US shares?

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8th Jun '21 by Kev M

10 comments 721 reads

I see a lot of users portfolio's and Stocko's recommendations are oriented towards the UK markets. Do Stockopedia users actually invest in US or other shares? I know it's an extra cost for different regions and I purchased the US region on top of the UK region. That gave me far more choices compared to UK only.

So I'm wondering if other users have done this and how much success they have with US stocks compared to UK shares?
What are the pros and cons etc? Does a mixture of different countries truly diversify your portfolio?
Currently using IG as they are commission free (3 trades in the previous month) although I do imagine they make a little when you buy/sell with the fx conversion.

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About the Author

Kev M

Premium Member

10 comments

Metatron

8th Jun '21

Plenty of US shares have business models or are linked to themes one cannot invest on the UK market .US shares tend to be far more liquid.Interactive Brokers or Spreadbetting are the best way to trade in US shares.I hold Genco Shipping, Kratos and Unifi

William K

8th Jun '21

I do most of my investing and trading in the US market by means of spread bets via IG. The advantages are low spreads, no tax, no stamp duty, no commission and no FX charge. The US market is highly liquid so you can get in and out of trades quickly and cheaply. With regard to markets outside the US and the UK, I think that betting on the main indexes is a cheap and relatively safe way of diversifying one's portfolio. (Indexes are basically ultra cheap tracker funds). IG have good range of indexes - the futures if available are particularly good value.

Rusty2

8th Jun '21

Believe £IG charge a 0.5% forex fee on ISA and share dealing accounts, so not completely free.
I do buy some US stocks but I don't subscribe to the Stockopedia US region. In the past it has not performed as well as UK and Euro regions. I did have the Euro region for over a year but because of fees and availability I did not buy that many and IG don't cover many countries in Europe.

shamusj

8th Jun '21

I've found US shares tech shares to be a great buy in the last few weeks as I believe the rotation to quality in the market has been drastically overdone. Many great long term asymmetric bets are drastically oversold in the long view.

The US is just a bigger market with more liquidity, and more frequent company reporting periods. This mean that you get more transparency, but with a risk that it can be overly focussed on the short term, but much of that interpretation is down to the individual's analysis.

I'd recommend Interactive Brokers as a broker. I use them mostly for my US exposure. IG share dealing for US stocks is expensive as the 0.5% forex is applied automatically on buying and selling (forced conversion back to GBP) so be wary of chopping in and out of positions too frequently. They offer an alternative flat rate but you have to call the helpdesk to activate it. For UK and ISA deals IG are very good value, especially as their platform is better than any other broker I've used in my view.

I also use interactive investor and am happy with them.

Spread bets are also great as others have mentioned, you just have to ensure that you educate yourself on the benefits and risk of leverage, and the financing costs. Spread bets being tax free in the UK is a great perk. There is also no exchange rate risk when using spread bets to trading us shares (and it is likely to be trading rather than long terms holds with spread bets).

Bonitabeach

8th Jun '21

Hello Kev M,

The US market for me is far more rewarding and diverse.

I have been in heavily since 2012, 5 of my top 10 holdings are US based and all have been held since that year: my watchlist is populated by US stocks, mainly tech. I do not regard any of my US holdings as overvalued and admire the drive and ambition to be found there. BX: Blackstone aiming to double assets under management in a 5 year time frame, that's what makes me happy to hold (the dividends help as well).

Such drive and ambition, linked to resources, reality and capability, is, sadly, a rare commodity in the UK.

I have invested in some duds in the US as well; but they have been in old economy areas such as bricks & mortar retail, which I have learned to avoid. I focus on asset managers and tech, mainly hardware such as Vicor which is low tech enough for me to understand the business case and model. Investment in Blockchain, AI and Unicorns? If there is a good opportunity I leave that to the experts at Blackstone et. al. - they are in way before any IPO.

Good luck and happy hunting - mind those iniquitious Forex charges.

Bonitabeach

abtan

8th Jun '21

Hi Kev

I've signed up to US markets on Stockopedia too and I am a fan.

Most of my portfolio is still UK-based, something which I think is a result of home bias, but I've certainly found enough gems in the US to justify the additional subscription cost and not worry about FX charges or movements.

The big wins in no particular order have been:

Align (no position today),
Medpace (I hold),
Biogen (I hold),
Stitch Fix (I hold).

The former 3 were all discovered using Stockopedia and all were/are nicely profitable.

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These days I'm finding more interesting companies listed in the US than elsewhere.
For reference, 2 high up on my watch list right now - both US listed - are Copart and JOANN.

I found both through Stockopedia.

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I really think it would be great if there was more dedicated US- and European-based content on this site, as there is of course a pretty big investing universe beyond the UK's shores.

So Ed and the team, if you're listening...

timarr

9th Jun '21

Hi Kev

It's well worth listening to this interview with Richard De Lisle, who runs a small cap US fund:

https://www.stockopedia.com/co...

In fact, it's worth spending some time on the De Lisle website, there's some interesting stuff there.

But broadly, the US market is a lot bigger than the UK, the regulation is tighter - reporting, for instance, is much more standardised - and the range of stocks on offer is much more varied. The metrics which work in the UK also work in the US but it's always important to remember that the US is a foreign country, and they don't always think like us. This is particularly important in analysing smaller, domestic stocks.

Of course there are costs but as my style is to buy and hold for a considerable time these simply get lost in the gains (well, hopefully!). If you're more short-term then you'll need to spend time researching costs, especially FX fees.

For the longest time I've only invested in large cap US stocks - Apple, Alphabet, Paypal, Spotify Facebook, Walt Disney, Berkshire Hathaway, which has been a very pleasurable and profitable experience. However, the Biden administration's infrastructure plans on top of a post-CV-19 recovery have got me interested in smaller stocks - and once you get out of the super stock component of the market there is a lot of value on offer.

timarr

Kev M

9th Jun '21

Many thanks for your replies. I@ve got to say I was a bit transfixed with UK FTSE 100, 250 etc until I purchased the US region on stockopedia and saw the huge difference. My 2021/22 ISA is now about 75% US stocks & 25% UK shares.
Currently looking at Spread betting which I do for UK shares and trying to get to know certain US stocks as some of them do swing wildly.

Indie

9th Jun '21

Hi abtan, from what I’ve seen, the $SFIX market is growing rapidly in the UK by word of mouth. As a fairly new customer, I’ve been impressed by how they operate. If they dual-listed on the LSE (or if I get myself set up for US shares), I would buy.

Kev M

9th Jun '21

Nice post and totally agree. I did wonder why all the stock pitches were LON when there is a big wide world out there and my Stockopedia screen multiplied tenfold when I purchased the US region. And I would never have thought about investing in half of the stocks I hold now in this years ISA if I hadn't of purchased the US region. Only problem I have now is I seem to spend all my time in Stockopedia browsing US stocks.

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US shares?

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Kev M

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