How to Start Investing in the US Stock Market

1. What “US vs global” actually means

When you choose an equity fund, you’re really choosing which set of companies you want to own. “US” and “global” are just labels for which markets are included.

Typical building blocks

• US stock fund: owns companies listed in the United States only (often an S&P 500 or total US market index).
• Global ex-US fund: owns stocks from the rest of the world, but excludes the US.
• All-world fund: owns both US and non-US stocks in a single ETF, usually by market size.

All of these can be bought as ETFs through a broker that lets you access US or global markets. The real question is how much of your long-term portfolio you want in the US vs everywhere else.

2. Why the US stock market is such a big deal

You will see a huge amount of attention on US stocks for a few simple reasons:

• The US market is roughly half of global stock market value, depending on the year.
• Many of the world’s largest companies (Apple, Microsoft, etc.) are US-listed.
• US markets are deep, liquid, and heavily studied.

For a global investor, ignoring the US entirely usually doesn’t make sense. The question is whether you should be US-heavy or closer to a world-wide mix.

3. Why global diversification still matters

Even if the US is large and important, it is still just one country with its own currency, policies, and risks.

• Other regions (Europe, Asia, emerging markets) can lead for long stretches of time.
• Different countries have different sector mixes, regulations, and demographics.
• Political or regulatory shocks can hit one country harder than others.

Holding global stocks is a way to avoid betting your entire future on one country, even if that country is large and historically successful.

On QuantRoutine, you can see how diversification changes risk in our Diversification That Helps study.

4. Three simple starting options

You do not need a complex mix of niche country funds. For most beginners, these three frameworks are enough:

1. US-only: One US stock index fund (e.g., S&P 500 or total US market).
2. US + global ex-US: One US fund plus one “rest of world” fund.
3. All-world fund: A single ETF that holds US and non-US stocks automatically.

The decision is not permanent. You can adjust the balance over time as your situation and preferences change.

5. Key factors for a non-US investor

As someone investing from outside the US, a few extra details matter:

• Where you live and spend: if you earn and spend mostly in one currency (e.g., EUR), owning only US stocks adds more currency swings than a global mix.
• Job risk: if your job or business is already heavily tied to one country, concentrating your investments there as well increases total risk.
• Tax rules: some countries treat foreign dividends or US-domiciled funds differently. You must check local rules and treaties.
• Product access: some brokers restrict which US-listed ETFs you can buy; UCITS or other regional variants may be the main option.

None of this tells you “US is good” or “US is bad.” It just affects how much concentration you are comfortable with.

6. Example mixes: how US-heavy do you want to be?

Below are rough, hypothetical examples to illustrate the idea. These are not recommendations, just starting points to think about.

• 100% US stocks: simple to implement, very US-focused. You benefit if the US keeps leading; you suffer more if it lags.
• 70% US / 30% global ex-US: still US-tilted, but with meaningful diversification.
• Global market weight (e.g., all-world ETF): roughly 50–60% US, the rest split across other regions.

In practice, many long-term investors end up somewhere between “US-only” and “global market weight,” depending on how much home bias they accept.

7. Currency risk and behaviour matter more than fine-tuning

From a non-US perspective, every foreign stock fund adds currency risk. The value in your home currency will move both with stock prices and with exchange rates.

In the long run, for most long-term investors:

• A reasonable global mix is usually less risky than an extreme bet on one country.
• Trying to forecast currency moves year-by-year is rarely useful.
• Your behaviour (sticking with the plan through volatility) usually matters more than exactly 60% vs 70% US.

8. Rebalancing between US and global holdings

If you hold more than one fund (for example, a US fund plus a global ex-US fund), your mix will drift over time as markets move.

A simple approach:

• Pick a target mix, such as 70% US / 30% global ex-US.
• Once a year, check if the actual mix is far from target (for example, more than 5–10 percentage points off).
• Use new contributions, or a small rebalance trade, to nudge it back.

We show how basic rebalancing works in our Rebalancing: Once/Year vs Never study.

9. Common mistakes when choosing US vs global

• Switching between US-only and global every time headlines change.
• Owning multiple overlapping funds that all hold the same big US stocks, while thinking you are “diversified.”
• Ignoring taxes or product availability in your own country.
• Using short-term performance (last 3–5 years) to decide which region is “better”.
• Leaving money in cash for years because the decision feels overwhelming.

10. One-page checklist

You can use this checklist to make a simple, written decision:

• I understand the difference between US-only, US + global ex-US, and all-world funds.
• I know roughly how much of my portfolio I want in US vs non-US stocks.
• I checked how foreign funds and dividends are taxed in my country.
• I chose a specific ETF (or two) that match my target mix.
• I have a simple rule for rebalancing (for example, once a year if far from target).
• I accept that no country will lead every decade; I will not chase recent winners.

The goal is not to find a perfect mix. It is to pick a reasonable global exposure you can live with for many years, then focus on your savings rate and time in the market.