Earlier this month, the US Federal Reserve System (Fed) indicated that they will be cutting interest rates throughout 2024. This created a euphoric sentiment in the market and that drove most asset classes up in price. So much so that even CNBC said we can expect a ‘very bullish’ year for stocks in 2024!
So, if you’ve been wanting to get into US stock investing, next year might just be the perfect time to do so! But are you wondering how you can do this?
Well, here’s a step-by-step guide on US stock market investing for Malaysians, including some of the platforms you can use.
Step 1: Understanding the US Stock Market
Before diving in, it's crucial to grasp the basics of the US stock market. It's home to the world's largest exchanges, like the New York Stock Exchange (NYSE) and NASDAQ, featuring a diverse range of established companies like Coca-Cola, IBM, Apple and Google.
So, understanding the market's dynamics (including economic indicators, corporate earnings reports, political events, and more), key indices (such as the S&P 500 and Dow Jones), and trading hours (taking into account the time difference) is essential.
Personally, when I’m trying to understand things like these, I’ll use the platform, Moo Moo.
This financial information app provides stock analysis tools, facts and reports on companies’ performance, real-time pricing as well as economic news that might affect the financial markets.
Step 2: Choosing the Right Investment Platform
As a Malaysian investor, your choice of platform is pivotal. Consider factors like ease of fund transfer, fees, and the range of available investment options.
Preferably, you’ll want to look for platforms that offer access to US stocks, are user-friendly, and have reasonable fees. Popular choices include M+ Global and Interactive Brokers.
Personally, I use M+ Global because their trading app is very intuitive and easy to use. The features that they offer are also quite comprehensive including market overview, sector and top stocks performance, as well as the ability to create my own watchlist.
For more details on M+ Global, check out the review I wrote here.
BTW, if you sign up for M+ Global and deposit RM2,000 by 31 December 2023, you’ll be able to get a free Palantir share – one of my favourite stocks! Don’t forget to use this link and code: T30.
Step 3: Opening and Funding Your Account
Once you've chosen a platform, the next step is to open an investment trading account. This process usually involves providing personal identification and financial information – typically, this includes your income source and investment experience. This step is not just a formality; it helps the platform tailor its services to your investment needs and provide appropriate guidance.
Funding your account usually requires converting your MYR to USD, which can be done through the platform or your bank. It’s essential to be mindful of the exchange rates and transfer fees during this process.
Step 4: Research and Planning
Before investing, it’s crucial for you to conduct thorough research and have a plan for your investments.
This research should include understanding the companies you're interested in, their financial health, market trends, and potential risks. This is where tools like financial news websites, investment apps, and market analysis can be invaluable.
Personally, the platform I use for this is a mixture of Moo Moo, M+ Global as well as Seeking Alpha. To me, Moo Moo provides the cold, hard facts when it comes to financial news; M+ Global is more towards understanding a company’s financial health, stock price and so on; Seeking Alpha, on the other hand, gives me insights from different perspectives.
This is because Seeking Alpha has a community of experts who will give their analysis and insights whether on the market or individual companies. It’s very opinionated and from that, I can understand the different points of view which will help me determine if a stock is one that aligns with my goals.
Step 5: Placing Your First Trade
With your investment account funded and a plan in place, you're ready to make your first trade.
Start by navigating to the trading section of your platform. Here, you can search for stocks by ticker symbols (e.g., AAPL for Apple). Decide on the number of shares or the amount of money you wish to invest. You'll encounter options like 'market order' (buying at the current market price) or 'limit order' (setting a price you're willing to pay). Review and confirm your trade, and voila, you’re a US stock investor!
Step 6: Monitoring Your Investments
Investing is not just about buying stocks; it's also about monitoring and reviewing them to ensure they still align with your investment goals.
You’ll want to do this by keeping track of your investments’ performance and the overall market.
Staying informed about relevant news and being prepared to adjust your strategy if needed is also something you should be ready for.
Should You Invest In The US Stock Market From Malaysia?
Investing in the US stock market from Malaysia is a viable and potentially lucrative option, especially with the anticipated bullish market in 2024.
However, it requires careful planning, research, and the use of the right tools and platforms. As an investor, it’s vital to stay informed, be adaptable, and continuously assess whether your investments align with your financial objectives.
With the right approach and resources, Malaysian investors can effectively navigate the US stock market and capitalize on its opportunities.
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