GONE are the days when investing in the United States was a pipe dream for
Malaysians due to things like costs, access to information, and convenience.
Known for its efforts of breaking barriers, Rakuten Trade recently announced that it had successfully done so again by being the first to offer fractional US share trading.
Now, investors can now buy Tesla (Nasdaq: TSLA) for US$1.68 (0.01 unit) instead of US$168.010* (whole unit) or Apple (Nasdaq: AAPL) for US$1.72 instead of US$172.56*.
This begs the question: Are US markets really that appealing?
According to Vincent Lau, Rakuten Trade’s head of equity sales and licensed analyst by Securities Commission Malaysia, “With the US rate hike likely to be over and peak inflation past us, the debt ceiling will weigh on the US market sentiments.
“Nevertheless, recent US corporate earnings results have been surprisingly good with almost 80% beating market expectations. We expect the market to remain resilient with upward bias.”
Here’s four reasons to trade in New York Stock Exchange (NYSE)/Nasdaq via Rakuten Trade:
> Free access
When other brokers charge for information, it’s now easy to access free trading ideas and education. For example, Rakuten Trade provides free access to information through its collaboration with reputable sources like Motley Fools and their in-house research team.
Trading ideas are shared in bite-sized reports without jargon. They also offer free access to real time market prices and trading ideas via their Telegram Channel and RakuRanger Facebook Community.
> Convenience
Despite the time difference, most trading apps allow you to manage investments on the go, making it easy to stay on top of their portfolio or place orders, even when they’re about to go to bed.
Plus, if you trade via a local broker, there is no need for fund transfers into global and overseas digital broker accounts.
At Rakuten Trade, only a cash upfront account is needed to trade three markets (Bursa Malaysia, NYSE/Nasdaq and Hong Kong Exchange).
> Cost efficiency
Trading US stocks can be expensive especially given the weakened ringgit vs USD.
So, save on costs by choosing brokers offering lower rates because in addition to buying the stock, you’ll need to pay other costs such as a brokerage and exchange fees. That way the high fees don’t eat into your profits.
Recently, Rakuten Trade revised their brokerage rates to become the lowest in town at RM1 or US$1.88 to RM100 or US$25.
Complement this with trading in smaller sizes with Rakuten Trade, the only Malaysian broker 0.01 (Buy) and 0.0001 (Sell) services. This cost-efficient approach allows exposure to specific familiar stocks even with limited capital, minimising risk.
Combine it with dollar cost averaging so over time you grow a healthy nest egg .
>Diversification
Building a solid portfolio involves diversification across markets, stocks, and sectors to avoid risks of overexposure aka “putting all your eggs into one basket”.
Trading in smaller units helps manage risk and potentially enhance returns, particularly in volatile markets or with high-priced stocks. That way if one market dips, your financial burden is minimal.
Conclusion
Investing in the US market is an excellent investment idea for beginners looking to grow their wealth over the long term.
By following a disciplined investment strategy, staying informed, and starting small, beginners can potentially achieve their investment goals to secure a financially stable future.
Hooi Mun Keong is a digital educator at Rakuten Trade and has an extensive background in dealing in equities. He holds a Capital Market Service Representative License, dealing in Securities and Derivatives from the Securities Commission Malaysia.
* Price taken at closing on May 12.
