Australian investors love buying US stocks. That's understandable, given the United States' dominance of the global economy and the fact that most of the world's highly successful companies call the US home.
The ASX certainly has some great companies, but none come close to rivalling the impact and global scale of stocks like Amazon, Apple, Alphabet, Coca-Cola, Visa, and Exxon Mobil, just to name a few.
Saying that, many ASX investors might be feeling a little apprehensive about investing in US stocks right now.
For one, the US markets are at all-time highs. The flagship S&P 500 Index (SP: .INX) has risen by an extraordinary 17.5% over just the past 12 months.
For another, regardless of readers' political beliefs, it cannot be denied that the economic and trade policies of the current White House are not exactly promoting stability. From ever-changing tariffs to a deliberate weakening of the US dollar and the interference of the independence of the US Federal Reserve, President Donald Trump is certainly taking a less-than-traditional approach to economic management.
As such, it might be tempting for ASX investors to want to avoid investing in the US markets and in US stocks right now.
However, that attitude, while understandable, may be a mistake that could cost investors who shun the 'States. That's the view of a few expert investors, anyway.
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Experts: US stocks are still worth buying
According to a recent report, the prevailing consensus at a GSFM investor forum in Sydney this week was that stock market euphoria against a backdrop of a slowing US economy was "not a contradiction". It was also noted that this week's interest rate cut from the Fed heralds the start of a new easing cycle that should be good news for investors.
The report quoted Marc-André Lewis, chief investment officer at CI Global Asset Management, as stating the following:
It's important to distinguish that the US economy and the US markets are two different things… There's a lot of monetary and fiscal stimulus pending. So I think we still are in a good period for markets.
Lewis went on to add that the "path of least resistance" for the US markets was upwards.
Qiao Ma, portfolio manager at Munro Partners, agreed. Ma noted that 70% of her portfolio was still invested in US stocks like Microsoft and Nvidia, and told investors that the strong balance sheets of US stocks were insulated from the broader American economy.
The portfolio manager also describes the top US stocks, such as Microsoft and Nvidia, as "global champions" that are a cut above the rest thanks to innovation, leadership, and global reach.
If that hasn't convinced readers, it might be worth quoting the legendary Warren Buffett. Buffett has long been unapologetically optimistic about America, once saying that "For 240 years, it's been a terrible mistake to bet against America, and now is no time to start".
Let's see if history proves him right once again.
