FAQ

HOW TO INVEST IN THE NEW YORK STOCK EXCHANGE & NASDAQ WITH CFDS FROM BELGIUM [WITH LITTLE MONEY]

Unlike what most of the general public thinks, investing in the New York Stock Exchange from Belgium is a simple process that can be achieved easily from the phone through an online investment app, called Online Brokers. In order to open a trading account with a Broker, only a few personal details are required. In this article, we will refer to both the famous New York Stock Exchange and the Nasdaq Stock Exchange jointly as the "New York Stock Exchange". Technically they are different exchanges, however, we understand that the reader is interested in investing in large American companies that might be listed on any of both Stock Exchanges. Also, we will only refer here to Company Shares, we won’t comment on how to invest in Bonds.


Below we detail an easy way to start investing in financial instruments, for investors who have little capital [Little capital = 100 Euros].



New York Stock Exchange and Nasdaq: The two most popular markets for investors in Belgium


Based on the mythical Wall Street, the New York Stock Exchange (NYSE) is the largest Stock Exchange in the world by market capitalization where shares and bonds of the titanic North American corporations are traded. If a saver from Belgium invests in stocks or bonds that are listed on the New York Stock Exchange, he is investing in the historically strong US Dollar and diversifying his investments with the most traded financial instruments worldwide.


Shares of huge American Corporations are the most sought after financial assets by the general public. Below we list [Some of] the most popular shares of these two Stock Market for investors, starting from the ones that trade on NYSE:


  • Berkshire Hathaway: Financial company owned by the legendary investor Warren Buffet.

  • Alibaba Group: China's e-commerce giant, owned by Jack Ma.

  • Visa: Largest provider of credit cards in the world.

  • Johnson & Johnson: Industrial colossus that produces articles of mass consumption.

  • J.P. Morgan Chase: Diversified Financial Group.

  • Exxon Mobil: World's largest oil and gas producer.

  • Walmart: Number 1 supermarket chain worldwide.

  • Procter & Gamble: Another mass consumption industrial giant.

  • Mastercard: Provider of credit cards worldwide.

  • Walt Disney: The well-known entertainment and content company is also listed on the NYSE.


Among the Nasdaq's most popular stocks are the tech giants:


  • Apple: The company that revolutionized the mobile business by creating the iPhone, needs no further introduction.

  • Facebook: Another one that doesn’t need an introduction: The largest social network worldwide.

  • Amazon: The most popular eCommerce platform in the United States and the world.

  • Netflix: Application of series and movies with the largest number of subscribers worldwide.

  • Google (Alphabet): The Well-known technology giant, we only need to mention that Google's shares are called "Alphabet" on Nasdaq.


These are limited lists of the most well renowned shares, there's an big number of internationally recognized companies and brands available to invest in. An interesting way of investing is to invest in the S&P500 index, which groups the top 500 companies that are part of both the New York Stock Exchange and the Nasdaq.



S&P500: The Index that Best Represents the 2 largest Stock Exchanges jointly


Standard & Poor's 500 Index, also known as S&P500, is one of the largest stock market indices in the United States (The other one is the Dow Jones). The S&P 500 is considered the most representative index of US’ real economy.


The index is based on the market capitalization of 500 large companies that issued shares on either the NYSE or the NASDAQ markets. The S&P500 represents approximately 80% of the entire capitalization of the United States Stock  Market. The components of the S&P500 index and their weighting are determined by the S&P Dow Jones Indices rating agency. It differs from other indices in the financial markets of the United States, such as the Dow Jones Industrial Average or the Nasdaq Composite index, in the diversity of the items that make it up and in its weighting methodology. It is by far the most invested stock index in the world, and many people consider it as the trend marker of the North American economy, that is, if the S&P500 goes up, the economy is doing well.


Investing in a financial instrument that replicates the S&P500 Index is (the best?) an excellent way to invest in a good portion of the North American economy through the shares of its corporate giants.



But I am not an Investment Banker... Is it easy to invest?


Online Brokers allow investing in the New York Stock Exchange in a very simple way through optimized apps that grant access to the financial markets for the general public. In fact, most platforms resemble a social network or any other phone app: They are designed so that the investor can learn and start trading very quickly, without the need for much prior knowledge. Literally, to buy shares of, for example, Apple, or to invest in a financial instrument that replicates the S&P500 index, you have to:


  1. open an account,

  2. deposit money,

  3. search for "Apple" or "SP500" on the Broker’s Trading platform, and

  4. press the "Buy" button.


Done, you are officially investing in American related financial assets.

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But I don't count with a large bank account… Can I still invest in American Shares?


The answer to this question is Yes: Many Brokers do not have a minimum deposit (or it is a very low amount of cash), and many others do not charge a commission for purchasing shares of American companies.



Opening an account to Invest in financial instruments of the New York Stock Exchange from Belgium


Opening an investment account with an Online Broker is a process that is carried out online. It requires uploading an ID and a proof of address (electricity, water bills, etc) through the Broker’s App or via email. The methods of depositing and withdrawing money are usually:


  • Credit Cards

  • Bank Transfers

  • eWallets (PayPal, PaySafe, Skrill, SafetyPay, Neteller among many others)


The available options to deposit funds will depend on each Broker. A key fact to mention is that all of the Brokers presented above allow you to use a simulator on their platform, that is, they allow testing their Demo account, which is totally Free. In other words, you can open a Demo account, test the platform, and then decide whether to deposit money or not. And remember a very interesting fact: There is no minimum amount to open an account with Real Money with some of them.


Accounts may be opened in US Dollars (USD), Euros (EUR), Pound Sterling (GBP), Swiss Franc (CHF), Australian Dollar (AUD) as the base currency. Practically all of them offer the option in US Dollars or Euros.

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Risk Warning:

By investing in or trading financial instruments, commodities and any other assets, you are taking a high degree of risk. You can lose all your deposited money. You should only engage in any such activity if you are fully aware of the relevant risks.

Contracts for Difference ("CFDs") are leveraged products and carry a high level of risk to your capital as prices may move unexpectedly against you. Losses can exceed your deposits, and you may be required to make further payments. 74 - 89% of retail clients lose money when trading CFDs. You should consider whether you can afford the high risk of losing your money. These products may not suit all clients; therefore, ensure you understand the risks and seek independent advice.

  

 

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