The myth and the truth about investing in US market

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When I discuss investing in the US market with friends, they often share what they believe to be the truth about it. However, these beliefs are frequently incorrect. I share my thoughts below:

 

Myth 1 about US market: I'm struggling to manage the Malaysian market and still exploring the US market? 

The Truth: For the past ten years, investing in US index (ETF SPY) and you could have made 180% profit, compared to KLCI you still losing 11%. 


US market has gone in uptrend for the past many decades mainly due to:
i) Inflation - As inflation rises each year, increased consumer spending will directly translate into higher revenue for U.S. companies.
ii) Increasing wage, population, consumer growth, the explanation is same as i)
iii) Political stability (unlike CN or MY which scare many investors away, thus market remain weak in long term)
iv) Periodic Changes in Index - Companies with weaker performance will be periodically replaced by stronger ones within the index's constituents, leading to a long-term upward trend in the index.
v) The majority of the top companies in the world are based in the U.S., so by investing in U.S. stocks, we indirectly become part-owners of these companies.
vi) those top companies in US pay really low tax due to their multinational status, with some subsidiaries operating in tax-exempt countries, indirectly contribute to more profit in their QR

 

Myth 2 about US market: I will got a heart-attack seeing the US stock prices as they move too fast
 

The Truth:
- For short term trading, suppose we should not see the price movement too often, in order to produce good results. This could be done by using the stop-loss function, together with a comprehensive trading plan.
- For investment, we can invest in top 1% of global companies in US market, so in the long run we will do well if we pick the right ones. This is why I never check my prices for my investment positions, unless a friend brings them up for discussion. Or close your eyes and buy SPY/QQQ/DIA ETF, (representing S&P500, NASDAQ or DJIA index), they are in the uptrend in long run... unless one day China overtakes the US 🤷🏼‍♂️
- Again If 10 years ago u close your eyes and buy SPY, now you are making 180%. This is the best proof.
 

 

Myth 3 about US market: I need to pay more buying a US stock by 4.3x (exchange rate). 

The Truth: We can actually buy as low as 1 unit of share in US. If we normally buy RM4300 for a stock in MY market, then just buy 1 share of a USD1000 stock, the value is still the same. If a RM 1 stock (in MY) can move up within a %, US stock have the potential to move up even more because of all the advantages mentioned earlier, especially we can choose the top 1% companies in the world to invest in.

What are you waiting? Jom and open a US account!

To open US account via M+ Global, visit here:
https://joy-of-trade.blogspot.com/2024/06/want-to-open-m-global-myushk-account.html

P/S: After opening an account using P3KI invitation code, You will be invited to join my personal group where I share the intrinsic value (IV) of the top companies to my clients, and we only buy when the price is trading below the IV. The below are some of the stocks which benefited us since we holding them since May 2023.

 





 


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