Introduction
The US dominates the global stock markets. Valued at a staggering $62.3 trillion, the US market accounts for about 60% of the world’s market capitalization. It far outweighs countries like China, Japan, and the UK combined. With its 2024 gains and two-year bull run, the US market has outperformed the global markets in 14 of the last 15 years.
This global significance and growth of US markets has attracted millions of investors from different parts of the world into the country. Earlier, investors in India had to fulfill various regulatory and compliance requirements to be able to remit money and invest in the US market. But with the rise of digital trading apps like Appreciate, Indian investors can participate digitally and easily in the US markets, just like in domestic ones.
What makes the US market different?
Global Innovation Hub
Over the past two centuries, the US has been the hub of innovation and technological advancements. From the laptops and smartphones, we use daily, to the airplanes and now artificial intelligence, several breakthroughs have had an American mind behind them. Every major US company owes its success to innovation, be it Meta, Apple, Tesla, or Nvidia. All of these companies did something that was never done before, leading the wheel of invention. For this reason, beyond growth and stability, global investors look to the US for the next groundbreaking discoveries.
Oldest Market in the World
Founded in 1792 the New York Stock Exchange (NYSE) is the largest and one of the most influential stock markets in the world. Throughout its history, the US markets have undergone various events and changes. As a result, multiple measures have been taken to protect investor interest, increase financial transparency, and avoid market manipulations. The SIPC insurance in the US also insures portfolios up to $500,000.
Strong Regulations
With over 230 years of market history, the US has built one of the world`s most robust regulatory systems. Between 2017 and 2020 alone, the US market regulator SEC, the Securities and Exchange Commission, returned approximately $3.5 billion to defrauded investors and secured more than $15 billion in financial penalties.
High Returns
According to Axios, investing in the S&P 500 can help you beat an average billionaire.
The above data shows that those who remain invested in the S&P 500 for 10 years or more can get higher returns than billionaires. Not only 10 years but also 5 and even 4 years can deliver substantial returns.
Apart from that the US markets are currently on a bull run. According to Carson Investment Research, since 1974 an average bull market has lasted for 5.1 years, with the highest one lasting for 12.3 years. In the last 50 years, there has been only one instance when the bull run ended before turning 5, during the COVID pandemic. Therefore, it’s safe to say that more years are still left before the current rally ends.
Biggest Companies
What makes the US market truly stand out from the rest of the world is the number of trillion-dollar companies it has, even bigger than the GDPs of most countries. Of the 12
members of the trillion-dollar club, 9 are US-based. These 9 companies alone are worth more than the second largest market in the world, China, which is worth just over $12 trillion. In just the last 5 years, 5 US companies achieved the coveted trillion-dollar valuation.
US Markets vs the World
Looking at the past 25 years the S&P 500 has consistently outperformed the MSCI World Index, which tracks the 1,500 companies across 23 developed countries. In 2024 alone, the S&P500
returned 25.02% while the MSCI World could only return 19.19%. This was true for every year except for one in the last 15 years. Since 2010 the S&P 500 has been beaten only by two other indices, both being US-based. NASDAQ Composite and the tech-heavy NASDAQ 100.
Conclusion
From the data provided above US markets emerge as the clear winner among the global markets. In 2024 when the S&P 500 gained 25.2% whereas the Nifty 50 went up 8.8%. This is one reason among others, why Indian investors are actively diversifying their portfolio into the US.
Investment platforms like Appreciate not only make the markets more accessible for retail investors but also more rewarding. With zero AMC, withdrawal, and remittance charges, investing in the US costs almost the same as investing in domestic markets. Additionally, on Appreciate every investment is protected for up to $500,000 under SIPC, allowing investors to invest their money, worry-free. You can download the Appreciate trading app and start investing today in ETFs or stocks of your choice.
Disclaimer: Investments in securities markets are subject to market risks. Read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory.
