Investing in US stocks

johnjohn82

Hi guys

I'm new here so hello

I'm intrested in buying some US shares. i.e. fb, amazon, at&a etc.

I currently have a IG account and have some UK shares in there at the moment.

I can also trade US stocks in there but the fee's in doing so are pretty hefty i.e. 2% to buy then another 2% to sell obviously.

This is probably the norm through the board, but does anyone know of any cheaper alternatives? I had a look at iii.co.uk but doesn't make it clear what the charge is. Also looked at HL and they seem more expensive than IG.

Many thanks in advance.
John

sixpence.

If I were you I would invest in a fund which is a collection of stocks and other assets. A US equity index tracker would include Apple and Amazon, or you could specifically find a tech sector fund but the risk would be higher. Best of luck!

johnjohn82

thanks for the reply Six. But I like the control I have in buying and selling.

But I appreciate your reply.

economic

Look into PCT - polar capital tech. Invests in tech companies.

I gotto say though we have had a huge run up in tech stock prices, why buy now all of a sudden AFTER its gone up so much?

johnjohn82

Hi, i mentioned tech companies there but they where just given as examples. Having said that, I hold most stocks long term, and I think those mentioned are good long term investments imo.

economic

johnjohn82 wrote: »

Hi, i mentioned tech companies there but they where just given as examples. Having said that, I hold most stocks long term, and I think those mentioned are good long term investments imo.

I would agree. If you are young then it is still good. I would buy a diversified portfolio of tech stocks though as you have no idea which ones will come out on top.

dividendhero

If you buy US stocks it's a good idea to get a W-8BEN form to avoid double taxation of your divis, on that subject the US does have some very good long term dividend payes such as Proctor & Gamble

johnjohn82

I filled that in already on the IG site. Nice and easy, only takes 2 minutes. Then I found the cost of trading the stocks I'm sure which ever broker I use they'll have a similar easy form to fill online.

bowlhead99

johnjohn82 wrote: »

I currently have a IG account and have some UK shares in there at the moment.

I can also trade US stocks in there but the fee's in doing so are pretty hefty i.e. 2% to buy then another 2% to sell obviously.

The charge is not 2%. The charge is TWO US CENTS ($0.02) per share bought, with a $15 minimum.
(https://www.ig.com/uk/investments/share-dealing/costs-fees)

Let's say you decided to buy 25 microsoft shares at $86 each.

The brokerage fee will be $0.02 x 25, which is $0.50. Unfortunately there is a minimum of $15 so you will pay $15. But that's $15 on a $2150 purchase, so it works out at 0.7% of your purchase cost. Not 2% of your purchase cost.

It isn't cheap to trade US shares from the UK as it's a niche service. As you noted, HL would charge you £12 per trade and they'd also charge you 1.5% for the foreign currency conversion while IG only want 0.3% for that bit, if needed.

With the IG example, assuming you keep your Microsoft shares for a decade, the trade costs to buy them plus the fx conversion was about 0.1% for each year you held them. As the value of a Microsoft share can fluctuate 70% in a year, it's negligible. If you want a lower percentage cost, buy in bigger chunks so that the $15 minimum commission doesn't hit you as hard.

johnjohn82

Thanks bowlhead99!

I just checked the site again and couldn't help laughing! lol I feel a bit daft.

I must of seen all the % of the other foreign markets on that page and just miss read it!

Yes, your correct $15 is pennys in comparison on what you can make. Thanks again buddy!

Tom99

You can also trade US stocks live with Halifax when the US market is open. Once a month they have a £3.95 per trade dealing day.