international investors.
TYPES OF STOCKS
- Common stocks: The most common type of stock, offering voting rights and the potential for dividends.
- Preferred stocks: Stocks that don’t offer voting rights but provide fixed dividends.
- Blue-Chip stocks: Stable, reliable stocks from well-established companies like Coca-Cola and Johnson & Johnson.
- Growth stocks: High-risk, high-reward stocks from companies expected to grow rapidly.
- Dividend stocks: Stocks that pay out a portion of profits as dividends, providing a steady income stream.
BENEFITS OF INVESTING IN US STOCKS
- Diversification: The wide variety of companies in different sectors helps spread risk across your portfolio.
- Strong inistorical performance: The US stock market has historically delivered solid long-term returns.
- Global reach: Many US companies operate globally, giving you exposure to international markets.
- Liquidity: The market is highly liquid, making it easy to buy and sell stocks.
RISKS OF INVESTING IN US STOCKS
- Market volatility: Stock prices can fluctuate significantly in the short term due to economic or political events.
- Company-specific risks: A company's financial issues or management failures can affect stock prices.
- Economic factors: Macro factors like interest rates and inflation can impact stock performance.
HOW TO START INVESTING IN US STOCKS
If you want to start investing in US stocks, first you need to set clear financial goals, like saving for retirement or growing your wealth. Then, open a brokerage account with a platform that suits your needs, such as Unibank Invest. Once your account is set up, research and choose stocks, or consider ETFs for diversification. It's best to start with smaller amounts and invest regularly over time. Finally, it's important to regularly check that your investments are still in line with your long-term goals.
CONCLUSION
Investing in US stocks can be a great way to make money over time, but you have to be careful. It's not just about picking the right stocks, you also need to do your research, understand the risks and have a plan. It's also important to start with small investments and regularly add to your portfolio to deal with changes in the market. If you focus on your long-term financial goals rather than short-term market movements, you can make the most of the ups and downs of the US stock market and grow your wealth over time.
HOW TO INVEST?
Open a free brokerage account with Unibank Invest and start investing. The Unibank Invest app provides access to the world’s largest stock exchanges, enabling you to purchase international investment instruments, such as stocks, bonds, and ETFs.
To open a brokerage account, fill out the online application or call +374 43 004 382.
To open a brokerage account, fill out the online application or call +374 43 004 382.