For first-time investors looking to build wealth, the search for where to begin can be daunting. With thousands of global equities, dozens of developed and emerging markets, and an endless stream of financial headlines, it is easy to get overwhelmed. But despite the noise, one answer remains surprisingly simple: start in the United States.
The American stock market offers something unmatched by any other in the world; scale, transparency, liquidity, and long-term performance. For those just getting started, it remains the gold standard.
The backbone of this dominance is the S&P 500, an index tracking five hundred of the country’s largest public companies. Since its inception in 1957, the S&P 500 has returned an average of 10.3 percent annually through 2023, according to data from NYU’s Stern School of Business. This includes recessions, wars, inflation spikes, and financial crises. Few other asset classes, and even fewer countries, have matched that consistency.
By contrast, MSCI’s All Country World Index excluding the U.S. has returned just 6.7 percent annually over the past twenty years, with far greater volatility. Markets in regions like Latin America, Eastern Europe, and Asia offer occasional bursts of growth, but are often hampered by political risk, currency instability, or weak corporate governance. China’s CSI 300 index, despite representing the country’s top stocks, has returned just 4.4 percent annually since 2010, with frequent government crackdowns sending shockwaves through entire sectors.
Then there is liquidity. The U.S. accounts for roughly 60 percent of global equity market capitalization, according to the World Federation of Exchanges. It is not just the largest market, it is also the most traded, the most regulated, and the most watched. For beginners, this means fewer surprises, better price execution, and tighter spreads. You are not placing a bet in a back alley. You are participating in the most transparent marketplace in the world.
That transparency is reinforced by the depth of financial disclosures and investor protections. U.S. public companies are required to file quarterly and annual reports with the Securities and Exchange Commission, including detailed income statements, risk factors, and executive compensation. Shareholders have rights enshrined in law, and independent analysts monitor corporate behavior closely. In contrast, markets in countries like Turkey, Russia, or even Italy often lack timely reporting, standardized accounting practices, or predictable regulatory enforcement.
And then there is the matter of access. The U.S. pioneered the modern exchange-traded fund, and now boasts more than 3,000 ETFs covering everything from broad indexes to niche sectors. For new investors, this means instant diversification with low fees. Vanguard’s S&P 500 ETF (VOO), for example, charges just 0.03 percent annually, three cents for every $100 invested. Comparable products in other countries often come with higher costs, lower liquidity, and narrower exposure.
What about emerging markets? They are compelling, to be sure. But a 2021 study from Morningstar found that emerging-market funds posted average annual returns of just 5.6 percent over the prior decade, compared to 14.3 percent for U.S. large-cap blend funds. The added volatility, currency exposure, and political interference made them a difficult starting point for those without experience or the stomach for sudden swings.
Even long-term investors benefit from staying close to the U.S. core. A study by Dimensional Fund Advisors found that U.S. markets outperformed international developed markets in 78 percent of all rolling 10-year periods since 1970. That is not luck. It is a reflection of the country's economic resilience, innovation pipeline, and deep capital markets.
Critically, the U.S. is also home to the most influential companies in the world. The top ten global firms by market capitalization, including Apple, Microsoft, Amazon, and Nvidia, are all based in the United States. They generate revenue worldwide, but trade under American regulation. Investing in the U.S. is not about ignoring global growth. It is about accessing it through the companies best positioned to capture it.
Of course, no market is without risk. The U.S. faces fiscal pressures, political polarization, and an aging population. But it has also shown an unmatched ability to adapt. Whether it was the dot-com bust, the 2008 financial crisis, or the COVID shock, the U.S. market has absorbed blows and kept compounding.
For beginners, that resilience is everything. Your first investments should not be about taking big risks. They should be about building confidence, learning discipline, and letting time do its work. The United States, with its rule of law, culture of innovation, and proven returns, offers the most stable ground to take that first step.
As the global economy grows more complex, one truth has remained simple: capital flows toward strength. And when it comes to investing, strength still starts in the United States.
