Understanding the Basics of the US Stock Market

 Understanding the Basics of the US Stock                                    Market

PREFACE

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Introduction

Indian Vs U.S stock 

About NYSE

About NASDAQ

Width comparing indices

5 Reasons why we should invest in U.S stock 

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Introduction-:

Today we discuss in our article about understanding the basics of u.s stock markets

how many u.s products we do consume day in and day out

if we are the consumers of those products why not become the owners of those  

        products and that is the reason why that might be the reason why there are so

        many Indians who are going crazy behind this as to how can we invest in the u.s

 stock markets but as usual before we start investing we should understand the basics

 of u.s stock markets.

Indian Vs U.S stock market 

let's try and compare Indian stock markets versus u.s stock markets 

so the very first point of difference is that in india

POINT 1

•      we have BSE and NSE bombay stock exchange national stock exchange as

 our major stock exchanges in india which are the major stock exchanges

•       In US stock market they are NYSE and NASDAQ so these are the major

 stock exchanges point

POINT 2

 Timing in india our markets are open from 9:15 in the morning to 3:30 in

 the afternoon

• u.s stock markets are open from 9:30 in the morning to four in the evening 

POINT 3

the major indices or we call them as index indexes singular indices plural

 major stock market indices in India sensex and nifty
  

• the major indices in usa in usa it's dow nasdaq s p 500 and one of the

upcoming indices is russell 2000 which focuses on small caps 

POINT 4

 circuit filters

circuit filters are market wide circuit breakers so 

what is a circuit filter ?

it means that the market holds or stops after certain conditions are hit

what is the indian scenario if markets crash?

 by 10 percent there's a halt at 15 another hot and if market crashes by 20 percent

 market stops for the entire day these are the levels of fault or stoppages in usa the

 levels are 7 ,13 and 20 

POINT 5

one last amazing point of difference in indian stock market and u.s stock market is

 that can we invest in fractional shares so just as an example

•            " i'm sure many many of you might not have invested in mrf share why

 so expensive 80 000 rupees plus for one share so expensive i can't afford it right it

 would have been so amazing if i can invest 100 share of mrf but unfortunately

that's not allowed so in India we are not allowed to invest in fractional

 shares minimum share that you have to buy is one 

• but in u.s stock markets fractional investment in shares is allowed so i hope

 you have understood the major five points of differences between Indian stock

 markets and u.s stock markets

"now we just try to understand the difference between Indian stock exchanges and the u.s stock exchanges"

the two major stock exchanges in u.s one is nyse and one is nasdaq so let's compare

them one by one first we are going to compare

nyse's major points versus nasdaq's major points

ABOUT NYSE -:

>> so first nyse it is one of the oldest stock exchanges and nyse was founded way            back in 1792

>> The market capitalization of an nyse it is 25 trillion dollars

>> right now nyse has 2800 companies which are currently listed

         vis-a-vis

>>  In nysc more of blue chip industrial companies are listed in

>>  nyse have a trading floor

ABOUT NASDAQ-:

>> on the contrary nasdaq was founded in 1971 and it is world's first and largest

electronically traded stock market

>> market capitalization of an nasdaq it is 20 trillion dollars that's the

second largest

>> right now nasdaq has 3300 companies which are currently listed

         vis-a-vis

>>  In nasdaq more of technology-based company are listed

 >> nasdaq doesn't have a trading floor

companies are listed

nasdaq and nyse both are huge in their market capitalization how huge i'll give you

 a simple comparison our entire indian economy is like three trillion dollars  but if

 i compare it with the market capitalization of an nyse it is 25 trillion dollars that's

 for nyse and for nasdaq it is 20 trillion dollars that's the second largest

   

 what kind of companies were listed in nyse and in nasdaq?

NYSE

 I just told you like half a minute ago that in nyc traditional blue chip companies are

 listed and in nasdaq  i.t related companies are listed now what does that mean let's

 understand so in the stock biggies are birth share hathaway, alibaba group holding

 company johnson and johnson jp morgan chase and

company exxon mobil corporation bank of america walmart stores inc wells fargo

 and company visa inc procter and gamble company at inc and pfizer inc so all these

 are all these are blue chip traditional companies

NASDAQ

now which companies are the stock biggies which are listed in nasdaq it's apple

amazon microsoft alphabet that's google tesla facebook nvidia paypal netflix intel

adobe zoom oh my god so amazing names but did you understand what difference

what intel was not listed in NYSE alphabet amazon alphabet google amazon

these were not listed in nyc these are listed in nasdaq

WIDTH COMPARING INDICES

now let's move on with comparing the indices like as i told you india has bse and

 nse usa has three major stock market indices which are dji there is a dow jones

industrial average we have nasdaq and we have snp 500 as i mentioned some

 time ago we also have russell 2000 which tracks all the small cap companies but we

 are not going to talk about that index right now we are going to focus only on

top three so let's understand them one by one

DJI(dow johnson INDEX)

• now let's start with understanding the dow jones industrial average dji

also called as dow 30 it tracks 30 bluechip companies which are listed on

nyse and nasdaq means what i'm sure you might have gotten confused how come

 an index can track companies which are listed on both nyse and nasdaq

these 30 companies from nyse as well as from nasdaq i hope you have understood

• what's one more important point of dow jones it is a price weighted index 

            what do we mean by price weighted index stocks ?

which have higher prices will be given more weightage stocks with lower prices will

 be given comparatively lower rates

NASDAQ INDEX

• now what does nasdaq represent nasdaq represents an index of more than

 2500 companies which are listed in nasdaq tracks those companies which are listed

 in nasdaq yes i'm correct so what does this mean nasdaq is the name of that index 

•  " well as the stock exchange those companies which are listed

 in nasdaq but which are headquartered even outside usa nasdaq covers

 the top 2500 companies which may or may not be headquartered

 in usa "

•  it is a market cap weighted index nasdaq will give more importance to market

 capitalization

S&P 500 INDEX

s&p 500 index the full form is standards and poor's 500 

s&p doesn't track the income levels it tracks 500 largest u.s publicly traded

companies these companies have to be headquartered in usa so this is a

 little bit different from nasdaq this index is also a market cap weighted

index means what it'll give more importance to market capitalization rather than

 price of stocks

5 reasons why we should invest in stocks which are listed in the u.s stock markets

#1  DIVERSIFICATION

the very first reason is diversification how do we interpret this some money

should be invested in stocks some should be invested in mutual fund some in gold

 some in traditional investment instead of all these things if i use only stocks

why stocks only in india why not sat samantha

we should also invest in stocks which are listed outside india

and that can give us a good geographical diversification also to our portfolio 

#2 OUTPERFORMENCE

u.s markets have outperformed the indian stock markets if you want to

 look at it visually see how u.s marketshave always outperformed the indian

stock markets so if you see all in all the pattern was same but the rate at

 which the returns were given by u.s stock markets was a shade higher

as compared to the indian stock market

#3 

we'll get an exposure to all these high-tech company stocks like apple, amazon,

 google, alphabet basically why not invest in these shares if i'm

using the products of these companies day in and day out

#4 DEPRECIATING INDIAN RUPEE

 

 Invest in u.s stock market is to get a very amazing advantage of the depreciating

Indian rupee let's take an example-:

"       

        assume today's rate of one dollar of INR versus USD is one dollar is equal to 72

rupees way back in 1947 the rate was one dollar is equal to one rupee now assume

 assumption economic assume that at that point of time i was allowed to invest in

 u.s stock markets and at that time some share "abc"(company name) incorporated

 whatever that was priced at one dollar and today the price of that same company

today also it is one dollar only so as an investor did i gain anything 1947 also it was

 one dollar today also it is one dollar as an investor  i gained a lot 73 times i've

enjoyed so that is the impact of a depreciating rupee

                                                                                                         "

#5 FRACTIONAL SHARES

  "  we can invest even in fractional shares fractional investment is allowed in simple

 words i can invest in 110 tesla 110 share of tesla i can invest in one fifth share of

berkshire hathaway and that's that's all i think these are the top five reasons i

 believe why we can invest in u.s stock markets     "

how do we invest in companies which are listed in usa

for that you need to open an account and you can open an account with end

 money free of cost in just two minutes even when you buy or sell shares the

 brokerage is zero so free brokerage free account opening how do you proceed

 you just have to head on to the end money app go to the us stocks from the

 dashboard

click on create free us stock account then you will get some basic screen

instructions fill in your details it should not take more than two to three minutes

and done there you go you have a u.s stock account and that's where you can start

 your journey of investing in stocks which are listed in the u.s stock market 

CONCLUSION -:

I HOPE YOU GUYS UNDERSTAND PROPERLY INVESTING IN US STOCK

 MARKET IS BETTER FOR YOU OR NOT IF YOU GUYS HAVE ANY DOUBT JUST

 COMMENT DOWN AND ASK ANYTHING I WILL TRY TO EXPLAIN WANT

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