Complete Guide to Investing in US Stocks: How Beginners Can Start Earning from Zero

Why Invest in U.S. Stocks?

In the global financial markets, the U.S. stock market is renowned for its large scale, high liquidity, and transparent system. With a daily trading volume exceeding 100 billion shares, this level of activity ensures the market is difficult to manipulate and provides a relatively fair investment environment.

Many multinational companies—whether Asian internet giants like Alibaba and JD.com or globally recognized brands like TSMC and Starbucks—choose to list in the United States. Why? Because the U.S. is the most open market for capital flow worldwide, offering the largest financing scale and the broadest investor base for companies.

For retail investors, investing in U.S. stocks has four core advantages:

Low Barrier to Entry — U.S. stocks can be purchased by as little as 1 share, with no “lot size” restrictions. For example, if Tesla’s stock price is $260, you only need $260 to get started. In contrast, Hong Kong stocks require a minimum purchase of 100 or 1,000 shares, and A-shares start at 100 shares, meaning you need more capital.

Extensive Selection — Over 8,000 companies are listed in the U.S., covering the entire industry chain including technology, healthcare, consumer, and energy sectors. Nasdaq hosts tech giants like Apple, Amazon, and Google, earning it the reputation as a cradle of innovation.

Flexible Trading System — Uses T+0 settlement, allowing stocks bought in the morning to be sold in the afternoon, unlike A-shares which require T+1. It also supports both long and short positions, adapting to different market conditions.

Relatively Low Costs — Trading fees for U.S. stocks are only about 0.5%-1% (electronic trading), far lower than other markets. Plus, U.S. stock investment gains are exempt from capital gains tax, making long-term holdings more profitable.

Basic Rules of U.S. Stock Trading

Before investing in U.S. stocks, you must understand how the U.S. stock market operates.

Trading Hours and Exchanges

The U.S. has three main exchanges: New York Stock Exchange (NYSE), Nasdaq, and American Stock Exchange (AMEX).

Regular Trading Hours (Eastern Time):

• Daylight Saving Time: 9:30 AM – 4:00 PM
• Standard Time: 10:30 AM – 5:00 PM
• Monday to Friday

Pre-market Trading (Early Trading):

• Daylight Saving Time: 4:00 AM – 9:30 AM
• Standard Time: 5:00 AM – 10:30 AM

After-hours Trading (Extended Hours):

• Daylight Saving Time: 4:00 PM – 8:00 PM
• Standard Time: 5:00 PM – 9:00 PM

Tip: Pre-market and after-hours trading have lower liquidity, wider bid-ask spreads, and higher risks.

Trading System and Settlement

• Trading System: T+0 (buy today, sell today)
• Settlement: T+2 (funds settle two business days after trade)
• Trading Currency: USD
• Price Limit: None, but circuit breakers exist (automatic trading halt during significant market declines)
• Fees: 1% for manual trades, 0.5%-1% for electronic trades

Be mindful of time zone differences: if you’re in Asia, market opening hours will be late at night. Short-term traders need to monitor markets frequently, while long-term investors are less affected.

Comparing Three Ways to Invest in U.S. Stocks

Depending on your capital, risk tolerance, and trading cycle, you can choose different investment methods.

Method 1: Direct Purchase of U.S. Stocks

This is the most traditional and straightforward way—buying actual shares to become a shareholder of the listed company.

Suitable for: Investors with stable funds seeking long-term gains

Advantages:

• T+0 system allows flexible response to market changes
• Very low fees (only broker commissions)
• No capital gains tax, increasing net returns
• Stock risk is relatively controllable

Disadvantages:

• Requires time to research individual stocks and industries
• Account opening process is relatively complex
• Picking wrong stocks can lead to concentrated risk

How to open an account and buy?

• Taiwan Investors: Use sub-brokerage services; domestic brokers accept your instructions and place orders with overseas brokers. Fees around 1%.

• Malaysia Investors: Platforms like Malacca Securities, M+ Global, Moomoo, Rakuten Trade are options. Fees range from $3.8 to $25. Be aware that dividends are subject to a 30% withholding tax.

• Mainland China Users: Trade via brokers like Futu NiuNiu, WeBull, etc.

Method 2: Investing in U.S. Stock ETFs

ETF stands for “Exchange-Traded Fund,” a basket of stocks. You can buy a single ETF to gain exposure to multiple companies, reducing individual stock risk.

The U.S. market offers a rich variety of ETFs: technology ETFs, healthcare ETFs, high-dividend ETFs, bond ETFs, etc.

Suitable for: Investors who don’t want to pick individual stocks and seek diversification

Advantages:

• Diversification reduces risk of betting on single companies
• Very low management fees (e.g., VOO at 0.04%, one-tenth of Taiwan ETFs)
• No need for frequent monitoring and research

Disadvantages:

• Returns are averaged, making it harder to achieve excess gains
• Requires understanding different ETF investment strategies
• Price spread risk, especially with high volatility within the first 30 minutes of trading

Where to buy U.S. stock ETFs?

Firstrade is a popular choice, offering zero-commission ETF trading since 2018.

Method 3: Contract for Difference (CFD) Trading

CFD is a financial derivative based on U.S. stock price movements. You do not hold actual shares but trade contracts based on price fluctuations.

Suitable for: Investors with limited funds but strong risk appetite, seeking short-term gains

Advantages:

• Lowest account opening threshold (possibly only $50–$100)
• High leverage, allowing small capital to control large positions
• T+0 system, enabling both long and short positions
• One account can trade multiple assets: U.S. stocks, forex, gold, cryptocurrencies

Disadvantages:

• High leverage risk; misoperation can lead to losses exceeding your capital
• Not suitable for beginners
• Requires strict risk management and stop-loss discipline

Note: CFDs are inherently high-risk products; only suitable for investors who fully understand the risks and have sufficient buffers.

Which Account Type Is Best for Beginners?

U.S. stock brokers typically offer two types of accounts, each with different features:

Cash Account

• Minimum deposit: about $500
• Trading permissions: Long only, no short selling
• Settlement cycle: T+3
• Suitable for: Complete beginners, aiming for long-term holding

Margin Account

• Minimum deposit: over $2,000
• Trading permissions: Long and short, with leverage
• Advantages: Fully utilize leverage to enhance returns
• Risks: Leverage is a double-edged sword; gains and losses are magnified

Notable U.S. Stock Investment Targets

Below are some U.S. companies with long-term investment value (for reference only; assess based on your financial situation and strategy):

Tech Giants

• Apple (AAPL): Leader in consumer electronics
• Microsoft (MSFT): Cloud computing and software ecosystem giant
• Amazon (AMZN): E-commerce and cloud services powerhouse
• NVIDIA (NVDA): Key beneficiary of AI chip boom

Healthcare

• Johnson & Johnson (JNJ): Global healthcare conglomerate operating in over 170 countries

Traditional Consumer

• Procter & Gamble (PG): One of the largest consumer goods companies
• Walmart (WMT): Global retail giant
• Starbucks (SBUX): International coffee chain

Emerging Economies

• Alibaba (BABA): Leader in China’s e-commerce and financial ecosystem

Three Steps for Beginners

Step 1: Register an Account Choose a suitable broker platform, prepare ID and proof of funds, fill out the online application. Review typically takes 1-3 business days.

Step 2: Deposit Funds Transfer USD via bank transfer, wire, etc. Ensure your funds meet the minimum requirements (cash account $500, margin account $2,000).

Step 3: Place Orders Log into the trading platform, search for stock codes, input purchase quantity, and place orders. U.S. stocks are traded on a T+0 basis; orders are executed immediately, and funds settle in T+2.

Key Advice for Beginners

Investing in U.S. stocks is not gambling but a rational judgment on corporate performance and market prospects. Warren Buffett’s success is not because he predicted accurately but because he accumulated rich practical experience during multiple financial crises, learning how to calmly respond in different market environments.

Three Golden Rules:

1. Learn the theory first, then practice — Understand trading rules and fundamental analysis before acting
2. Risk management always first — Especially when using leverage, strict stop-loss discipline is essential
3. Long-term compound interest beats short-term gains — Investors pursuing steady growth often come out ahead

The road to U.S. stock investing requires patience and continuous learning. Don’t seek quick profits; treat every trade as a learning opportunity to steadily advance in the capital markets.