Investments In FAANGM Risen By 33% At Over $40 Mn In 2023: Which US Stock Is Best To Invest Now?

The six most well-known tech firms listed on Wall Street are Facebook, Apple, Amazon, Netflix, Google, and Microsoft, or FAANGM stocks for short. As of now, FAANGM's aggregate market value surpasses $3 trillion. Almost 10% of the $46 trillion market capitalization of the US stock market is made up of it.

This number is the total market capitalization of all publicly traded US-based companies that are listed on the New York Stock Exchange, Nasdaq Stock Market, or OTCQX U.S. Market. With 42.9% of the $106.0 trillion global equity market valuation in 2023-or $45.5 trillion, according to SIFMA-the US stock markets are the largest in the world.

On the economy:

Economic data highlighted ongoing trends of above-target but slowing inflation alongside somewhat less confident yet still spending consumers. The Bureau of Labor Statistics reported a 0.4% rise in overall PCE (personal consumption expenditure) for September. Personal spending also grew by a more-than-anticipated 0.7% in September. Earlier, a robust 4.9% annual GDP growth rate for Q3 was reported.

On earnings season:

Earnings season is roughly 40% complete prior to 30th October. About 78% of S&P 500 companies reporting so far have beat earnings forecasts, while 47% have exceeded revenue estimates.

Platform data:

The year-on-year data on the Vested platform reflects a growing engagement among investors. Active accounts on the platform have seen a 17% uptick, new deposits surged by 32%, and investments in the top 10 stocks, including tech giants like Facebook, Microsoft, Tesla, and others, leapt by 72%. This data suggests a rising trust and participation in global investment avenues among Indian investors.

Additionally, the trading volume over the last 12 months has significantly increased, going from $220 million in 2022 (the entire year) to $320 million in 2023 (till October). This pattern suggests a burgeoning trust and participation in global investment avenues among Indian investors.

Vested's offering, 'Vests', a suite of pre-defined portfolios, is also witnessing a close to an 18% increase in new investments. This shows that people like the idea of having a helping hand in building their US portfolio.

Why To Invest In US Stocks?

Viram Shah, CEO of Vested Finance, remarks, "For Indian investors, the upbeat earnings narrative from the US market presents a silver lining, as it signifies a resilient global economy, which, in turn, could potentially impact both their India and US portfolios positively. Looking ahead, Volatility in certain FAANGM stocks and geopolitical tensions could pose challenges, emphasizing the need for a balanced and well-diversified investment strategy.

For investors from India, there are three important things to keep in mind as they build their US portfolios:

It is important to have a diversified portfolio and not to put all your eggs in one basket. Geographic diversification is an important piece of diversification that's missing in the majority of Indian investors' portfolios and investing globally via the US markets provides that global diversification.

If you spend time researching individual companies, then look for solid businesses that are able to generate profits without taking on debt. ETFs are the best option to build one's portfolio.

The US markets are a great way to get global exposure by investing in global companies as well as ETFs that invest in particular countries

Additional trends on Vested:

Investments in AI and Chip Companies

Investors are showing a growing interest in tech stocks this year, with a special focus on companies specializing in artificial intelligence and computer chips.

Investments in these sectors have jumped 46% in 2023 to a total of ~$10 million compared to last year. This trend includes popular AI stocks like Nvidia, TSMC, UiPath, and ASML.

Investments in big-tech companies [FAANGM]

Big Tech companies continue to increase in popularity, often abbreviated as FAANGM (Facebook, Apple, Amazon, Netflix, Google, and Microsoft).

Investments here have risen by 33% in 2023 standing at over $40 million compared to 2022.

Tesla drives interest among new and active investors

Tesla continues to be a favourite for both seasoned and new investors.

About 10% of active investment accounts on Vested hold Tesla shares.

Even more interesting is that 12% of new investors in the US markets from India start by buying Tesla on Vested.

ETFs are catching up with the momentum but some stand out

Although investments in Exchange-Traded Funds (ETFs) are growing at a slower pace compared to individual stocks, certain ETFs are bucking the trend. QQQM and SQQQ, for instance, have seen a whopping 300% increase in investments this year.

In summary, 2023 is a strong year for tech investments, with AI and chip stocks leading the charge and Tesla continuing to be a popular choice.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.