Guide to Investing in US Stocks from Vietnam: From Theory to Practice

Why Should You Buy U.S. Stocks?

The U.S. stock market is the largest in the world, with over 6,300 listed companies on NYSE and Nasdaq. It is home to giant technology corporations such as Apple, Amazon, Google, and Meta.

Main reasons to consider investing in U.S. stocks:

• Diverse companies: Not limited to sectors like in Vietnam, but offering access to the entire spectrum from technology, finance, healthcare to energy
• High returns: The S&P 500 index has increased over 39% since 2018, Nasdaq surged the most at 64% thanks to the boom in tech stocks
• Global risk reduction: Owning foreign stocks helps protect your portfolio when the domestic economy faces difficulties
• Easy access: Currently, many derivative tools allow retail investors to participate in this market

Two Main Tools for Buying U.S. Stocks

1. ETF Index Funds

ETF (Exchange Traded Fund) are funds that track stock indices, combining features of investment funds with the ability to trade like stocks on major exchanges.

Advantages of ETFs:

• Diversify your portfolio at low cost
• No need to understand each stock in detail
• Reduce risk by investing in a broad stock basket instead of individual picks
• Suitable for long-term investors

Famous ETFs tracking the S&P 500 include: Vanguard S&P 500 ETF (VOO), SPDR S&P 500 ETF (SPY), iShares Core S&P 500 ETF (IVV).

2. CFD Contracts for Difference

CFDs allow trading individual stocks without owning them. You invest in the price difference, not the actual shares.

Advantages of CFDs:

• More flexible than ETFs as you can profit from both rising and falling prices
• Use leverage to amplify profits (but also amplify losses)
• Access the entire global market from a single platform
• Can short sell and trade outside regular hours

Warning: CFDs are high-risk instruments, suitable only for investors who can tolerate capital loss and have trading experience.

Top 10 U.S. Stocks to Consider

Note: P/E ratios fluctuate over time; information is for reference only.

Understanding the Main Stock Exchanges

NYSE - New York Stock Exchange

Founded in 1792, NYSE is the oldest stock exchange in the U.S. Major and longstanding American companies are listed here, along with many foreign firms complying with SEC rules.

• Market capitalization in 2022: approximately $24.6 trillion
• Trading volume: about 5 billion shares daily
• Trading hours: Monday-Friday, 9:30 AM - 4:00 PM

NASDAQ - Electronic Stock Exchange

Started in 1971, NASDAQ is the world’s first electronic stock exchange, with the second-largest market capitalization.

• Listing requirements are less strict than NYSE
• Focuses on new technology companies
• Composition: many small-cap stocks and startups

Key U.S. Stock Indices to Know

S&P 500 - Market Barometer

Comprising 500 top companies, representing about 80% of total market capitalization. The S&P 500 is weighted by market cap, reflecting overall U.S. economic trends.

If these 500 companies decline by 10%, the index also drops 10%, making it easy for investors to gauge the entire market.

Dow Jones - Blue-Chip Index

DJIA includes 30 large, influential companies, accounting for about a quarter of the total U.S. stock market value. Unlike the S&P 500, Dow is price-weighted, so higher-priced stocks have more influence.

Dow is known for stable companies that pay regular dividends but does not represent small-cap or tech stocks.

NASDAQ Composite - Tech Indicator

An index weighted by market cap of all stocks traded on NASDAQ, mainly technology but also including financials, insurance, transportation.

Because it includes many small speculative companies, NASDAQ reflects the performance of the tech sector and investor attitudes toward high-risk stocks.

Preparation Steps Before Buying U.S. Stocks

1. Choose a Reputable Trading Platform

Your broker plays a decisive role in your profits. Select platforms that:

• Are regulated by international securities authorities
• Have transparent trading fees
• Support customer service in Vietnamese

2. Equip Yourself with Full Knowledge

• Understand the differences between stocks, ETFs, CFDs
• Learn how to read financial reports
• Study technical and fundamental analysis
• Use demo accounts to practice before real trading

3. Develop a Strict Financial Plan

• Invest only what you can afford to lose
• Start with small capital if inexperienced
• Use leverage cautiously — it’s a double-edged sword
• Always have a stop-loss strategy before opening positions

Steps to Execute U.S. Stock Trading

Step 1: Choose Your Tool

Decide between ETF (safe, long-term) or CFD (high-risk, high-reward).

Step 2: Analyze Opportunities

• Use technical analysis tools
• Follow economic calendars and company news
• Identify suitable entry points

Step 3: Prepare Capital

• Deposit margin into your trading account
• Determine position size and leverage ratio
• Avoid overtrading initially

Step 4: Place Orders

• Buy orders when expecting price increases
• Sell or short orders when expecting declines
• Clearly define take-profit and stop-loss levels

Step 5: Manage Your Positions

• Monitor market movements regularly
• Take profits when targets are reached
• Cut losses immediately to limit damage
• Record each trade for learning

Conclusion: Start Your Investment Journey

The U.S. stock market offers endless opportunities for Vietnamese investors to participate in the global economy. However, success is not just about luck.

To buy U.S. stocks effectively, you need:

• Full understanding of how the market works
• Psychological resilience against FOMO (fear of missing out) and greed
• Strict risk management
• Patience to wait for the right opportunities

If you are a long-term investor aiming to accumulate assets, choose ETFs. If you have trading experience and accept higher risks, CFDs may offer greater profits.

Regardless of your choice, research thoroughly before deciding. The U.S. stock market is waiting for you!