It’s no secret that the United States is the home to major companies and businesses that have become part of the fabric of countries across the globe. Companies like Apple, McDonald’s, and Disney have strong presences whether you’re in France or India. These are household names wherever you go. The Motley Fool stock advisor track record for many U.S. stocks is high, with many of these stocks producing capital for investors, diversifying their portfolios, and more.
If you’re domestic to the U.S., it’s easier to invest in these stocks. In some foreign countries, investing in U.S. stocks can be a little more tricky, which is why we recommend working with a stock advisor or professional broker.
But what does a stock advisor do? They provide individually tailored investment advice and many can even manage your investment portfolio, taking the challenge of investing off your back. A certified broker can safely and securely invest your money and offer you expert counsel when it comes to your portfolio.
Once you get started with a way to invest, it’s time to reap the rewards. Below, we’ll detail the advantages of investing in the U.S. stock exchange.
The Top Benefits of U.S. Stock Investing
There are truly too many benefits to fit on this list, but we’ve highlighted the top advantages to investing in the U.S. stock market.
Purchase Fractions of U.S. Stocks
Much like the benefits of investing in penny stocks, U.S. stocks allow you to purchase fractions of stock through stock tokens. This can be a more inexpensive way to invest, the same way investing in penny stocks is.
This benefit primarily applies to investors outside of the U.S., as many markets outside of the U.S. require you to have a minimum of one quantity when looking to invest in a particular stock. By using stock tokens, you can buy for the value rather than the amount. There will likely still be a minimum investment criteria or amount to purchase the fraction, but it’s much more cost-effective than the entire cost of a share for a stock like Google. You can invest in any U.S. stock with stock tokens.
Diversity
By investing in U.S. stocks (if you are a foreign investor), you can diversify your portfolio on a truly global level. The U.S. market is one of the most diverse in the world, with the top two sectors (financial and technology industries) only making up approximately 34% of the overall market cap.
The companies traded in the U.S. market are from all over the world. Take a look at the NASDAQ and S&P 500. Companies across the globe are listed in their exchanges, including companies from Canada, China, and the United Kingdom. By investing in international markets, you protect your portfolio from downturns and crashes that may be occurring exclusively in your country.
The Power of the U.S. Dollar
As a foreign investor, the U.S. dollar value may go further in your country than your national currency. For example, the Indian rupee is falling against the U.S. dollar. At a glance, this can make one nervous—your investments using your national currency may not go as far within the U.S.. This means you pay more for the same stock than an American would. However, once your assets transfer to dollar-based assets, you’re in a good spot.
The U.S. dollar is one of the more stable currencies in the world, with its value rarely fluctuating. This means when your assets are transferred to the U.S. dollar (U.S.D), you create long-term wealth. One example we love to mention is if you purchased a stock in Google for $90 in 2005, that same share now values at around $1,600.
Final Thoughts
As a foreign investor, it’s a good idea to invest in U.S. stocks for multiple reasons. You can diversify your portfolio, allow your money to reach global markets beyond your domestic markets and the U.S., and reap the benefits of the power of the U.S. dollar.
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