Comprehensive Guide to Buying Foreign Stocks: Entering the U.S. Stock Market in 2025

The US stock market ranks first in the world in terms of size, with over 6,300 listed companies from both domestic and international firms. With the largest total market capitalization globally, this market hosts leading conglomerates with strong growth drivers such as Apple, Amazon, and attracts millions of investors from around the world.

Those planning to buy foreign stocks, especially US stocks, will find a multi-dimensional investment ecosystem with many profit opportunities. This article provides an overview of how to approach and participate in this market from Vietnam.

Why Should You Buy Foreign Stocks, Especially US Stocks?

Richness in Company Selection

The fundamental advantage of buying foreign stocks is access to a larger variety of multi-sector companies compared to the domestic market. The NYSE and NASDAQ are the world’s largest trading centers by market capitalization, offering the best profit opportunities. Here, you can hold shares of global tech giants like Facebook, Google, Amazon, or Apple.

Impressive Investment Returns

Numbers clearly show this: the S&P 500 index has increased over 39% from May 2018 to now, while the VNIndex in Vietnam is nearly 9% in the red. Moreover, the Nasdaq index has surged over 64%, thanks to the explosive growth of tech stocks.

Risk Reduction Through Diversification

Owning stocks from foreign markets helps you not to depend entirely on the domestic economy. Especially in the current context where interest rates are rising and the VND is under pressure of depreciation, diversifying your portfolio into other markets is a reasonable capital protection strategy.

Top Notable US Stocks to Watch

Below is a list of US stocks that many new investors are interested in:

Note: These indices are constantly changing in real-time. The information above is for reference only at the time of writing.

Ways to Buy Foreign Stocks from Vietnam

To directly own stocks on NYSE or NASDAQ, you need a trading account with a US brokerage firm. However, a barrier is the requirement of US citizenship. Therefore, individual investors from abroad often use derivative tools to buy foreign stocks.

ETF Funds - Long-term Choice

Exchange Traded Funds (ETF) operate like a basket of securities traded like regular stocks. They mimic the fluctuations of a benchmark index such as the S&P 500.

Advantages of ETFs:

• Easy to create a diversified portfolio with reasonable costs
• No need for in-depth research on individual stocks
• Limits market manipulation impact by holding a basket of stocks

Some popular ETFs tracking US indices include: Vanguard S&P 500 ETF (VOO), SPDR S&P 500 ETF (SPY), iShares Core S&P 500 ETF (IVV).

CFD Contracts - More Flexible

CFDs allow you to trade individual stocks without following fund structures. Instead of owning actual shares, you profit from price differences of fluctuations.

Benefits of CFDs:

• More flexible – profit whether prices go up or down
• Higher leverage to amplify profits
• Access to diverse assets from a single platform
• Ability to short sell (short selling)
• Trade outside regular hours
• Lower transaction fees

Many online trading platforms offer CFDs on US stocks like NAS100, SPX500, and individual stocks such as AAPL, AMZN, GOOG, TSLA.

Major US Stock Exchanges

New York Stock Exchange (NYSE)

Founded in 1792, NYSE is the oldest stock exchange in the US. Initially, it only listed three government bonds and two bank stocks, but today it hosts most of the long-established and largest US companies.

Foreign companies can also list on NYSE if they comply with SEC regulations. This exchange surpassed 1 million shares traded in a day in 1888, and by 2022, this number increased to 5 billion shares.

NYSE operates from Monday to Friday, 9:30 AM to 4:00 PM US time. According to Statista, the total market capitalization of the exchange reached approximately $24.6 trillion in mid-2022.

( NASDAQ Exchange

NASDAQ started operating on February 8, 1971, as the world’s first electronic stock market. Initially, it was just a “quote system,” gradually developing into a fully automated matching market.

Due to less strict listing requirements than NYSE, NASDAQ often hosts many small-cap companies and non-US enterprises. New tech companies tend to choose NASDAQ, leading to higher risks and speculative nature compared to NYSE.

Major US Stock Indices

The US market has over 5,000 indices created by financial firms and investment funds. But globally, the three main indices are considered representatives:

) Standard & Poor’s 500 ###S&P 500###

This index includes 500 top US companies, selected based on market capitalization, liquidity, free float, industry, financial health, and trading history.

These companies account for about 80% of the total market capitalization of the US stock market. The S&P 500 reflects the overall trend of the entire market. It is calculated using a market-cap weighted method, meaning if the total value drops 10%, the index also drops 10%.

( Dow Jones Industrial Average )DJIA###

DJIA is one of the oldest, most famous, and widely used indices worldwide. It consists of 30 of the largest and most influential companies in the US, representing about a quarter of the total value of the US market.

Unlike the S&P 500, Dow Jones uses a price-weighted method, so stocks with higher prices have a stronger impact on the index’s movements. Dow is known for including the best “blue-chip” companies with regular dividend policies. However, it does not represent small-cap, tech, or international stocks.

( Nasdaq Composite Index

This is a market-cap weighted index of all stocks traded on Nasdaq, including foreign companies but mainly tech firms.

Nasdaq Composite includes companies from various sectors: finance, industrials, insurance, transportation. It reflects the performance of the tech sector as well as investor sentiment towards speculative stocks. Because it includes many small-cap companies, this index tends to be more volatile.

Step-by-Step Foreign Stock Investment Process

) Step 1: Choose Trading Tools

Decide between ETF ###long-term, lower risk### or CFD (short-term, higher risk, higher profit).

( Step 2: Register an Account

Complete identity verification and provide necessary information.

) Step 3: Find Opportunities

Use technical analysis tools, economic news, and market data to identify ideal entry points.

Step 4: Deposit Margin

Send initial capital into your account. With CFDs, you can leverage to open larger positions with less capital.

Step 5: Execute Trade Orders

Open buy positions when expecting prices to rise or short sell when expecting prices to fall.

Step 6: Manage Positions

Regularly monitor, set take-profit orders when profits reach targets, and cut losses when adverse movements occur. With leverage, losses are amplified, so risk management is crucial.

Preparation Before Investing

Choose a Reliable Broker

Your broker directly affects your profitability. Look for regulated platforms with reasonable trading fees and good customer service.

Equip Yourself with Knowledge

Before investing real money, use demo accounts to familiarize yourself with trading. Understand how to calculate P/E ratios, economic indicators, company news, and how to read charts.

Develop a Detailed Financial Plan

Decide initial capital, appropriate leverage based on your risk tolerance. Remember, leverage can amplify both profits and losses.

Getting Started

Buying foreign stocks is no longer a luxury for Vietnamese investors. With derivative tools like ETFs and CFDs, you can access the world’s leading markets.

If you are a long-term investor with a sustainable plan, ETFs are the suitable choice. If you seek higher profits and are willing to accept corresponding risks, CFD trading might be your path.

The most important step is to start learning, practicing on a demo account, and only use real capital when you are confident. The US stock market is waiting for you to explore endless opportunities.