Best US Stocks 2022/2023
The United States has two major stock exchanges, which are also the largest in the world: The NASDAQ and the New York Stock Exchange (NYSE). Both exchanges are very popular with traders and investors. This is due to the many options that the American stock exchange offers. Large and well-known companies such as Facebook, Microsoft and Berkshire Hathaway are listed here. The attention that is given to the American stock market worldwide is not only due to the listed companies. It is also a lot easier for traders to trade in American shares these days . Thanks to the internet and all the technology, investing has become a lot more accessible.
In this blog we look at the US stock market, what drives US stocks and what the best stocks in America are.
What are US stocks and what is the US stock market?
As mentioned, the American stock market consists of the large New York Stock Exchange and the Nasdaq Stock Exchange. Here, the shares of American listed companies are bought and sold. The companies in question include well-known names such as Amazon, McDonald’s, Nike and Walmart.
To buy and sell American shares, you use a broker or agent. The shares that are traded are subject to federal supervision by the American Securities and Exchange Commission (SEC).
As is the case with every stock exchange, the total market capitalization of the American stock exchange also changes daily. The fluctuation is determined by how many shares are bought and sold daily. According to figures from Siblis Research, the total value of the American stock markets, consisting of the New York Stock Exchange, Nasdaq and OTC markets, was $ 49,107,685.7 million on March 31, 2021. This is based on data from thousands of listed American public companies.
The Major US Stock Indices
In order to keep the American stock market clear and to differentiate between the many sectors, the stock exchanges have introduced a number of American stock indices. This makes it clearer and easier to follow developments for all interested parties such as economists, fund managers, journalists, but also traders and investors. We highlight the three largest and most popular indices here. They each have their own focus on the American stock market.
Are you still not sure what a stock market index is? Read our article: What are stock market indices?
De S&P 500 Index
This index has the best reputation of the entire American stock market. It informs you about the value of the 500 largest listed companies on the New York Stock Exchange. View the S&P 500 companies here .
The NASDAQ 100
The Nasdaq 100 Index is linked to the Nasdaq Stock Exchange and measures the value of the 100 largest companies listed on this exchange. It is a mix of companies from different sectors, but it mainly includes technology companies. The financial sector, i.e. commercial banks and investment banks, is absent. The NASDAQ 100 is considered the best stock index for the American technology sector.
From Dow Jones 30
The Dow Jones 30 Index has been around since 1896 and has been tracking the development of the American stock market ever since. The number 30 represents the 30 largest listed companies in all types of industries, which are among the most dominant sectors of the American economy. View the Dow Jones companies here .
Best US Stocks - Popular US Stocks
How do you know which choice to make if you want to invest in American stocks in 2023? It is not easy to give a standard here.
The expectation for 2023 is that there may be some important macroeconomic and social changes in the US industry, which will also affect the US stocks. This also applies to new business trends and sector rotation. So you should delve into the stocks of different sectors of the US market. Below is an overview (in random order) of popular stocks in US markets.
| # | Company | Stock Exchange | Sector |
|---|
| 1 | Microsoft (MFST) | NASDAQ | Technology |
| 2 | Zoom (ZM) | NASDAQ | Technology |
| 3 | Salesforce (CRM) | NYSE | Technology |
| 4 | Activision Blizzard (ATVI) | NASDAQ | Gaming |
| 5 | NVIDIA Corp (NVDA) | NASDAQ | Gaming |
| 6 | Pfizer (PFE) | NYSE | biotechnology |
| 7 | Modern (MRNA) | NASDAQ | biotechnology |
| 8 | Berkshire Hathaway Inc. (BRK.A) | NASDAQ | Insurance |
| 9 | UnitedHealth (UNH) | NYSE | Insurance |
| 10 | eBay (EBAY) | NASDAQ | E-commerce & logistics |
| 11 | FedEx (FDX) | NYSE | E-commerce & logistics |
| 12 | Amazon (AMZN) | NASDAQ | E-commerce & logistics |
| 13 | META (Facebook) (META) | NASDAQ | Information technology |
| 14 | Google – Alphabet Inc A (GOOGL) | NASDAQ | Information technology |
| 15 | Apple (AAPL) | NASDAQ | Telecommunications |
| 16 | Tesla (TSLA) | NASDAQ | Automotive |
Tips for Finding the Best US Stocks 2022-2023
Even if you invest for the long term and therefore mainly focus on the bigger picture, it is good to take a good look at the graph. The right entry moment can yield extra returns. And that is a nice bonus.
Tip 1: Is there an increasing profit margin?
An important comparison between companies is made by looking at the ratio of profit to turnover. This is the profit margin. You can compare competitors from an industry in this way. You also look at the development of the profit margin in the past. You are looking for shares with a stable profit margin or a profit margin with an upward trend. You can indicate these as the best American shares for 2023.
Tip 2: Compare cash generation with expenses
Depending on how much risk you want to take, it is also good to investigate whether a company generates sufficient cash in the long term. Expenses should therefore not exceed sales income. Then it is possible that these companies will be among the best US stocks of 2023.
Tip 3: How does debt compare to growth?
It is important that a company does not have exceptionally high long-term debts. Certainly not when compared to turnover. Because debts with a long term naturally also have a long interest payment obligation. On the other hand, companies of the best American stocks may also have deliberately chosen this approach, the so-called strategic debt. This has a leverage effect on the growth of the company. Moreover, you must realize that high debt burdens are common in certain sectors.
Tip 4: How does the company position itself in the sector?
Are you investing in shares of a market leader and what is the position of the company in the sector? These questions are not only relevant for the position at the moment, but also for the future. This should be clear if the company is included in the list of best American shares.
Why choose to buy US stocks?
One of the most important reasons for Dutch investors to buy US-listed stocks is probably the return. If you compare the S&P500 index of Wall Street over the last decade with the return of the AEX over the same period, you get an American return of about 103%. The AEX yielded about 7.5%. But that is not the only motivation for investing in US stocks.
- The diversity of companies is greater on the American stock markets than among Dutch companies. The New York Stock Exchange has 2600 listings, while the NASDAQ has more than 3000. It is not without reason that both are the two largest stock exchanges in the world, if we look at market capitalization. To give an even better picture: the AEX, the Dutch stock exchange, has 25 companies listed.
- Another aspect is that large companies such as Facebook, Amazon, Apple and Google are listed in the US. If we compare that again with the AEX, we find only four large companies that together represent more than 50% of the index price. If the price of one of these four companies falls, that has a direct major impact on the stock exchange.
- It is not only wise to have a diversified stock portfolio for the potential profit aspect. It is also safer to spread your investments across various companies and sectors, but also in multiple countries. This allows you to create a buffer in the event that economic growth in a country like the Netherlands were to slow down. American stocks could then absorb the loss of return.
Buy US stocks in 5 steps
- Use our comparison table to make a good comparison between the online brokers that have access to the US stock exchanges and shares;
- Create an account online. To verify your identity, submit a copy of your passport or identity card with additional personal details;
- Transfer the desired amount via bank transfer or debit or credit card;
- Select the stocks you want to buy by scrolling through the list of prices or use the search bar in the app where you enter the name or symbol of the stock;
- By entering the number of shares you wish to purchase and confirming this transaction, the purchase of the shares is a fact.