US markets had already demonstrated significant outperformance leading up to the crisis - equity markets outperforming global markets by a staggering 270% since 2010, as shown in the chart below.
Household names in the tech sector, in particular, delivered on product innovation leading to consistent market share and profit gains. This performance was undeterred by the pandemic with our shift to a greater reliance on technology bolstering these trends. Apple’s revenues and share price both grew by over 30% in 2021 while Google’s Alphabet’s shares rose by over 60% with revenue growing more than 40% over the same period. US stock markets more broadly have also benefitted from generous shareholder remuneration policies in recent years with markets reaching new record highs in 2021 as a result.
Reducing portfolio risk through diversification
The start of 2022 has brought new challenges and uncertainty. Rising inflation, Russia’s invasion of Ukraine and China’s continued regulatory crackdowns have investors naturally questioning their outlooks for the year ahead. It’s likely many will choose to stick with companies they are familiar with and have confidence holding long term. Naturally, these usually end up being companies on home turf. However, a well-diversified portfolio, which will have exposure across different asset classes, sectors and markets will be more resilient to market swings. This can help cushion portfolios against losses and improve returns over time. As retail investors become more sophisticated and look beyond their home markets, interest in international stock markets as a means of portfolio diversification and risk mitigation is likely to increase. In Singapore, where traditional investors typically favour home securities, Google searches for “US stocks” began to see an uptick in 2021 compared to 2020.
The future remains bright for retail investors
Traditional investment methods may still be relevant for successful portfolio outcomes but with real time data, access to global markets, in depth analysis and low commissions, retail investors now have fast and efficient ways to trade that were previously only available to industry professionals. So whilst there are clouds over the near term economic outlook, the forecast for a new generation of individual investors remains bright.
Tiger Brokers (Singapore), the Xiaomi-backed online trading platform, has launched its inaugural lifetime zero commissions campaign for unlimited trades on US stocks for users. The Lifetime Zero Commissions for US Securities rides on investors’ demand for access to US financial markets. Approximately 87% of Tiger Broker’s account holders currently trade US securities, and they have been seeing increased investor interest in US markets amid increased volatility globally. Through this campaign, Tiger Brokers hopes to lower the barriers to investing and make it easier and more efficient for Singapore investors to access global markets through their platform. To learn more about the zero commissions campaign or open an account, click here: https://www.tigerbrokers.com.sg/market/zero_commissions?lang=en_US&utm_source=article&utm_medium=PR-advertorial&utm_campaign=zero-comms&utm_term=thefinance
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