In the spirit of July 4th, which is coming up, this series of videos will continue to explore why you should be proud to be an American investor. The three areas I’d like to discuss today are low costs, global exposure, and liquidity.
Low costs: In the US, The fees to buy and sell investments are negligible. Some brokerage firms will waive these transaction costs altogether. Furthermore, fees on mutual funds and ETFs are also miniscule if utilizing passive investment strategies. This is not true in other countries, where the costs to conduct business can be relatively astronomical.
Global exposure: In the US, Out of the comfort of your home you have the flexibility to choose from a whole host of investment products. You are not limited to a specific firm, product type, or investment strategy and can even easily, and cost effectively, access investments globally. If you want to invest in Japanese and South African stocks or Latin American bonds, all this can be done with ease from your laptop with a few pushes of a button.
Liquidity: Unlike many markets around the world, the U.S. stock market is incredibly liquid. I can buy a stock in the morning and track its exact value throughout the day. I can also sell a stock and have my cash back in my checking account within a few business days. Many markets around the world are far less liquid and this process is far more cumbersome.