In these article we have covered Cool and Unknown Facts about United States of America Stock Market. There are some things one should know if person is interested in Stock Market.
If you are talking about world economy then USA has to be there at #1 spot. US stock market is not only investment destination but it is kind of status that you have your money invested in USA stock market. And since many decades US Markets have been a popular choice of investors seeking global portfolio diversification opportunities. The fact that it is home to some of the biggest brands in the world you name brands like Apple, Google, Microsoft, Amazon the big names are there on NYSE and along with that the strong position of dollar makes it a top destination. Now I am sure you have done your research on the more serious aspects of investing abroad, but most of the people don’t know the that side of US stock market that makes him global dominator. And today I am going to discuss with you most interesting facts about the US Stock Market that most of you haven’t heard about. Hope it piques your interest!
1) The United States Makes Around 55% of the World Stock Market. There is no question about why US stock market is like status for investors. Worlds each and every big investor has his or her money invested in US stock market. And the above number is enough to justify why
The world stock market is HUGE. With 60 stock exchanges and billions of shares being traded every day, there are endless possibilities for a global investor. Of these, the US stock market is the biggest making up around 55% of the global market capitalization. Here is a quick look at the top five countries with the largest stock markets
US – 54.5%
Japan – 7.7%
UK – 5.1%
China – 4%
France – 3.2%
India contributes to around 3% of the global market capitalization.
2) Moving towards next fact which is about the terms that we use in our day to day trading routine that is bear and bull. The US Gave the World the Bear and Bull Analogy in Stock Markets.
This is an interesting piece of information about US stock market. We often hear the terms ‘bull’ and ‘bear’ associated with the stock markets. Have you ever wondered what the bull or bear have to do with stocks?
In the market, a bull phase indicates an upward trend while a bear phase indicates a downward trend. Most of the people know this. Still there are few people out there who are completely new to stock market and they get in question the moment they hear bull and bear. So, moving ahead Let’s look at the possible origin of this phrase.
If you have ever watched an attacking bear or bull, you will notice that while bull attacks in the upward direction or tries to throw its opponent in the air, a bear attacks in the downward direction and tries to knock-out its opponent to the ground. So, based on this natural habitat investors investing in US stock market started using this term.
3) S&P 500 Index Doesn’t Have 500 Stocks Next thing handful of people know about US stock market is indices. One such index is S&P 500.
As the name suggests, the Standard and Poor’s 500 (S&P 500) Index must have 500 stocks, right? No. Wrong! It is an index that comprises 505 stocks. Interestingly, the index has 500 companies, but some companies have issued multiple share classes increasing the number of stocks in the S&P 500. Like I discussed about Berkshire Hathaway in my previous video That warren buffet’s Berkshire Hathaway has two class of share. One is Class A share and other is Class B share. And the difference between those two is the price. Class A share is priced at XXX,XXX while class B share is priced at XXX. That is why it’s well said don’t judge book by its cover. Though name is 500 it actually has 505 stocks. This is an important unknown fact about the US stock market.
4) Since, it is the biggest stock market in the world it also has The Costliest Share in the World listed on it and more interesting is it belongs to a US Company.
Since the demand and supply of shares invariably determine their market price, have you ever wondered which company owns the costliest share in the world?
The answer is – Berkshire Hathaway
You already aware of the name Warren Buffett who is the investment wizard from the US. Few of us also know that Warren Buffett is the founder of the multinational conglomerate holding company – Berkshire Hathaway. As of DATE, the share is selling at $XXX,XXX. per share. As I already told These are the Class A shares issued by the company. Though they are expensive they do have class B share if want to own one.
As World’s most expensive share is listed on NYSE it has to be most favourite stock exchange in the world. NYSE is the Largest Stock Exchange in the World by Market Capitalization.
In April 2020, the New York Stock Exchange had a market capitalization of $25 trillion, which was nearly one-third of the global market capitalization across all exchanges. That said you can imagine how powerful this stock market is.
5) But NYSE is not the only stock exchange in the USA. There are number of stock exchanges which comes under US stock market. And
Currently, there are 13 stock exchanges in the US. Of these, the Intercontinental Exchange Inc NYSE, Nasdaq Inc., and CBOE Global Markets run 12 exchanges and the IEX Group runs the only independent exchange in the country. The list is really long. And I really don’t want to stretch this video. I am just listing it out here. You can pause this video and read it. NASDAQ.
[Keep this list for 20 seconds]
New York Stock Exchange
CBOE EDGX Exchange
CBOE BATS BZX
CBOE BATS BYX
CBOE EDGA Exchange
NASDAQ OMX BX
NASDAQ OMX PSX
6) Now, the next fact is about The US Securities and Exchange Commission which is a stock market regulator and it is specific to USA and every country has it.
And talking about USEC, The US Federal Government established the Securities and Exchange Commission or SEC to enforce the federal security laws, propose new rules, and regulate the country’s security transactions. The SEC has a simple three-part mission – protecting investors, maintaining order, and facilitating the formation of capital which ensures the transparent and smooth working of stock market.
And If you are planning to invest in the US markets in 2022, I will be sharing with you some factors that you might want to keep in mind before investing.
1) Before believing the inspiring numbers on media like a ‘25 percent recovery’, or the ‘highest recovery since March’, it is important to analyze the markets yourself. Statistics can be misleading if you don’t understand the base used for comparison. As most of the people start comparing current market with market was in march definitely there is going to be huge recovery but they are comparing market with the lowest point after which market started bull run. Soo, the number is going to be a big. This is just one example to let you people understand that always look at the base with which they are comparing. That will make sure that you are not getting mis-guided by media outlets.
2) Another thing to keep in mind before investing in US stock market is to look for lockdowns. The US has the highest number of confirmed coronavirus cases in the world. Hence, it is important to keep a close eye on the government’s response to the pandemic. Also, keep a tab on the response of the state governments where the majority of companies are located. Because, if government decides to lockdown it is going to cause very big trouble to businesses. Lockdowns are not good for any business. So, if you want money and want economy in good shape the world must continue without lockdowns.
3) Now next thing comes is stimulus money. It is really important for American people to get stimulus check. While the federal government has worked on stimulus packages to help the economy, keep an eye open for any additional financial assistance packages as they might speed up/ slow down the recovery process and impact the performance of the market in the near-term too. Because, we can get even third stimulus check and the reason is federal government always look at flow of cash coming in and out. And it should be there to hold growing economy.
So these are some of the thoughts I wanted to share with you guys. Remember, stock market works on sentiments. So, Before investing in a new country, it is important to understand how the local investors think and these facts can help you get a better understanding of an average US investor. And just looking stock is not going to work you should ensure that you spend some time understanding the market, economy, and the companies before investing.