What are US stocks and how does it work?
US stocks refer to stocks listed on the US financial markets, such as the NASDAQ and New York Stock Exchange (NYSE). Investors or traders can purchase US stocks with their online brokerage account. This brokerage account can be opened with any broker of choice.
Reasons to invest in US stocks
The US stock market is home to some of the largest and most well-known companies globally. Examples include Apple, Amazon, Alphabet, Microsoft, Netflix, Facebook, Tesla, Coca-Cola, Johnson & Johnson and Nike. To invest in these leading companies, you will have to invest in these US stocks.
As a non-US citizen investing in US stocks, you incur withholding tax on dividends. Hence, many investors invest in US stocks for capital appreciation rather than dividend yield.
How to invest in US stocks
To invest in US stocks, you would require a brokerage account. Depending on the brokerage account you use, some could require you to activate the account before you can make trades on foreign markets.
Costs of investing in US shares
When purchasing US shares, you will incur trading commission fees. There could also be a minimum commission fee as well as a custodian fee imposed. Lastly, you would have to consider the 30% withholding tax on dividends that you incur when receiving dividends paid out by US companies.
How to choose the best investment brokerage for you?
There are more options when it comes to choosing a custodian account. You can choose a brokerage firm based on factors such as:
- Investment products available
- Market access
- Tools and indicators provided
- Investment insights and educational materials available
- Platform interface and user experience
To help you with your decision, check out this article on the best brokerage accounts in Singapore