Beginner's Guide to Investing in U.S. Stocks: How New Investors Can Start Their U.S. Stock Investment Journey

Why Are Global Investors Investing in U.S. Stocks

Investing in U.S. stocks has become a choice for many individual investors, and there are several reasons worth understanding. The U.S. stock market is the largest and most liquid capital market globally, bringing together top-tier companies like Apple, Microsoft, Amazon, and more. At the same time, the U.S. stock trading system is transparent, with few restrictions, providing investors with a relatively fair trading environment.

Compared to other markets, what is the biggest advantage of U.S. stocks? Simply put—lower entry barriers, more choices, and stronger market vitality.

Important Rules You Need to Know Before Trading U.S. Stocks

Before officially investing in U.S. stocks, mastering the basic trading rules is essential. Here are the core details:

Trading Venues and Hours

U.S. stocks are mainly traded on three exchanges: New York Stock Exchange (NYSE), NASDAQ, and American Stock Exchange (AMEX).

Standard trading hours are Monday to Friday, 9:30 AM to 4:00 PM Eastern Daylight Time (EDT) in summer, and 10:30 AM to 5:00 PM in winter. There are also pre-market trading (4:00 AM-9:30 AM in summer, 5:00 AM-10:30 AM in winter) and after-hours trading (4:00 PM-8:00 PM in summer, 5:00 PM-9:00 PM in winter).

Note that these times are based on Eastern Time (GMT-5). Investors in different regions need to convert to their local time zones.

Trading System and Costs

U.S. stocks adopt a T+0 trading system, meaning stocks bought on the same day can be sold on the same day. The minimum trading unit is 1 share (one of the biggest advantages compared to other markets), and the trading currency is USD. There are no daily price limits, but circuit breakers are in place. Settlement for sales occurs on T+2. Transaction fees are usually between 0.5% and 1%.

Choosing the Right U.S. Stock Account for You

Before opening an account, you need to clarify what type of account suits you, as different accounts have different trading permissions.

Cash Account: The most basic option, usually requiring around $500 to open. This account can trade stocks and ETFs but does not allow short selling. It uses T+0 settlement. Suitable for beginners who prefer stable investments and do not pursue high leverage.

Margin Account: Similar to borrowing money from the broker for investment, typically requiring over $2,000 to open. Supports T+0 trading, allows both long and short positions, and the main attraction is leverage to amplify returns. Suitable for investors with some experience willing to take higher risks for higher rewards.

CFD Account: A relatively popular method in recent years. Trading U.S. stocks via Contracts for Difference (CFD) requires very low account opening thresholds, with minimum trading units of 0.01 lot and margin as low as $50-$100. Supports leveraged trading, suitable for short-term traders and investors with advanced trading strategies. However, leverage is a double-edged sword; improper use can magnify losses.

Core Advantages of Investing in U.S. Stocks

1. Lower trading costs, suitable for small investors

U.S. stocks have no minimum lot restrictions; you can trade as little as 1 share. This means you can directly buy high-priced stocks. For example, Tesla’s stock price is about $260, so you only need $260 to buy one share, without needing to accumulate a full lot.

Compared to other markets, the thresholds are much higher. Taiwan stock market minimum is 1 lot (1000 shares), Malaysia’s minimum is 1 lot (100 shares), Hong Kong stocks usually 1 lot (100-1000 shares), and China A-shares minimum 1 lot (100 shares). Clearly, U.S. stocks are more friendly for small investors.

2. Rich stock selection

There are over 8,000 companies listed in the U.S., far more than other markets. Many internationally renowned companies—such as Alibaba, JD.com, TSMC—choose to list in the U.S. because of the highest liquidity and most efficient financing.

3. Concentration of tech innovation companies

NASDAQ is famous for tech stocks, gathering giants like Apple, Amazon, Google, Tesla, and more. As a global innovation hub, many emerging tech and business model companies prefer listing in the U.S., giving investors the chance to participate in the wave of innovation.

4. Strong market liquidity and difficulty of manipulation

The average daily trading volume of U.S. stocks often exceeds 10 billion shares, attracting investors worldwide. The huge trading volume makes market manipulation highly unlikely, ensuring greater fairness and transparency.

5. Robust economic fundamentals

The U.S. is the world’s largest economy, with a large population and high market activity. Most listed companies operate stably and pay generous dividends, making long-term investment returns relatively attractive.

Notable U.S. Companies to Watch

As a beginner, stock selection should follow the principle of “future growth potential or long-term stable profitability.” Here are some companies worth researching (for reference only; always consider your own financial situation before investing):

Technology: Apple (AAPL), Microsoft (MSFT), NVIDIA (NVDA), Intel (INTC), Amazon (AMZN)

Healthcare: Johnson & Johnson (JNJ)

Consumer: Walmart (WMT), Procter & Gamble (PG), Starbucks (SBUX)

Other International Companies: Alibaba (BABA)

Three Ways to Invest in U.S. Stocks

Method 1: Direct Purchase of Real U.S. Stocks

This is the most straightforward approach—buy and hold real U.S. stocks. U.S. stocks operate on a T+0 system, allowing same-day buying and selling with high liquidity. Transaction costs are low, mainly just broker commissions, with no other fees. The U.S. does not levy capital gains tax (but dividends are subject to a 30% withholding tax).

Advantages: Direct ownership of the company, access to dividends and voting rights, high market liquidity

Disadvantages: Time zone differences may require late-night trading; opening a real account can be somewhat complicated

How to buy: Different regions have different channels. Investors in Taiwan can use cross-trading (about 1% fee); Malaysian investors via local brokers; Chinese investors through legal channels.

Method 2: Investing in U.S. Stock ETFs

ETFs are exchange-traded funds that pool multiple stocks, allowing diversification with a single purchase. U.S. stock ETFs are abundant, including tech ETFs, healthcare ETFs, bond ETFs, etc.

Management fees for U.S. ETFs are very low, typically 0.04%-0.1%, much lower than similar products in other markets.

Advantages: Diversification reduces risk, no need for frequent market timing; low management fees; less effort required for monitoring and stock picking

Disadvantages: Different ETFs within the same sector may vary significantly; price gap risks, especially in the first half-hour after market open

How to buy: Through brokers supporting U.S. ETF trading.

Method 3: CFD Trading

CFDs are financial derivatives based on U.S. stocks. You do not need to own the actual stocks but trade based on price movements, similar to betting on the rise or fall.

Core advantages:

• Flexible leverage, small margin controls large trades
• T+0 two-way trading, can go long or short
• Many trading opportunities; any asset with price fluctuations can be traded
• Multiple account types, can trade U.S. stocks, forex, gold, indices, cryptocurrencies, etc.

Risk warnings:

• Leverage amplifies both profits and losses
• Must assess your risk tolerance before opening positions
• Not suitable for beginners without risk awareness

Suitable for: Small capital, those seeking higher returns via leverage, short-term traders willing to accept risks

Comparison of the Three Methods

Core Advice for Beginners Investing in U.S. Stocks

Different investment methods suit different people. If you have limited funds but want quick gains and can bear certain risks, CFDs might be worth trying. If you prefer steady long-term growth, direct purchase of real stocks or ETFs is more suitable.

Investing in U.S. stocks requires combining theory and practice. Learning the rules is just the first step; gaining experience, understanding the market, and recognizing risks through actual trading are more important. Even investment masters have developed a calm mindset after experiencing multiple market fluctuations.

Therefore, beginners should not seek quick profits. Start small, learn while doing, and gradually build your trading system. Only then can you achieve steady progress in the investment market.