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Wall Street

Should you buy U.S. Stocks if you don’t know anything about them?

Should you buy U.S. Stocks if you don’t know anything about them?

This is something I hear all too often from investors, but in reality, it couldn’t be further from the truth. I suspect that your day went something like this:

  • You woke up lying on your Sealy mattress
  • Turned off the alarm that you purchased on Amazon
  • Ate a bowl of Kellogg’s cornflakes for breakfast
  • Wore your Nike runners for a quick jog, monitoring your Garmin watch
  • Drove your Ford car to work
  • Grabbed a coffee from Starbucks or Krispy Kreme doughnuts
  • Used your Intel-based computer all day checking Facebook more than working
  • Searched Google whilst researching your project
  • Prepared your presentation using Microsoft Office
  • Made some calls to friends on your Apple iPhone
  • Grabbed some quick McDonalds for lunch
  • Found a bargain on eBay and paid for it using PayPal
  • Went to the movies after work to see a Disney film, while scoffing down some Ben and Jerry’s ice cream

 

In reality, you actually use a lot of U.S. products every day, made by companies that predominately have an easy to understand business model. They make and sell products and the more they sell, the more profits they make. I would argue that you understand more about companies like Apple than you do about the Commonwealth Bank. Although we think we know what the bank does, do you really know how they make annual profits of $8 billion? If the RBA increases interest rates, does that have negative or positive implications for the bank? If Apple releases a new phone with cool new features, what do you think this will do for their profits?

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This is an excerpt from the book ‘An Australian’s Guide To Investing In U.S. Stocks‘ by Matthew Jones.

Click here to download the FREE eBook

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