For the last decade or so, investors have not needed to look any further than our neighbours across the pond for decent returns on their money.

The S&P 500, the main US stock market, returned 331 per cent in the ten years to the end of October 2025 when you include dividends, according to the data company Morningstar. This compares with just 124 per cent for the UK’s equivalent, the FTSE 100. The US has been boosted by exciting tech stocks and household names — from Apple to Amazon, Netflix to Nike — and more recently, the artificial intelligence wave.

However, the decision may be less simple today — the political backdrop is uncertain and the same jazzy tech stocks that fuelled years of growth are now seen as overpriced and even “bubble”-worthy — but it would probably be unwise to ignore the world’s largest economy altogether.

So if you haven’t already made the leap into US stocks, what’s the best way to get started? Here’s what you need to know.

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Despite questions over the future performance of the US stock market, it is still a good time to invest in the US. “It remains home to world-class innovation and deep capital markets, and company earnings are robust,” said Darius McDermott from the fund ratings agency FundCalibre. “Maybe we are in bubble territory, but there is probably still money to be made.”

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The dominance of American businesses in your life also cannot be ignored. You probably have an iPhone (and other Apple devices), you shop regularly on Amazon, use Microsoft Office every day, drink Coca-Cola and watch the latest Disney films and TV series.

The USA has the biggest economy in the world, and also has the biggest and deepest stock market. American companies account for more than 70 per cent of all firms listed on global stock markets. UK firms account for less than 4 per cent.

It’s also unwise to try to time a stock market crash or recovery. Long-term investors often consider “time in the market” as a better bet to “timing the market”. If you avoid the US and the so-called bubble continues for another year, you may have missed out on double-digit returns.

As McDermott said: “US shares are undeniably expensive by historical standards, but I said the same thing a year ago, and since then the S&P 500 has returned 18 per cent.”

In the face of high valuations and rocky forecasts, the first thing to do is check your exposure. While it might be unwise to ignore the US completely, you also don’t want to be overexposed to any market — particularly if you have concerns over its future performance.

Your investment platform should have a tool that allows you to see exactly how your portfolio is allocated. Jason Hollands from the wealth manager Evelyn Partners said US equity exposure should range from about 10 per cent of a cautious portfolio to 45 per cent for riskier, equity-focused portfolios.

Diversification, where you invest across a range of asset classes and countries, is often considered the best way to ride out the ups and downs of the stock market. If the US market does take a downturn, other parts of your portfolio can do the heavy lifting while it recovers.

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If you want to invest more money in the US market, consider doing so gradually. “That way, you have some dry powder if there is a sell-off,” said Laith Khalaf from the investment firm AJ Bell.

And while there are concerns over the US market, there is also much to be excited about. Consumption accounts for close to 70 per cent of the US’s economy, and US consumers have been resilient in the face of higher rates, sticky inflation and the uncertainty that has come from President Trump’s administration.

It is also clear that US companies are going to be the first and biggest winners from the rise of artificial intelligence. Carly Moorhouse from the advice firm Quilter Cheviot said: “Having just spent ten days in the US meeting fund managers, there was a clear message — the AI story is real, and we are at the beginning of one of the biggest transitions in our lifetime.

“It probably doesn’t feel like that right now for the average person who is using ChatGPT to build a holiday itinerary, but that is because we are in the build-out phase.”

The easiest way to put money in the US stock market is through a low-cost index-tracking fund. These funds do not cherry pick stocks, but instead give you the return of an index, such as the S&P 500.

The Fidelity Index US fund charges 0.15 per cent a year, and the HSBC American Index fund charges 0.06 per cent a year. You can invest in these through most big investment platforms, such as Hargreaves Lansdown, AJ Bell and Interactive Investor.

If you want to spread your investment a bit more consider a global index tracker fund. The Vanguard FTSE All-World exchange-traded fund (ETF) has about 64 per cent of its portfolio in US stocks. Make sure you don’t accidentally double up by owning a global fund and a US fund.

You could opt for an active fund instead, which are usually more expensive and run by stockpickers who will make decisions about which parts of the market look attractive and what to avoid.

McDermott suggests AXA Framlington American Growth — a consistently strong performer which has returned 351 per cent over ten years — and Comgest Growth America. Moorhouse likes TD Epoch US Quality Capital Reinvestment, which invests in about eighty mid-sized companies that the managers think will deliver sustainable returns.

Investing in funds is easy through your stocks and shares Isa, self-invested personal pension (Sipp) or a general investment account. Search for the fund you want and hit the “buy” button. Make sure to check the fees charged by a fund.

You could also choose your own stocks, but think about whether you have the time, knowledge and desire to keep track of company accounts and results. Opting for single stocks tends to be more risky as you will have less diversification in your portfolio.

If you do want to pick your own stocks, you are in luck: the US has a vast array of world-leading firms. Companies such as Nvidia are leading the AI race, Apple sold more than 230 million smartphones worldwide last year and Coca-Cola is sold in every country in the world except for Russia, Cuba and North Korea.

Mark Nelson from the wealth manager Killik & Co rates TJX Companies. You might not recognise the name, but it is the retail giant behind TK Maxx stores. It also runs TJ Maxx and Marshalls in the US, Winners and Marshalls in Canada and the homeware brands HomeGoods and Homesense.

He said: “TJX is relatively well positioned to navigate a challenging economic backdrop and any supply chain disruptions related to trade disputes. Historically, same-store sales at the company have been extremely consistent through a range of economic environments.”

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Lesser known stock tips from Nelson include Waste Management — a US-based waste collector and disposer which has increased its dividends for 21 consecutive years — and Xylem, a technology company aiming to solve the problems facing the global water industry.

Nelson said: “Waste Management is the industry leader in the sector. With approximately two thirds of its revenue recurring, it exerts significant pricing power with annual price increases of 4 per cent over the past decade.

“And despite covering 70 per cent of the world’s surface, water is increasingly scarce. Xylem’s unrivalled scale, reputation and broad portfolio of products mean it is a strong competitor in an $80 billion market.”

You can buy US shares through your usual account, such as an Isa or Sipp, and the trading costs are usually the same as buying UK shares. One extra cost to bear in mind is foreign exchange fees, which will be charged when you buy or sell, and when any dividends are paid and need to be converted into sterling.

To buy US stocks, you will also need to fill in your name, address and investment account number on a form called W-8BEN, which you can find on your investment firm’s website. The US government charges a 30 per cent tax on dividend income received by non-US residents from US investments. Filling out the form reduces this to 15 per cent.

Currency movements have a big influence on your returns when investing in overseas stocks.

If you invest in an S&P 500 tracker, for example, your money is held in dollars but converted back to sterling before it is valued or when you sell. If the value of the dollar increases against the pound, you make more (or lose less) money. If the value of the dollar decreases versus the pound, you make less (or lose more) money.

UK investors have benefited from a strong US dollar over the past decade. This might reverse if the dollar is now overvalued. But currencies are notoriously difficult to trade and tend to average out over long time frames, so it is best not to base investment decisions on what you think the dollar will do.