We are on the brink of 2009 and almost a year of economic recession. It this time we are seeing rise in the confidence of people and investor. It started from the United States, so it must end there. Hence, GT has carried out a research to find out top ten reasons to invest in the United States.

United States is largest economy in the world with an estimated GDP of USD 14.4 trillion.With huge population and decent per capita income; it stands out as one of the best economies to invest in. In general, following 10 reasons make United States a perfect haven to shower your monies.

Reason 1:  Consumer friendly market

United States is the third largest country in the world in terms of population. It is home for around 308 million people. The history shows that the Americans are good consumers. They spend more and save less. This particular phenomenon is a crucial fact for any company which wants to invest in the U.S. The market is big and people are willing to buy the goods and services. Hence this point definitely stands tall while you plan to invest in the U.S.

Reason 2: History of great returns

S&P 500, an index for 500 of U.S. listed companies, is the best measure we have to measure the U.S. stock market performance. It is the best index that mirrors the overall progress of U.S. economy as it comprises of companies from various different sectors.

Now looking at the S&P data for last 10 years we see that an investor is making average earnings of 62.72 USD/year supported by an average dividend of 20.53 USD/year. This is a great return story the U.S. market has provided. Hence, we can clearly see that U.S. market has been a great place for investors.

Reason 3: Home to great companies

Source : businessweek

United States is the home to great companies for many years now. From IT giants Google, Microsoft, Apple, Yahoo to retail giant Walmart, U.S. certainly looks a lucrative market. All these great companies have been performing excellently and have been able to lure investment from people world wide. With strong fundamentals, these companies are all set to create waves in the coming days making U.S. a blue chip destination for top class investment.

Reason 4: Investor friendly policies Tax friendly

Source : business mt

There is great news for foreign investors looking to invest in the U.S. Any capital gain earned from investing in U.S. stock market is not subject to tax for foreign investors. A foreign investor can take home all the money earned from the U.S. stock market by without paying a penny in tax to U.S. Government. Similar is the case for a foreign company investing in U.S. real estate. This company will not have to pay for capital gain earned during asset sale. However, for a foreign investor (individual), for real estate capital gain, certain tax is to be paid to the U.S. Government. For more on the policies, please click here. Whereas for dividends, Investopedia says that “non-resident aliens face a dividend tax rate of 30% on dividends paid out by U.S. companies. However, they are excluded from this tax if the dividends are paid by foreign companies or are interest-related dividends or short-term capital gain dividends. This 30% rate can also be lower depending on the treaty between your home country and the U.S., so it is important that you contact your brokerage firm to verify the rate. ”

Reason 5: Transparency & easy access to information

Due to great laws like Sarbanes and Oxley Act and disclosure of financial data, U.S. is rated as one of the best countries to invest in. Any information related to a listed company can be found in Google Finance, Yahoo Finance, Motley Fool, Reuters and what have you. This makes it easier for any investor to get a low down on the information pertaining to any listed company from anywhere and at any time. A smart and knowledgeable investor can easily invest in U.S. market with the help of such easily and freely available financial data.

Reason 6: Diversification opportunities

U.S. is home to many companies spread across multiple industries. This makes US an ideal place to diversify ones investment. There are many great companies in IT, Mining, Manufacturing, Auto, Energy, Oil and Natural Gas, Financial, Retail and Health etc. Apart from these, an investor can invest in realty sector, gold, bonds, mutual funds and hedge funds. Thus we see that an investor has a great choice when it comes to selecting companies or sectors for investment.

Reason 7: Political stability

United States is one of the very few countries which has shown that political stability is the key pillar to economic stability. Due to bi-polar political ideology, today U.S. enjoys its status of politically stable country in the world. Because of this stable political situation, investors find it comfortable investing in the U.S. More than that, irrespective which ever party leads the Government, the policies and laws passed by the Senate have been found to be investor friendly.

Reason 8: Easy access to market

U.S. Government doesn’t impose any form of restrictions over inflow of monies in US securities. This has made it one of the most sought after markets in the world. If your local country has legal ties with US over investment policies, you can directly invest in US through your local mutual funds. This is one of the reasons why we see growing number of Foreign Institutional Investors (FIIs) in the US.

Reason 9: Lower interest rates

The current interest rate structure in the U.S. has made it possible for the investors to borrow dollars at near zero rates (short term rates). Due to this scenario, investors are borrowing and using that borrowed dollars to purchase high yielding assets at some other countries. This is increasing carry trade for US dollars. At the same time, due to low bank rates, companies looking for some expansion can get loans at cheap cost. This again will increase the investment within the US territories.

Reason 10: Recovering economy

After the fatal crash, instigated by sub prime crisis, of 2008, U.S. market is slowly recovering from the ashes. Many companies, both listed and non-listed, were heavily affected by the crash and some of them had to eventually RIP amidst this financial turmoil. But at the same time, this falling economy also has provided one of the best opportunities for investors to invest in companies which are trading at below the intrinsic values. Investors like Warren Buffet were seen going on a shopping spree during this turmoil. Still there are many companies which look fundamentally strong and have potential of making loads of money in the long run. Hence, investors can make plenty of advantage of economy which is on recovering path.

Image Source : culterynewsjournal