WHICH STOCK MARKET IS BEST TO INVEST

WHICH STOCK MARKET IS BEST IN THE WORLD

If you are wondering which stock market is the best in the world ,then consider the US stock market that houses some of the largest and successful companies in the world. These companies are built on solid fundamentals that paired with the fact that the market is well diversified across various sectors should make an investor feel confident. The diversity offered is not only in terms of the various sectors such as health; technology; energy among others, but also the geographical diversity for foreign investors that will add stability to your portfolio. 

Some reasons why the US stock market is the best to invest in include:

1. most liquid and largest market.

When considering which stock market is best to invest in, liquidity is an important factor that should weigh in. The Nasdaq US in the year traded approximately 2.2 trillion US dollars making it the largest market to trade. It being the largest means that an investor has infinitely more opportunities to make profitable investments

The markets open and close at 9:30 a.m. and 4 p.m. Eastern time on weekdays (except stock market holidays). This coupled with the large turnover guarantees that an investor can find a buyer or seller of any stock at any time within the trading hours. If that is not appetising enough for an investor, the US market’s capitalization is the largest in the world, nearly five times that of China. Market capitalization refers to the total value of outstanding shares of a listed company that can be traded.

2. The market is designed to go up over time.

The average return of the S&P 500 stock market for a 5 years period between 2016 and 2020 was 15.27% and 13.06% when adjusted for inflation. There are alot of direct investments into the stock market monthly from retirement plans, reinvested dividends among other programs that forces the price of stocks to increase. Secondly if a stock in the S&P 500 or the Dow Jones industrial average underperforms it is removed from the list and a better performing stock is added to prop up prices again. The market has also been known to oftenly keep up with and even beat the inflation rates helping the investors make more money.

You can also take advantage of compounding your interest to make more money. Depending on your broker or investment account, you can opt to have your interest compounded annually, semi-annually or even on a quarterly basis.

3. Global exposure and diversification

In 2017, the S&P 500 foriegn sales showed that over 43.7% of their revenue was made from overseas sales. Majority of the companies listed in the US stock market are also foreign companies that have leveraged on the large amount of investors available in the US. By investing in the US stock market you are not only investing in the US but internationally by extension which is a great diversification and offers more stability to your portfolio. An investor will be spoilt for choice in the over 4500 companies that they can invest in with a majority of them being global brands.

4. Fractional investment of the US stock

Owning a single share of a major company’s stock can be expensive and out of reach for a majority of international investors from smaller economies. The market allows for an investor to own fractions of a share which will allow for more inclusivity of all investors despite the depths of their financial pockets. This will enable the investor to accumulate shares over time making it the best stock market to invest in as a small investor. The foreign investors can also take advantage of the US dollar’s currency appreciations with relation to their domestic currencies. 

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