Most Popular US Stocks of 2022 (So Far)
Some Canadian investors looking to diversify their portfolios look south of the border at the multitude of companies trading on US stock markets.
This was especially true when the COVID-19 pandemic left millions of people across North America suddenly stuck at home in early 2020. One of the outcomes was a surge in people buying stocks online.
According to The Economist, there were 59 million Americans with trading accounts in 2019. By the summer of 2021, that number had jumped to 95 million. Numbers in Canada likely followed a similar trend.
But why US stocks? Well, a basic tenet of investing is diversification. To diversify your holdings, you should hold many different stocks or other assets across different exchanges, industries, countries and risk levels to balance your exposure in case some of them perform poorly.
If you’re thinking about building your own portfolio and diversifying it with US stocks, you may wish to see what other people are buying. Below is a list of the top 14 US stocks so far in 2022, as measured by the volume of people buying or selling on Wealthsimple Trade.
Here are the top 14 US stocks of 2022 so far by trading volume:
- TESLA (TSLA): Known for its electric cars and space rockets, it’s perhaps most famous for its controversial founder Elon Musk and his prolific social media posts.
- AMC (AMC): This cable channel is the home of hits like Breaking Bad and The Walking Dead. It gained some fame last year as a so-called “meme stock,” when day traders banded together to send its share price soaring.
- Apple (AAPL): This tech giant reported revenue of over US$365 billion in 2021. To put that in perspective, that is slightly more revenue than the federal government of Canada collected through taxes and other means in the same year.
- GameStop Corp. (GME): This is another stock that gained infamy when day traders sent its share price soaring last year.
- Meta Platforms Inc. (FB): This company rebranded as Meta last year, but it’s best known for its Facebook social network.
- Microsoft Corp (MSFT): This US tech giant revolutionized PC software and has reinvented itself as a peddler of cloud computing solutions.
- Lucid Group (LCID): This electric car manufacturer builds vehicles and the energy storage systems they use.
- NVIDIA Corp (NVDA): The US semiconductor chip designer is one of the most valuable companies by market cap in the global semiconductor ecosystem.
- Vinco Ventures (BBIG): This stock has also become popular with the day-trading crowd. It’s best known for its video-sharing service Lomotif, which is seen as a rival to the wildly popular TikTok app.
- Amazon.com (AMZN): The US shopping giant is one of the world’s most valuable brands. You’re looking at a price of $3,000 per share!
- Vanguard Index Fund (VOO): This is the first exchange traded fund (ETF) to make the list. This isn’t a company you buy shares in but a basket of different stocks meant to track a specific part of the stock market. In this case, VOO tracks the S&P 500 Index, which itself represents the top-500 US companies by market capitalization.
- Rivian Automotive (RIVN): Backed financially by companies like Amazon and Ford, Rivian makes higher-end electric SUVs and pickup trucks. It’s seen as a rival to Tesla.
- Alphabet Inc. (GOOGL): Most famous for its search engine Google, which has entered our lexicon as a verb, Alphabet is 1 of the 5 most valuable companies in the world.
- ProShares UltraPro QQQ (TQQQ): This is another ETF, but with a twist. TQQQ tracks the top companies in the NASDAQ exchange but aims to triple the return of those companies. So if the NASDAQ 100 rose 1% on a given day, the TQQQ would rise 3%. How does it manage this? Well, this is an example of a “leveraged” ETF that uses debt to amplify returns. However, while this strategy can amplify your gains, it can do the same thing to your losses. Because of this double-edged sword, beginner investors should be cautious about investing in such securities.
This video is not sponsored by Wealthsimple.
Fractional shares for affordable exposure
You don’t have to buy an entire share to invest in a company you’re interested in. If the cost of an expensive stock gives you sticker shock, you may be interested in Wealthsimple Trade’s fractional share feature. It allows you to buy a portion of a share. For example, you can own 10% of an Amazon share for a price of $300. This gives you exposure to a company you might not otherwise be able to afford.
How to invest in US stocks
If you’re going to buy US stocks, it’s important to do so with a reputable broker that offers access to US markets. Wealthsimple, a member of the Power Corporation group of companies, manages over $8 billion in assets.
Wealthsimple is one of the only platforms in Canada that doesn’t charge commission every time you buy or sell stocks and ETFs. This also applies to US stocks and it means you save money every time you buy, sell or re-balance your portfolio compared to traditional brokers.
There is one thing to keep in mind here. You will pay a foreign exchange fee if you buy and sell the US stocks mentioned above, which is standard at most online brokerages. However, Wealthsimple charges the bank rate x 1.5%, while most brokerages charge around 2% on top of the rate for currency conversion.
With Wealthsimple, you can deposit up to $1,500 (or $5,000 for Trade Plus subscribers) and start trading immediately. This is important because as we have seen over the past year, popular stocks can drop or spike on a dime and you may want to have money you can invest immediately. Deposits of a larger amount have to wait for 3 days before you can start trading with that cash.
Looking to further diversify your portfolio?
In addition to diversifying your portfolio by industry, geography and exchange, you may also want to take it a step further by diversifying the types of assets you hold. Depending on your goals and risk tolerance, cryptocurrency can complement a portfolio of ETFs and stocks. Like the stocks above, crypto has recently taken off.
Wealthsimple Crypto is a separate account you can open inside Wealthsimple Trade that gives you access to 30 cryptocurrencies to buy and sell from your portfolio.
SPONSORED: These 5 crypto FAQs from Wealthsimple will help you understand cryptocurrencies and their place in your portfolio.Read more…
Wealthsimple is one of the only platforms in Canada that offers trading of both stocks and crypto in one app. Buying cryptocurrencies via Wealthsimple Trade is a bit different from buying stocks. For example, you need to wait a few days between adding money to your account and starting to trade. The same goes for selling cryptocurrencies – the money does not appear in your bank account immediately. You also have to pay a fee (sometimes called a spread) over and above the market price of the cryptocurrency.
US stocks can be a great way to add international exposure to your portfolio while at the same time investing in companies close to home.
Before buying any stocks, it’s important to do your research and think about a long-term horizon for expected returns.
And remember, not all trading platforms are created equal. Some charge you more to buy and sell securities while including a lot of fancy bells and whistles a beginner investor might not need to pay for.