For Individuals

How to start investing in US and European stocks?

Investing in US stocks: how to get started and succeed in the stock market?

The modern stock market provides investors with ample opportunities for investment and capital accumulation. Modern American and European stock markets have quite advanced tools for buying assets (short-term and long-term investment). To start investing for a private investor, it is enough to open your personal brokerage account with an American or European broker, go through the verification and registration procedures and start investing.

But, in today's unstable and changing world, investing is associated with high risks of capital loss, turbulence and instability. Recently, many investors have also begun to worry about high inflation around the world. Rather high inflation in the US and the Eurozone in 2022-2023 led to a loss of real purchasing power of capital.

In this regard, the investor needs professional financial and investment planning services in order to correctly calculate the target return and investment horizon. Each investor has his own risk sensitivity, his own goals and a certain initial capital.

In order to achieve a certain target (amount) in the future, the investor needs to make a forecast, calculate the expected target return, and also take into account the impact of inflation throughout the entire investment horizon. Otherwise, at the end of the period, the result of the investor will be rather insignificant, and he will not be able to acquire what he was hoping for!

How to start investing in stocks and the U.S. stock market?

The fundamental steps to begin investing involve making the decision to become an investor and expressing the desire to invest. Initially, it is essential to understand the distinction between investing and trading, avoiding confusion between short-term or intraday trading and investing (medium-term or long-term, such as in the stocks of American companies).

Next, you need to determine the currency for investment and comprehend the expected inflation level in that currency since your investments will naturally decrease annually. More precisely, the nominal amount of investments may increase, but the purchasing power of your capital will decrease by the inflation rate. This understanding is crucial for any novice investor.

The subsequent step involves opening an individual brokerage account with an American or European broker, completing the broker's system registration, and undergoing all KYC and AML procedures during the account registration. To initiate investments from Ukraine, you need to transfer funds through a bank to your open account with the broker. This can be done several times a year, replenishing your investment capital monthly or quarterly to purchase assets.

The brokerage platform allows investors to buy stocks, funds, shares of well-known American companies and hold positions in the portfolio for an extended period according to your investment strategy. You can read about what an investment strategy is here.

Why Long-Term Investment Planning is Crucial?

How Investment Horizon Impacts Investment Returns?

Every investor must remember that the long-term period comes with its substantial advantages and real benefits for investors. To ensure your capital truly works for you, it's essential to invest in stocks and funds on a long-term basis, aligning with your risk tolerance.

Long-term investment has the potential to significantly amplify investment returns as compound interest generates annual returns on both the invested capital and the income from the previous period. It is crucial not to withdraw capital from the portfolio but rather reinvest and diversify the portfolio appropriately.

Historical Returns of U.S. Stocks (S&P500 Index)

When considering investment in American stocks, funds, or the broad market index (S&P500 Index), investors need to understand and have realistic expectations regarding the future returns of their investments. This means that by investing in a specific strategy, instrument, or asset portfolio, your portfolio will have its unique returns and portfolio risk. This should be kept in mind.

The historical return of the S&P500 Index over a 10-year horizon is approximately 10.88% annually, considering dividend payments. While this may seem good (or possibly too low for some), it is not a guarantee that your portfolio will achieve similar or higher returns. As you may already understand, it is much more complex than it appears at first glance.

Why Investors Need to Consider Expected Inflation?

If historical returns showcase how well your portfolio performed in the past, future returns can significantly differ for several reasons. For instance, if your portfolio yielded, let's say, 12% annually over 10 years, you need to subtract historical inflation since the real purchasing power of money actually decreased by 2.5-3% annually.

So, what does this mean? Subtracting 12% - 3%, your actual annual returns are now 9-9.5%. Moreover, inflation might be higher than 2.5-3% annually. There were years when U.S. dollar inflation was 4.6% in 2005, 5.5% in 2008, 5.4% in 2021, and 9.1% in 2022. Disregarding this single factor, your real investment results will significantly differ, and over 10 years, inflation could reduce your real capital by 25-30%. How does such disappointment sound to you?

Hence, it is crucial to annually adjust your investment strategy to the inflation rate, rebalance the portfolio, and align the risk and expected return parameters of the portfolio to the required levels. Additionally, it's essential to remember that companies go bankrupt, and their stocks decline in value, so timely measures are needed, such as replacing assets with potential for long-term growth.

We haven't touched on tax optimization and the macroeconomic impact on your portfolio yet. In certain economic stagnation periods, assets may no longer generate the required returns according to your investment strategy. It is highly important to take corrective actions in a timely manner and adapt the investment portfolio and its structure to future economic upheavals, provided you can foresee them in advance.

Key Steps in Building an Investment Portfolio

Primary Criteria for Constructing Investment Portfolio (Stocks and ETF Funds)

The criteria for building a portfolio are not numerous: investor risk tolerance, target expected portfolio return, investment horizon, expected inflation, strategic portfolio structure, sectoral portfolio structure, and macroeconomic context.

Additionally, it's crucial to have a clear understanding of your portfolio's risk parameters and expected returns. What will be the Beta, Standard Deviation, Expected Return? When forming an investment portfolio for the next calendar year, corresponding calculations need to be made to balance risk and expected returns. It's vital not to exceed systematic and unsystematic portfolio risk, as risk tolerance cannot withstand significant fluctuations in portfolio value.

You must understand the boundaries you won't cross. Which sectors will you avoid investing in, what company capitalization won't you purchase? For instance, if a company's financial indicators deteriorate, will you close the position or keep the asset in the portfolio, and for how long?

Which U.S. Economic Sectors to Invest in and Why is it Important?

As mentioned earlier, the sectoral structure of the portfolio should be determined in advance and be part of your investment strategy. The portfolio will include companies from specific economic sectors, but which sectors and what maximum weight these sectors will have in the investment portfolio?

Investors need to understand the current and future macroeconomic context to decide on the weight of sectors in the portfolio. Which specific economic sectors will feel better or worse, or remain neutral under given conditions? As you understand, all of this is linked to your investment strategy and risk and return tolerance.

How to Properly Select Company Stocks for Your Portfolio?

To select stocks or funds for your investment portfolio, investors need to establish a set of criteria for stock selection. What specific parameters will be involved in the selection?

For example, these could be: market capitalization, country, PE Ratio, EV/EBITDA, Debt/Equity, ROE, Sector, Beta, Gross Margin, Payout Ratio. Depending on these parameters, you'll need to set up a stock screener and select the required number of assets for further detailed analysis.

Investors also need to remember that depending on the investment strategy, parameters for selecting stocks may change. Perhaps the portfolio will include not only stocks but also funds (ETF/Mutual Funds), rules established by the investor, depending on what exactly they want to achieve in the end, be it a "rocket" or a "locomotive," or a "reliable off-road vehicle" (figuratively speaking)!


You can find out more about investing in the US and European stock market on the main page of our website. Please make a request for a consultation on the service Investing in the US and European stock market, and our managers will contact you at the next working time!


See the price of services on the page - Prices for services

Investing in stocks and funds
Investing in stocks and funds
Investing in the US and European stock market
Investment in long-term investment strategies
Analytics and services for investors, Kyiv, Ukraine!
Long-term Investment Strategies (US, EU, Global Equity)

Long-term Investment Strategies (US, EU, Global Equity)

We create advanced long-term strategies for our clients aimed at real portfolio profitability and risk minimization!

Modern approach, analytics and market research

Modern approach, analytics and market research

Advanced Portfolio Asset Analysis is a combination of fundamental approach and quantitative portfolio risk analysis.

Why is investing in the USA profitable and reliable?

Modern financial markets in the United States are the most developed and reliable, offering ample opportunities for investing, obtaining stable profits and capital growth. Trillions of dollars are invested in the US market annually, and the historical return including dividends is about 10.88% per annum (Index S&P500), and in some sectors of the economy the return is more than 24% per annum.

Investing in US stocks and funds is the most liquid and reliable, since a huge number of investors sell and buy securities (stocks, ETFs, REITs, bonds) and other financial assets every day.

What assets are best to invest in (invest money) in the USA?

For independent, that is, individual investing, the best assets are company shares (common and preferred), ETFs, and broad market index funds. Also, on a long-term basis, investors can invest in highly liquid traded funds of well-known US investment giants such as BlackRock, Fidelity, Vanguard and others.

How to invest money in the USA correctly and not lose capital?

The core principle of truly successful investing is prudent diversification based on a strategic capital structure and risk tolerance, as well as an asset allocation to priority sectors of the US economy. At the same time, an individual investment strategy can be set to minimal, moderate, or high risk, as well as have a correspondingly minimal, moderate, or high expected return of the entire portfolio over the medium- and long-term investment horizon.

FAQs - Frequently Asked Questions

1. What is Private Wealth Management (PWM)?

This is a set of professional services related to the management of assets of wealthy individuals, aimed at achieving their financial goals. This range of services may include financial and tax planning, portfolio management, risk management, investment strategy development, legal and tax advice, and other financial services.

Wealth management involves taking into account the individual financial, legal, family and other characteristics and circumstances of the client. Typically, the approach is based on the client's financial goals, investment horizon, risk tolerance, as well as special circumstances and requirements.

2. What do we do for our clients, what is our specialization?

The specialization of IQ Smart Capital is revealed in the development of unique investment strategies aimed at obtaining expected returns using quantitative methods of risk diversification.

Our strategies are a combination of active and passive management methods, based on quantitative methods of capital allocation and portfolio parameters. Our main goal is to generate income and get a positive Alpha for the client!

3. How does IQ Smart Capital deliver value to its clients?

IQ Smart Capital creates value for its clients through planning, developing and maintaining a system of up-to-date asset data for the client's portfolio, including risk parameters, profitability, economic historical and forecast metrics, such as SGR, Exp.Growth EPS, EVA, etc.

If certain parameters and metrics can be calculated, then they can be managed. In other words, we help our clients make smart investment decisions!

4. How to become a long-term client of IQ Smart Capital?

Before starting our cooperation, we recommend you to order a free consultation of a general nature to clarify financial, legal, family and other important circumstances. In order to become a client of the company, it is necessary to fill out the (1) Investor Profile Questionnaire (Investor Profile.PDF), (2) the Risk Tolerance Questionnaire (Risk Tolerance.PDF) presented on our website.

Then, after consultations and financial planning, it is necessary to clearly formulate the goals, the investment horizon, your expectations regarding the return on the investment portfolio. Subsequently, on the basis of this, the investor will need to make a decision regarding the specific list of assets that will comprise his portfolio.

5. Who can become a client of IQ Smart Capital?

The company's client can be novice or experienced investors who have the status of a qualified investor, who have reached the age of majority, who are not a citizen or tax resident of the United States. Citizens of the Russian Federation and Belarus, politicians, high-ranking officials, high-ranking civil servants cannot be a client of the company.

6. What documents do you need to prepare to conclude an agreement?

To conclude an agreement, it will be necessary to prepare and sign: (1) a copy of the internal passport; (2) a copy of the international passport; (3) a copy of the identification number; (4) an application confirming tax residency; (5) an extract from a brokerage account held in your name; (6) notarized written consent of the spouse (wife) to conclude the contract; (7) a statement confirming the status of a qualified investor.

7. How is a service agreement concluded with IQ Smart Capital?

The service agreement with IQ Smart Capital is concluded in writing and signed by an authorized representative of the company. The contract is signed in four copies (one copy for the client and his spouse, and two copies for the company). Usually a service contract is signed at a personal meeting in the office, but in special cases it is possible to sign the contract at the client's office.

Our Experts

Professional Financial engineering and Risk management of Portfolio investments. Research and Analysis of the stock market, Investment in US and European stocks. Development of Quantitative Investment Strategies, Smart-Beta Strategies and Relative Return Strategies.

Studied investment management and finance at MIM-Kyiv Business School. Studied at Tepper School of Business at Carnegie Mellon University (USA).

Many years of business management experience, entrepreneur with 25 years of experience. He has an MBA degree from Business School MIM-Kyiv, Master of Laws, specialist in financial and banking law.

Zair Iusupov

CEO and Chief Investment Strategist

Private Wealth Management, Development of Investment Strategies and Advisory

Useful information on the section

Investing in US stocks, how to start investing in the stock market?

How to Invest in US and European Stocks to Meet Individual Needs?

Investing in US and European stocks is a key element of diversifying an investment portfolio that reflects the individual needs of each investor. To successfully start investing in stocks, several key steps should be followed. First, determine your investment goals and risk tolerance. This will help you select appropriate stocks and investment strategies. For beginners, it is recommended to start with a diversified portfolio that includes stocks of large companies such as Apple Inc. (AAPL), Inc. (AMZN), Microsoft Corporation (MSFT), Alphabet Inc. (GOOGL), and Facebook, Inc. (FB). Next, conduct market research and select companies with strong financial indicators, stable growth, and innovative potential. Carefully consider macroeconomic and geopolitical factors that may affect the stock market. Once you have identified suitable stocks, create an investment plan that considers your financial situation, goals, and timelines. Don't forget the importance of regularly monitoring your portfolio and adjusting your strategy according to market changes and your goals. Investing in US and European stocks to meet individual needs requires careful analysis and selection of appropriate strategies to ensure long-term growth and financial stability.

Investing in shares, where to start (consultations in Kyiv, Ukraine)

How to Optimize Investment Portfolio Considering Your Risk Level?

Optimizing an investment portfolio plays a crucial role in achieving desired financial goals with minimum risk. To successfully optimize your portfolio, several key aspects should be considered. First, determine your risk level and investment horizon. This will help you select suitable assets and investment strategies. For those who prefer more conservative investments, it is recommended to include more bonds and dividend-paying stocks such as Coca-Cola Co. (KO), Procter & Gamble Co. (PG), and Johnson & Johnson (JNJ). Next, create a diversified portfolio that includes various asset classes such as stocks, bonds, real estate, and alternative investments. This will help reduce risk and ensure stable income regardless of market conditions. Additionally, regularly review and rebalance your portfolio, taking into account market changes and your goals. Don't forget the importance of diversification and portfolio rebalancing to maintain an optimal risk-return ratio. Optimizing an investment portfolio considering your risk level is an important step towards achieving financial stability and profitability in the long run.

Stages of investing in the stock market, Kyiv, Ukraine!

Information Support and Monitoring of Investment Portfolio

Information support and monitoring of an investment portfolio are key elements of successful investment management. To effectively control your portfolio and achieve your financial goals, several key steps should be taken. First, use reliable sources of information to obtain up-to-date data on the market and financial instruments. Use news resources, analytical reports, and trading platforms to get relevant information about companies and market events. Next, establish a portfolio monitoring system that allows you to track its performance and respond to market changes. Use technical and fundamental indicators to evaluate assets and make informed investment decisions. Additionally, regularly update your knowledge and skills in investment to stay informed about the latest trends and developments in the market. Participate in seminars, webinars, and educational programs to expand your knowledge and improve your investment skills. Information support and monitoring of an investment portfolio help investors make informed decisions and achieve their financial goals in the stock market.