How to start investing in the American Stock Exchange from anywhere in the world?

 How to start investing in the American Stock Exchange from anywhere in the world?

The answer, simply put, is that it is now easier than ever to participate in the activity of the US markets, thanks to technology and US stock trading platforms.

The Investopedia website provides an article that guides the reader who wants to invest in the American Stock Exchange to the first steps that he must take to increase the return on investment and reduce costs to a minimum.

Investing in stocks or the American Stock Exchange is no different from investing in other stock markets, but it is characterized by high liquidity and a great diversity in sectors.

You do not have to be a US citizen to be able to invest in US stocks. However, there are some things you need to know to be able to buy US stocks from anywhere in the world.

  Investing in stocks or the American Stock Exchange is no different from investing in other stock markets, but it is characterized by high liquidity and a great diversity in sectors.

First, before you start any kind of investment, specifically in the global financial markets, you must answer this question:

What type of investor are you?

When you open a brokerage account, the broker will ask you about your investment objectives and the level of risk you are willing to take.

Some investors want to take an active role in managing the growth of their money, while others prefer to “pick and forget stocks.” Investing in the US Stock Exchange is by investing in stocks, bonds, Exchange Traded Funds (ETFs), index funds, and mutual funds.

There are things you should know before investing in the American Stock Exchange:

Choose the right broker

The easiest way to be able to buy stocks on the American Stock Exchange is through an online stock broker.

Opening an account with an online trading broker is as easy as setting up a bank account.

The process requires only filling out the account opening form, and then verifying the account through proof of identity and address (sending a copy of the identity card and an invoice indicating your name and address).

Then you deposit the amount you want to start investing in your account, and you can choose the payment method that suits you from among the many payment methods provided by the broker.

There are many traditional brokerage services that include financial advice for retirement and health care.

Many brokers also offer an automated advisory service, and recently they have added more online features, including educational materials on their websites and mobile apps.

It pays to compare well before making this decision and check the ratings of the brokers where you want to open an account.

Select your favorite US stocks

The US market is home to many huge companies and major stock indices such as the Dow Jones index.

Investors and traders have enough options to invest in the US markets, but before exploring the available options, it is important for you to understand the importance of investing in US stocks. The US market has many major blue chips listed on its stock exchanges, giving investors access to giants of the US stock market such as Apple, Amazon, Microsoft and Tesla stocks. ) and others.

While each country has its own blue-chip stock, the sheer size of US companies makes it a more interesting alternative.

The US market index is also much larger compared to the benchmark indices of many countries.

Aside from companies such as Tesla, Google, and Apple, which are technologically superior to most other companies in the world in their industries, American stock exchanges also have shares of companies listed in them from China, Japan, and European companies that you can invest in.

In a broader context, The Motley Fool website, which is concerned with investment affairs, published an article in which it reviews the most important tips that a trader should know before investing in the stock markets, including the following:

Diversification and risk reduction

“Don’t put all your eggs in one basket” means that your investment in a group of assets reduces the performance risk of an investment, which severely hurts your overall investment return.

In terms of diversification, you may find it difficult if the size of your portfolio is relatively small, for example with a deposit of a thousand dollars it is almost impossible to have a well diversified portfolio, so be aware that you may need to invest in one or two companies – at most – which will increase your your risk.

Commissions and fees

In most cases, your broker will charge a commission every time you trade a stock, depending on how often you trade, and this fee can add up and affect your profit. Investing in stocks can be very expensive if you are jumping in and out of positions frequently, especially with a small amount of money available to invest.

Remember, a transaction is an order to buy or sell shares in one company. If you wish to buy 5 different shares at the same time, this is viewed as 5 separate trades, and you will be charged for each of them.

Now, imagine that you decide to buy the shares of these five companies for $1,000. To do this, you will incur $50 in trading costs – assuming the fee is $10 – which is equivalent to 5% of a thousand US dollars. If you were to invest the entire $1,000, your account would be reduced to $950 after trading costs. This represents a 5% loss before your investment gets a chance to profit.

If you sell these 5 shares, you will again incur the costs of the trades, which will be another $50. Making the round trip (buying and selling) of these five stocks will cost you $100, or 10% of your initial $1,000 deposit. And if your investments do not earn enough to cover this, you have lost money by simply entering and exiting positions.