In pursuit of high returns, more and more people are choosing stocks in US companies. Is it worth trying to make money on them to an unprofessional investor.
A few years ago, investment in American or European companies was exclusively the lot of wealthy citizens who opened foreign currency accounts for this in foreign jurisdictions, such as Cyprus. Now even a layman with a thousand dollars can try to make money on Facebook or Apple. It is enough to open a brokerage account or IMS (individually investment account) with a broker and you can trade.
The only condition is that all transactions are conducted in dollars, because we are dealing with foreign stocks. If you have opened a brokerage account, you can transfer currency to it, for example, through the Internet bank. In the case of IIS, deposit your money and then convert it at the exchange rate to dollars.
All investment income is also calculated in foreign currency. Therefore, from the point of view of diversification of investments, foreign stocks are perfectly suited. However, you must remember that for the profit from foreign investment you have to pay tax. The risk is that if the exchange rate drops by the time taxes are paid, you will still have to pay a tax related to income from revaluation of the currency.
US market grows this year
The US technology sector has already grown by 25% this year. The leader of the DJ-30 index, Boeing went up by about 80%, Apple shares rose 45%, but Ford added just about 3%.
Another approach is to buy a large number of issuers in the portfolio whose shares are weakly correlated with each other, and periodically rebalance so that the share of one paper does not greatly exceed the share of others. This will significantly reduce the risk of volatility.
What to get
The growth of mobile gadgets increases the demand for content consumption – films, customers, cartoons, video games. In the American market there are huge corporations engaged in the production of video games, content. This is Electronic Arts, Disney, Netflix. All these companies will remain attractive with the growth of purchasing power of the younger generation.
The financial sector may also become a growth leader in 2018 under the influence of tax reform, deregulation, which promises the new head of the Fed, Jerome Powell. A positive effect will also have an increase in the refinancing rate.
Stable profit is always generated by shares of payment systems. They have been showing steady growth for many years. Mastercard shares, for example, show steady growth, only this year they grew by 40%.
Please note that assumptions about the growth of stocks of a particular sector are just a theoretical forecast. One should be careful with regard to the acquisition of assets.