Getting to Know Stock Indices in America

Before knowing how to buy American stocks, it's a good idea to understand the types of stock indices that exist in Uncle Sam's country. There are three main stock indexes in the United States (US). The three stock indexes include the S & P 500, Dow Jones Industrial, and the Nasdaq.

The S & P 500 Index is an index consisting of the 500 largest stocks from various sectors on Wall Street, or the United States stock exchange. This means that the 500 stocks have great potential to become a watchlist for bookies and institutional investors.

According to the spglobal.com website, the top 10 stocks in the S&P 500 index include Apple Inc., Microsoft Corp., Amazon.com, Google, Tesla, Meta (Facebook), Nvidia, Berkshire Hathaway, and Unitedhealth Group Inc.

This means that the 10 stocks are among the largest capitalized stocks in the United States.

Most recently, there was an uproar about Apple's market capitalization, which was recorded to touch US$3 trillion or equivalent to Rp.

In addition to the S & P 500 index, there is also the Dow Jones Industrial Average (DJIA). The Dow Jones is one of the oldest indexes in the United States.

Down Jones consists of 30 of the largest and most influential stocks in the United States. The majority, the stocks listed on the Dow Jones are large stocks that often pay dividends to investors.

Meanwhile, the 10 stocks with the largest weights in the Dow Jones index include UnitedHealth Group, Home Depot, Goldman Sachs, Microsoft, McDonalds, Salesforce.com, Amgen, Visa, Boeing, and Caterpillar.

Finally, the Nasdaq Index is a stock index consisting of various sectors, except finance. However, the Nasdaq is more closely related to foreign stocks.

Overall, the Nasdaq index consists of 3,000 shares listed on the Nasdaq exchange. However, in particular, there is an index that contains fewer stocks, namely the Nasdaq 100, a stock market index containing the 100 largest non-financial companies on the Nasdaq exchange.

Then, the 10 largest stocks on the Nasdaq 100 index include Apple, Microsoft, Google, Amazon, Tesla, Meta (Facebook), NVIDIA, ASML Holding, Broadcom Inc., and NetEase Inc.

Difference between Nasdaq and New York Stock Exchange

Before discussing the application to buy shares abroad, there is something that must be understood first, namely the difference between the Nasdaq exchange and the New York Stock Exchange. Both, both in the United States, so what's the difference?

One of the most striking differences is the trading scheme. So, the New York Stock Exchange adheres to an auction trading scheme. New sellers can sell shares if there are interested buyers at the same price, and vice versa. If the prices do not match, it means that the transaction will not occur.

Here, the stock price is formed by the results of the auction transaction. If the demand is higher than the supply, it means that the stock price can skyrocket. A similar concept is also used on the IDX to date.

Then, Nasdaq uses a dealer market scheme. So, investors who want to buy and sell do not need to wait for those who want to buy and sell at the same price. Investors can immediately find sellers and buyers, namely the dealers.

Here, the dealer will offer the best price to investors so that they are interested in transacting. For example, this dealer scheme is similar to a foreign currency exchange, where the buyer is the provider of the foreign currency exchange service. With this scheme, transactions that occur are clearly faster and save time.

How to Buy American Stocks from Indonesia

There are a lot of people who are curious about how to buy stocks abroad, at least in the last few years. This was due to the aggressive movement of stock prices in the United States, especially technology stocks.

Finally, many Indonesians are jealous of the aggressiveness of stocks in the US. In fact, many think that the US stock market does not have auto rejection. In fact, they have a limit up and limit down or LULD scheme.

The LULD scheme is not as simple as auto rejection, it has a more complicated calculation to see if the stock price is moving fairly or if the volatility is not fair until it gets a LULD.

To date, there are two applications to buy shares abroad, namely Gotrade and Pluang. Which is the best of the two apps?

How to Buy American Stocks with Gotrade

Gotrade is an overseas stock investment platform pioneered by TR8 Securities Inc. in early 2021. Gotrade is under the regulation of the Labuan Financial Service and Securities Act. in Malaysia. Reportedly, Gotrade has been operating in almost 150 countries.

Gotrade was founded by three people, namely David Grant, Norman Wanto, and Rohit Mulani.

David Grant is a South African citizen who previously worked as CEO of The Charles Schwab Corporation's Singapore Office. Then, Norman is an Indonesian citizen who has the ability in the field of engineering technology. Then, Rohit is the CEO of GoTrade who is a Singaporean citizen.

Gotrade has received around 7 million US dollars in funding since its inception to date. Some of the other Gotrade investors, Y Combinator, LocalGloba, and Social Leverage.

Gotrade users who have registered will be connected to Alpaca Securities, a securities licensed by regulators in the United States.

Gotrade also has a custodial tire, namely BMO Harris, a bank in Chicago. The Deposit Insurance Corporation (LPS) there will guarantee customer funds of up to US$250,000 per customer.

BMO Harris Bank is one of the publicly listed banking sector companies in the US with a market capitalization of approximately US$64 billion.

Advantages of the American Gotrade Buy Stock App

The advantage of Gotrade's overseas share buying application is that investors can buy shares in the United States (US) directly. Then, the capital to buy shares does not have to be one lot so that it can be done starting from a small capital.

Due to the direct ownership of shares, investors are also entitled to the distribution of annual dividends and even participate in the general meeting of shareholders (GMS). Later, the dividend portion will be adjusted to the number of shares owned.

In addition, Gotrade also does not charge commissions or deposit fees to its users. However, if users in Indonesia want to withdraw the profits, they will be charged about 2 US dollars or around Rp. 29,000. Then, for commissions from regulators worth 5.1 US dollars per 1 million US dollars.

Gotrade also features a graph of how much the overall portfolio has made or lost. That way, investors can measure and set a more mature strategy.

In fact, users can not only buy stocks in the United States, but also exchange trade funds (ETFs), a kind of mutual fund that moves according to the index it refers to. Including Ark Investment's ETF owned by Cathie Wood.

Weaknesses of the American Gotrade Stock Selling Application

The weakness of the Gotrade overseas stock trading application is that the application does not support users to perform technical or fundamental analysis. Fundamental data seems incomplete, although it is quite pleasing to look at

Actually, Gotrade provides a more complete service, but users have to pay for the service. The service is called Gotrade Black. In that service, Gotrade presents technical analysis charts, ranking analysis of each stock in more detail, to what experts say about the stock.

To subscribe to the Gotrade Black service, users have to pay around 2 US dollars or Rp. 29,000 per month. If the user is an active trader and investor, buying and selling may be interesting, but if the investment is using the dollar cost averaging scheme, it seems that there is no need to pay for this feature.

GoTrade is now legal in Indonesia

GoTrade is officially licensed in Indonesia after collaborating with Valbury Asia Futures in Indonesia. So, now GoTrade will not be considered an illegal application.

GoTrade also released its own application for GoTrade Indonesia. However, we do not yet know how the mechanism for transferring funds from global GoTrade to Indonesia will be.

GoTrade emphasizes that access to the US stock market through Valbury will continue to use real shares owned by users. So, the scheme is that Indonesian GoTrade users whose transactions will be assisted by Valbury enter trading on the US stock market through Alpaca Securities.

So, the shares of GoTrade Indonesia users are in real form and are held by Valbury in a separate account through Alpaca Securities.

However, GoTrade Indonesia's way of working is slightly different from that of global GoTrade due to several regulations from CoFTRA, the futures trading regulator.

GoTrade Indonesia will only provide 50 shares that can be traded, including Tesla, Apple, and Netflix. However, GoTrade admitted that in the future it will be made the same as GoTrade Global.

American Stocks App Pluang

Pluang is one of the foreign stock applications that can be used in Indonesia. Initially, Pluang came from an online gold trading platform called Emas Digi. When it changed its name to Pluang, the application platform had the option of investing in foreign stock indices.

First launched, Pluang provides overseas stock investment in the S&P 500 index. Then, in 2021, overseas stock investment services will increase after the presence of the Nasdaq 100.

However, what is traded in Pluang is not the S&P 500 index nor the Nasdaq 100, but the micro e-mini of the S&P 500 Index Futures and the e-mini of the Nasdaq 100 Index futures. Both are futures instruments that are traded on the Chicago Mercantille Exchange.

Pluang suggested using a long-term investment scheme with dollar cost averaging. Due to futures products, the analysis is a bit complicated. You see, the price of the S&P futures index may appear earlier than the regular S&P index.

Pluang also recently added a feature that allows stock transactions in the US with a contract for difference (CFD) scheme. This CFD scheme is similar to eToro, which was viral in the past.

CFD is a derivative product in which the settlement of transactions is carried out without the delivery of physical goods. However, stock price movements will refer to the actual assets.

For example, there is an investor who trades Google shares in Pluang, he will buy shares at the current market price. However, the investor does not actually own the stock. So, they do not have rights to dividends and the GMS.

Advantages of the American Stocks App Pluang

The Pluang overseas stock application has the advantage of being very easy to use, especially for beginners. Then, another advantage, Pluang has been regulated by CoFTRA. You see, CFD is one of the derivative instruments supervised by CoFTRA. The transaction process is also very easy to do in rupiah.

Pluang app view

PLUANG app view

Investment options are also quite diverse, from US stocks directly or to indices such as the Nasdaq and S&P. So, investors who don't want to be bothered can go directly to the Nasdaq and S&P indices, but those who want to experience the US stock transaction experience can also directly trade their shares.

Interestingly, Pluang also has an auto investment feature that can make you disciplined in setting aside monthly income.

Beyond that, by using the Pluang application, investors can also diversify their assets cheaply into gold, mutual funds, to crypto.

Disadvantages of America's Stocks App Pl

The downside of Pluang is that its application scheme is very unattractive to pro traders. Then, investment choices in the S&P 500 and Nasdaq 100 indexes make investors less flexible in choosing stocks in detail. US stock options are still limited, so not all stocks are available on Pluang.

So Who Are The Best American Stock Apps?

There is no best offshore stock app because all of them are again suited to individual needs. For example, if you want to actually own physical US stocks, you can enter Gotrade, but for just trading or pursuing capital gains, you can also go to Pluang.