Approaching the International Stock Market: A Guide to Investing in the US from Vietnam in 2025

Want to enter the international stock investment field, especially the US market? This is a strategic choice for 2025. The US stock market is the largest exchange globally, with over 6,300 listed companies from domestic and international firms. With enormous market capitalization, it hosts giant corporations with strong growth potential like Apple, Microsoft, and Google, attracting millions of global investors.

The international stock market, specifically the US, offers diverse opportunities with high profit potential. But how can Vietnamese individual investors access and participate in this market effectively? The following article will answer all your questions.

Why Choose International Stock Investment?

Advantages of Company Diversity

Compared to the Vietnamese market, the US stock exchange offers unlimited choices. NYSE and NASDAQ are the two largest exchanges by market capitalization, opening opportunities to invest in leading global growth companies like Facebook, Amazon, Apple, Google, or Tesla. You are not limited to a small market like Vietnam but can select from thousands of quality stocks.

Superior Returns Compared to Domestic Market

Historical data clearly shows the discrepancy: the S&P 500 index has increased over 39% since May 2018, while VNIndex has decreased about 9%. Even more, Nasdaq has surged over 64% thanks to the explosive growth of tech stocks. This is clear evidence of the higher return potential.

Risk Management Through Diversification

Owning US stocks alongside domestic assets automatically reduces risk when the Vietnamese economy faces difficulties. Especially in the context of rising interest rates and the VND losing value pressure, diversification is a reasonable portfolio protection strategy.

Convenience in Implementation

Currently, buying US stocks has become easier than ever with the development of derivative tools. You do not need US citizenship or a US bank account.

Top 10 Notable US Stocks for Investors

Note: PE ratios are constantly changing. This information is for reference only at the time of writing.

How to Buy US Stocks from Vietnam

Current Status: Difficulties and Solutions

To directly purchase underlying stocks on NYSE or NASDAQ, you must have US citizenship and an account with a US brokerage. For foreign individual investors, the only feasible method is to use derivative instruments, mainly ETFs or CFDs.

Method 1: ETF Funds

Definition and Operating Principles

An (Exchange Traded Fund) (ETF) is a basket fund that mimics the fluctuations of a reference index or a group of assets. ETFs have both the characteristics of investment funds and publicly listed stocks.

Main Benefits

• Easy diversification with low costs without deep knowledge of individual stocks
• Minimize risk by investing in a basket of securities instead of betting on a single stock
• Avoid market manipulation or abuse due to multiple component stocks

Popular ETFs Mimicking the S&P 500 Index

• Vanguard S&P 500 ETF (VOO)
• SPDR S&P 500 ETF (SPY)
• iShares Core S&P 500 ETF (IVV)

Method 2: CFD Contracts for Difference

Definition

CFD (Contract for Difference) allows you to invest in individual stocks without owning the shares. You profit from price differences when stock prices fluctuate.

Outstanding Advantages

• More flexible than ETFs as you can choose specific stocks
• Profit from both rising (buy) and falling (short) markets
• Leverage utilization, access global markets from a single platform
• Relatively low transaction costs
• Off-hours trading when normal markets are closed

Popular CFD Trading Tools

International brokers offer CFDs on indices like SPX500, NAS100, as well as individual stocks such as AAPL, AMZN, GOOG, TSLA, etc.

General Process for International Stock Trading

Step 1: Choose a Reputable Broker

Selecting a brokerage is extremely important. The broker must:

• Be licensed and regulated by a financial authority
• Have high reliability, long operational history
• Provide stable trading tools, reasonable fees
• Offer good customer support for trading issues

Step 2: Register an Account

Fill in personal information as required by the broker. Verification may take from a few hours to several days.

Step 3: Understand Trading Tools

Brokers typically provide:

• Online trading platforms with analysis charts
• Economic event calendars and market news
• Demo accounts with virtual money for practice without real money

Step 4: Deposit Initial Capital

Transfer funds into your trading account. Minimum deposits usually start from $50 , depending on the broker. If not confident, start with a small amount.

Step 5: Execute Trades

• Look for trading opportunities based on technical or fundamental analysis
• Place buy orders when expecting price increases
• Place short orders (short) if predicting price declines

Step 6: Manage Positions

Regularly monitor your portfolio. Since derivative instruments use leverage, profits and losses are amplified accordingly. Have clear plans for:

• Taking profit when targets are reached
• Cutting losses when the market moves against your expectations

Major US Stock Exchanges: NYSE and NASDAQ

New York Stock Exchange (NYSE)

History and Position

NYSE was established on May 17, 1792, initially with only 3 government bonds and 2 bank stocks. After over 200 years, it has become the most established and reputable exchange in the US. Long-standing American companies with large market caps are listed here. Besides US companies, foreign firms can also list if they comply with SEC rules.

Trading Volume

In 1888, NYSE exceeded 1 million shares per day. By 2022, this number reached 5 billion shares daily. The market capitalization of NYSE was nearly $24.6 trillion in mid-2022.

Operating Hours

NYSE operates from Monday to Friday, 9:30 AM - 4:00 PM Eastern Time.

NASDAQ Stock Market

History and Characteristics

NASDAQ started on February 8, 1971, as the world’s first electronic stock market. Initially just a quote system, it gradually developed into an automated matching market with detailed transaction reports and volume data.

Listing Conditions

The listing requirements on NASDAQ are less strict than NYSE, so it often hosts many small-cap or young companies. Many new tech firms prefer NASDAQ, making stocks on this exchange more speculative and riskier.

Global Position

NASDAQ is the second-largest exchange in the US by market capitalization, hosting many of the world’s leading tech companies.

Important US Stock Indices

The US market has over 5,000 indices created by financial firms and investment funds. However, the three main indices that investors follow are S&P 500, Dow Jones, and NASDAQ Composite.

Standard & Poor’s 500 Index (S&P 500)

Composition

The S&P 500 includes 500 top US companies. Selection is based on market cap, liquidity, free float, industry sector, financial health, and trading history.

Significance

Companies in the S&P 500 account for about 80% of the total US market capitalization, so this index reflects overall market trends. It is weighted by market cap, meaning each stock’s influence is proportional to its size.

Dow Jones Industrial Average (DJIA)

History

DJIA is one of the oldest, most famous, and most frequently used indices worldwide.

Composition

DJIA includes 30 of the largest and most influential US companies, representing about a quarter of the total market value.

Calculation Method

Unlike the S&P 500, DJIA uses price-weighted methodology, so higher-priced stocks have a greater impact on the index. DJIA is known for blue-chip companies that often pay regular dividends.

Nasdaq Composite Index

Scope

Nasdaq Composite is a market-cap weighted index of all stocks traded on NASDAQ, including many non-US companies, mainly in technology.

Industry Diversity

Besides tech, investors find financial, industrial, insurance, and transportation stocks. However, Nasdaq Composite also includes many small-cap speculative stocks.

Significance

Movements of Nasdaq Composite reflect the performance of the tech sector and investor sentiment toward speculative stocks more than Dow or S&P 500.

Preparing for International Stock Investment Journey

1. Choose a Reputable Broker

Brokerage plays a crucial role, directly affecting future profitability. You should:

• Check license and registration
• Research reputation and history
• Compare transaction fees across platforms
• Ensure good customer support

2. Equip Yourself with Knowledge

Regardless of the market, you must:

• Understand key stock indices
• Master technical and fundamental analysis
• Learn macroeconomic factors affecting markets
• Develop an investment strategy aligned with your goals and risk tolerance

Many brokers offer demo accounts with virtual money for practice before investing real funds. This is a great opportunity to familiarize yourself with the platform risk-free.

3. Arrange Financially Reasonably

• Determine the amount you are willing to invest
• Have a detailed plan for fund allocation
• If initial capital is small, leverage provided by brokers can help
• Remember, leverage is a double-edged sword—it can increase profits but also amplify losses

Kickstarting Your Investment Journey

The US stock market opens a golden door for Vietnamese investors wanting to participate in international markets. You have two main paths:

• ETFs for long-term investors: If you have time, patience, and seek stability, ETFs are suitable
• CFDs for high-risk traders: If you understand the market, have trading experience, and want faster profits, CFDs may be appropriate

Before taking action, you should:

• Research reputable brokers thoroughly
• Build a specific investment plan
• Start small to understand the mechanics
• Continuously learn and update market knowledge

When ready, begin your investment journey. Wishing you success in exploring international stock markets!