Investing in US Stocks
Introduction to US Stocks
The US stock market is the largest in the world. The number of listed companies is more than 10 thousand and the market value totals approximately US$20 trillion. Since there are many leading enterprises of other countries choose to list on US stock market, investors can trade stocks that catch global attention through American security markets.
In order to attract more foreign investors, non-resident foreign companies, trusts, banks and individuals can trade stocks, bonds, commodity contracts and options 100% free from U.S. capital gains taxes.
Reasons of investing in US stock markets, including:
- Various stock categories
- Strict and effective laws and regulations
- Trading outside office hours
- High market liquidity and trading volume
- Efficient and transparent markets
- Tax-free from capital gains taxes
Major stock market exchanges in US
The two major stock market exchanges in U.S. are New York Stock Exchange and Nasdaq.
- New York Stock Exchange, NYSE (www.nyse.com)
Based in Wall Street, New York City, NYSE is considered the longest histories, the largest, and the most famous stock exchange. The numbers of listed companies are more than 3000. The New York Stock Exchange is a sophisticated market which has strict listing requirement. - Nasdaq Stock Market (www.nasdaq.com)
Nasdaq Stock Market operated since 1971, and having nearly 7000 corporations list their shares on the Nasdaq. She is the second-largest stock exchange by trading volume in the United States.
Three major indices in US
- Dow Jones Industrial Average，DJIA
The Dow Jones Industrial Average was invented by Charles Dow back in 1896, which is the oldest and single most watched index in the world. The DJIA is a price-weighted average of 30 significant stocks traded in United States. With the current inclusion of only 30 stocks, critics argue that the DJIA is not a very accurate representation of the overall market performance even though it is the most cited and most widely recognized of the stock market indices. - S&P 500
S&P 500 is owned and maintained by Standard & Poor’s, a division of McGraw-Hill. 500 stocks had been chosen based on their market size, liquidity and industry grouping, among other factors. Since the DJIA contains only 30 companies, most people agree that the S&P 500 is a better representation of the U.S. market. Therefore, it is one of the most commonly used benchmarks for all over the world. - NASDAQ Composite Index
Launched in 1971, the Nasdaq Composite Index measures all domestic and international based common type stocks listed on the Nasdaq Stock Market, which is calculated under a market capitalization weighted methodology. The Nasdaq Composite Index measures all NASDAQ domestic and international based common type stocks listed on The Nasdaq Stock Market.