An extraordinary year for those who wish to invest in the United States
2024 will likely go down in history as one of the most important and profitable years for investors focusing on the world’s leading economy. An economy that continues to grow despite high interest rates:
- Estimated GDP growth of +2% (half a point above the expectations formulated in February)
- Dow Jones up +8% since the beginning of the year
- S&P500 up +18% since the beginning of the year
- Nasdaq up +27% since the beginning of the year
With unemployment at its lowest (around 4%) since many months now.
A mix of bright spots with only one shadow: inflation that has not yet fallen below 3%. Postponing the long-dreamed interest rate cut.
Why Invest in the USA
The data just presented already answers the question “Why invest in the United States?”: a country that manages to achieve growth and excellent results despite interest rates at 5.25%-5.50%. An economy that is considered and truly is the leading economy in the world and is home to 8 of the 10 most capitalized companies globally:
- #1 Microsoft with $2.965 trillion
- #2 Apple with $2.623 trillion
- #3 NVIDIA with $2.065 trillion
- #4 Alphabet (Google) with $1.950 trillion
- #6 Amazon with $1.806 trillion
- #7 Meta (Facebook) with $1.119 trillion
- #8 Berkshire Hathaway with $875.55 billion
- #10 Eli Lilly with $689.18 billion
These capitalizations surpass the GDP of entire nations. For the record, positions #5 and #9 are held by the oil company Saudi Aramco, founded as a joint venture between the Arabian American Oil Company (Aramco) and the Standard Oil Company of California (Chevron), and TSMC, Taiwan Semiconductor Manufacturing Company, a leader in semiconductor manufacturing.
Investing in the USA, therefore, means securing a part of the economic strength of this extraordinary country. Moreover, investing in the United States means investing in dollars, the world’s primary currency, used as a benchmark for significant quotations such as that of oil.
Why Invest in the USA in 2024
As mentioned at the beginning, 2024 will go down in history as an extraordinary year for investors. On one hand, until the FED cuts interest rates, it will continue to favor those with liquidity to invest, compared to those who need financing, such as those needing a mortgage to buy a house.
On the other hand, 2024 is an election year with the Democratic candidate vs. Trump contest, representing a clash between two models of society, taxation, the role of the state, and rules for the functioning of the economy. This clash generates uncertainty for those who need to invest.
Without these two factors—high interest rates and electoral uncertainty—economic data, logically, should be even more positive. Since these conditions are not permanent—by November we will know who has won and the FED will eventually lower rates—the US economy is destined to take off like a hot air balloon shedding two significant weights.
Where to find Investment Opportunities in the USA
On one hand, the financial markets are objectively very expensive, with the price-to-earnings (P/E) ratio averaging over 24. This means that it takes, on average, more than 24 years to recoup the value of the shares through earnings. For context, this ratio is 74 years for NVDA, 55 years for Amazon, 40 years for Microsoft, 36 years for Alphabet (Google), 35 years for Apple, and 29 years for Meta (Facebook).
On the other hand, there are markets like real estate which, due to high interest rates that are expected to fall, are currently “discounted”. As Carl Harris, President of the National Association of Home Builders (NAHB), stated, “Persistently high mortgage rates are keeping many potential buyers on the sidelines“. This affects both new constructions and “existing” homes, with the real estate market seeing a -0.7% drop in sales in May following a -1.9% decrease in April.
This situation expands the gap between American families struggling to buy a home to live in and investors, including foreign ones, with liquidity to invest who can make great deals by purchasing properties to rent to families. These properties are high-yield (most of those listed on this website, for example, offer between 6% and 10% annually) so that despite the drop in sales, prices are not falling; in fact, they are about to rise as soon as rates begin to decline, generating capital gains for those who have invested early, perhaps for the long term. Additionally, for those looking to protect their wealth, these are effectively safe investments.
How to Invest in the USA
If you are an investor with liquidity to invest, you can seize the opportunities of this extraordinary moment by purchasing one or more income properties with Opisas. Write to contact@opisas.com to schedule an appointment with a consultant who speaks your language.
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