A stock market is a platform for investing in multiple financial instruments, such as stocks, bonds, futures, derivatives, etc. After new securities are sold in the primary market, they are traded in the secondary market, where one investor purchases shares from another investor at the current market price or at a price that both the buyer and the seller agree upon. A stock exchange facilitates the trading of company shares and other securities by stock brokers. The regulatory authority regulates the stock exchanges and secondary markets. The Security and Exchange Board of India (SEBI) oversees both the primary and secondary markets in India. The Bombay Stock Exchange and the National Stock Exchange are India’s top stock exchanges.
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U.S Stock Market
In the late 1700s, a group of merchants came together to buy and sell stocks and bonds, marking the beginning of the United States Stock Market. They created the Buttonwood Tree Agreement, the basis of the New York Stock Exchange (NYSE), the biggest stock exchange in America. The Philadelphia Stock Exchange, founded in 1790, was the nation’s first stock exchange. These two stock exchanges dominated the American market for approximately two centuries before trading on NASDAQ started in 1972.
The US stock market is the largest platform for various global giants to raise capital. And, for individual investors, there are numerous opportunities to profit from the thriving US stock market and economy. The US stock market usually thrives with international money exchanges, ranging from small-caps to large-cap stocks and from US-based companies to those based in Japan and China, among others.
The US market has various stock market indices in place to allow investors to participate in the growth of some of the top firms, including Facebook, Apple, Amazon, Netflix, Google, Microsoft, Starbucks, Tesla Inc, Intel, etc. A few of them are listed below:
S&P 500 index
The S&P 500 Index is a U.S. stock market index that tracks the 500 largest U.S. companies. It is a widely utilized index that is frequently used as a gauge for the nation’s large-cap corporations. The index uses the market capitalization-weighted method to select the top 500 companies for the index. However, market capitalization is not the only factor taken into account when selecting firms for the index. A committee is appointed to select stocks based on sectors, liquidity, and market capitalization.
Nasdaq Composite Index
The Nasdaq Composite Index, or Nasdaq, covers more than 2,500 stocks, more than most other stock market indices. Since its creation in 1971, the Composite has been one of the most widely followed market indices due to its wide-ranging nature. Some of the stocks that are listed on Nasdaq include Apple, Microsoft, Amazon, Facebook, etc. Some of the securities that can be traded on the Nasdaq indices are common stocks, ordinary shares, ADRs, shares of beneficial interest, limited partnership interests, and tracking stocks.
NASDAQ 100 Index
The Nasdaq-100 consists of the hundred largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization.
Dow Jones Industrial Average (DJI)
The Dow Jones Industrial Average (DJIA) is one of the most established, well-recognized, and frequently used indexes in the world. The index consists of 30 stocks from the biggest and most well-known American corporations.
The Benefits Of Investing In US Stocks
Investing in the US stock market has some promising benefits, such as:
- Diversification
The US stock market offers Indian investors the greatest opportunity to diversify their domestic portfolio by investing in some of the world’s largest technology, Internet, pharmaceutical, and manufacturing companies, among others. A country’s economy is influenced by a number of micro, macroeconomic, and geopolitical issues. In the event of any internal economic and political conflicts within the country, the portfolio remains exposed to concentrated risk. Diversification across asset classes, market capitalization, etc. is incomplete unless you diversify geographically.
- Global Reach
The US stock markets are really global, as companies from all over the world are listed on NASDAQ and NYSE. The US markets provide access to the international market unlike any other stock market, and their global reach is unmatched. As a result, the portfolio will be spread across a large number of companies. It helps in maintaining a diverse portfolio and reducing risk.
Frequently Asked Questions (FAQs)
- How to invest in US stocks from India with Kuvera?
Kuvera is the one-stop solution for all your investments and financial goals. You can diversify your portfolio with Kuvera.
- Download the Kuvera app or visit the official website.
- Create your account on Kuvera by completing the mandatory KYC procedure. Once it is completed, select the ‘Invest’ option on the homepage, after which you can select “ US Stocks”
- You will then be directed to the Vested homepage, where you can sign up by providing your basic KYC details.
- You can then explore the list and select the stock accordingly.
