American Stock Exchange: how does it work and how to invest?
Did you know that it is possible to invest in the American Stock Exchange even while in Brazil?
Announcements
If you're an investor and want to protect your investments, you need to learn more about the American stock market.
This way, you can have direct access to the shares of the largest companies in the world, without having to leave the country.
This means that investing in the American stock market is a way to diversify your portfolio and, most importantly, have the possibility of earning by investing in dollars.
The problem is that this market is still little explored by Brazilians, as there is little information on the subject and even experienced investors believe that this market is very difficult.
To help you, we'll show you which American stock exchanges are available, how to invest, and the best stockbroker options.
Read on to find out more.
What are the American stock exchanges?
In Brazil, there is only one stock exchange: B3.
In the United States, there are two major stock exchanges, known by the abbreviations NYSE and NASDAQ.
Learn more about each of them:
NYSE (New York Stock Exchange)
The NYSE is considered the largest stock exchange in the world.
It was created in 1792 and is located on Manhattan Island, New York.
Since its founding in the 17th century, it has been responsible for trading the shares of some of the largest publicly traded companies in history.
Its market value, which is the value of companies listed on the NYSE, exceeds US$1.4 trillion.
NASDAQ (National Association of Securities Dealers Automated Quotations)
NASDAQ is the second largest stock exchange in the United States.
It was created in 1971.
The difference between the NYSE and NASDAQ is that NASDAQ is home to the largest American technology organizations, such as Microsoft, PayPal, and Facebook, for example.
Nasdaq has about 3,200 stocks traded and about 2.8 trillion daily transactions.
How to invest in the American stock market?
To invest in the American stock market, you will need to open an account with a brokerage firm authorized to carry out operations abroad.
In the next topics, we will explain the step by step:
1. Choose a broker
As we said, the first step is to choose a broker.
In the United States, there are two types: direct and intermediate.
Direct brokers serve clients directly, registering trading orders without any intermediaries.
Intermediary brokers, on the other hand, mediate the transaction between the investor and a major broker.
For those in Brazil, the best option is direct brokerages, as the opening process is simpler.
2. Complete the account opening process through the website
Most brokers offer the option to open an account online.
The process is very practical: to begin, the investor fills out a registration form with their main personal details.
You may also have to fill out a questionnaire to understand what it is. your investor profile.
3. Prepare your documents
It's important to know that American brokers will ask for documents such as your income tax return, passport, and proof of residence.
Furthermore, it is necessary complete the W-8BEN form, which proves that you do not live in the United States, but want to invest there.
4. Transfer the money to the brokerage account
Have you already opened your account and been accepted by the broker? Then it's time to transfer your money!
The transaction is made through banks and exchange agencies authorized by the BC.
The remittance is made in the international currency, that is, dollars. You'll likely have to pay the commercial rate plus an additional fee.
Learn how to send money to brokers outside Brazil.
Brokers to invest in the American stock market from Brazil
To help you with this process, check out the information we've put together about the best brokers for investing in the American stock market:
Avenue Brokerage
Corretora Avenue is a Brazilian brokerage firm that operates on the American stock exchange.
Its objective has always been to democratize access to the international market here in the country.
Avenue's focus is on the US stock market.
It offers several plans, including zero brokerage fees.
Main advantages:
• Website in Portuguese
• No minimum investment
• Free brokerage plan
Passfolio
The Passfolio brokerage was founded in 2018 in San Francisco, USA.
It is a startup that provides global access to the US stock market.
It currently has 170 countries in its catalog.
One of the highlights of Passfolio is that it works with different currencies, even Bitcoin.
Main advantages:
• Website in Portuguese
• Simple registration
• Negotiations from US$ 1
TD Ameritrade Brokerage
TD Ameritrade is considered one of the most traditional brokers for investing abroad.
The company has more than 10 million customers, located in several countries.
With zero brokerage fees for stocks in the United States and Canada, TD Ameritrade stands out among the leading platforms for foreign investors interested in the American stock market.
Main advantages:
• 24-hour support on social media
• No brokerage fees
• No minimum deposit required
What are the risks of investing in the American stock market?
Investing in the American stock market can be more advantageous.
However, it is important to remember that any investment, especially in variable income, presents risks.
For this reason, you must create an investment strategy and be very detailed when choosing assets.
One of the main points of attention is volatility, as price drops can affect the profitability of investments.
Furthermore, the costs involved must be taken into account.
Fees, brokerage fees (which are not charged by some brokers) and taxes can also affect profitability.
Therefore, before you start investing, research and study all the amounts you will need to spend to start operating in the American market.
Conclusion
We hope this article has helped you better understand investing abroad!
To minimize risks and increase profits, it's important to follow trends and, above all, study the investment market!
