As late October arrives, the disclosure of third-quarter earnings reports is drawing to a close, and the window for year-end asset allocation is quietly opening. At this moment, "Why buy US stocks" has once again become a topic that global investors cannot avoid. To answer this question, the Nasdaq index may be the best starting point—it is not only a bellwether for global tech stocks, but also reflects the deeper advantages of the US stock market at the institutional, corporate, and capital levels.
1. Market Depth and Liquidity: The US Stock Market as an Irreplaceable "Deep Pool"
When discussing why to buy US stocks, the first unavoidable answer is scale. The total market capitalization of the US stock market accounts for more than 40% of the global equity market, with the New York Stock Exchange and Nasdaq—the two major exchanges—bringing together thousands of listed companies from different industries and at different stages of development. From century-old establishments to innovative companies founded just a few years ago, from industrial giants to biotech firms, hardly any other market can offer such a rich array of investment targets.
Beyond scale, liquidity is equally critical. The average daily trading volume of US stocks has long ranked among the highest globally. This massive capital capacity means that large trades have a relatively limited impact on prices, transaction costs are lower, and market entry and exit are smoother. For cross-border capital, this "deep pool" effect significantly reduces the friction costs of entering and exiting, and it is also an important foundation for the long-term preference of global capital for US stocks.
2. Nasdaq's Innovation Ecosystem: An "Incubator" for Quality Companies
If the NYSE carries the traditional foundation of the American economy, then Nasdaq is the engine of the US stock market's innovation economy. Founded in 1971, this exchange was the world's earliest electronic trading market. After more than five decades of development, it has become a hub for global technology and new-economy companies.
1. Inclusiveness of the Listing System
Nasdaq adopts more inclusive listing rules for unprofitable companies, dual-class share structures, and similar cases, allowing a large number of innovative companies in high-growth phases that have yet to turn a profit to access the capital market. For investors, this means being able to share in the dividends of corporate growth earlier, rather than waiting until a company is fully mature to get an entry ticket.
2. The Leading-Company Effect and the Index's Self-Evolution
Looking back at the long-term trajectory of the Nasdaq index, the contribution of its leading companies has been remarkable. More importantly, the index itself has the ability to "self-evolve": it regularly adds representatives of the new economy and removes laggards, keeping the index consistently aligned with
Viewed over a longer time horizon, US stocks rank among the top in long-term returns across major global markets. Take the S&P 500 Index as an example: measured over several decades, its historical annualized return has hovered around the 10% mark; propelled by waves of technological innovation, the Nasdaq Index has delivered even stronger long-term performance. Of course, past returns are no guarantee of future results, but the underlying "earnings-driven" logic deserves attention—the primary source of US stock returns is the sustained earnings growth, dividends, and share buybacks of listed companies, rather than pure valuation expansion.
Another frequently underestimated trait is resilience. Looking back at the crises of the past several decades, the US stock market has weathered repeated sharp drawdowns, yet it has always gone on to reach new highs, driven by new industrial cycles. For investors who can tolerate short-term volatility and stay committed to long-term holding, time is often the best friend of US stock investing.
5. As the Year-End Window Opens, How Can Everyday Investors Position in US Stocks?
At this year-end asset allocation juncture, for investors looking to participate in the US stock market, the following approaches are worth considering:
- Define your allocation ratio: Overseas asset allocation should match your own risk tolerance; it is advisable to start from funds that can remain idle over the long term and determine a reasonable percentage range;
- Choose the right instruments: For most investors, funds tracking broad-based indices such as the S&P 500 and the Nasdaq 100 are a low-barrier entry point, sparing them the burden of researching individual stocks;
- Focus on earnings, not sentiment: Short-term markets are noticeably swayed by policy expectations and capital flows, but long-term returns ultimately depend on corporate earnings; earnings season is an important window for assessing the quality of your holdings;
- Smooth costs by building positions in batches: When facing volatility at elevated levels, dollar-cost averaging or phased buying can effectively smooth holding costs and reduce the pressure of market timing.
Conclusion: When You Buy US Stocks, You Buy an Ecosystem
Back to the original question—why buy US stocks? The answer perhaps lies not in the index level at any given moment, but in the complete ecosystem it represents: the world's largest capital market, the most vibrant breeding ground for innovation, the most mature investor protection regime, and decades of consistent compound returns. The year-end allocation window is now open; rather than agonizing over short-term ups and downs,
