Reasons To Trade U.S. Market
By Hooi Mun Keong, Digital Educator
Facebook. Amazon. Apple. Netflix. Alphabet (Google).
Imagine Owning These Stocks At The Palm Of Your Hand.
Stumbling across this article would probably mean you've heard or knew that our Cash Upfront Account has been upgraded to support trading in both Malaysia and the U.S.
Now while the most seasoned investors may not have forayed beyond the Malaysian borders, this article shares the basics that you should know BEFORE dipping your toes into one of the most exciting stock markets in the world.
Here we go…
Reason 1: Diversify Geographically
You can't count on owning just local stocks. Why? Cause it’s super risky putting all your “eggs” in one basket especially when Bursa Malaysia is now one of the lowest valuated stock markets in the world. So, we suggest sprinkling a little western flavor to your stock portfolio.
The idea of diversification may already exist in your current Bursa Malaysia portfolio (eg: owning stocks from the Tech, Construction and Healthcare sectors). Adding U.S. stocks will provide another layer of stability to your strategy.
At the time of writing, the Bursa Malaysia is still struggling to climb and return to the 1,600 level while the S&P 500 and NASDAQ markets have already hit their new highs.
By blending both markets, your portfolio performance will not be dependent on the performance of a single market anymore. You might even see your portfolio performing better than expected even if one market does not perform as expected.
That my friend…is the beauty of diversification.
Reason 2: The Largest Stock Market In The World
The U.S stock market is approximately 5X MORE than Bursa Malaysia in terms of the number of listed companies and with over USD $49 trillion of market capitalization (total value of all the shares listed in the U.S. market).
It has listed many strong, familiar brands like Amazon, Apple and Meta (aka Facebook) and Microsoft. And mind you, these companies are still growing aggressively.
With these huge companies listed on the US market, it’s easy to imagine that many events such as the US foreign policies, Federal Reserve Board (FRB)’s announcements to its domestic financial policies, and the presidential elections, etc will influence not only our local Bursa Malaysia market, but other markets globally.
Reason 3: High Growth Potential Of US Companies
One of the key ideas to score big on the stock market is to invest in companies that have huge growth potential.
Looking back at Bursa Malaysia, it's not rocket science as to why most investors prefer to own Tech stocks as they see these companies having tremendous growth opportunities. Enter: Electronic vehicles, Solar and LED.
Imagine though the opportunities that await you when you trade on the US Stock Exchange given the sheer size of high growth potential of U.S. tech companies. Many of which you’re already familiar with and they have no plans on slowing down (despite how successful their products and services already are). Enter: Amazon, Netflix, Shopify and Spotify.
OH! and don’t forget Tesla… autonomous driving IS the future.
So if we’ve sold you on looking to the US as a possibility to diversify your funds, how about activating your foreign market service now. It’s super simple (via your dashboard) and completely FREE.
Or if you haven’t yet signed up with us, do so now via a Cash Upfront Account and don’t forget to activate your foreign market service AFTER you’ve been approved.
Not yet sold? Check out our other RakuCampus blogs.
RakuCampus US #2: What you should know BEFORE trading on the US Markets
RakuCampus US #3: Fees & Corporate Actions [coming soon]
RakuCampus US #4: US Companies Issuing High Yield Dividends [coming soon]
