As a British investor, the primary place I take into consideration when shopping for shares is the London Inventory Change. Over the previous 5 years, the flagship FTSE 100 index has gone up 12%. Not unhealthy. Then once more, not that good.

In any case, throughout the pond, the S&P 500 index has soared 91% throughout the identical interval. Positive, that index has benefitted from sturdy efficiency by a number of particular tech shares. However even the Dow Jones Industrial Common – a more in-depth equal to the Footsie by way of the combination of corporations – is up 57% in that interval.

That provides me pause to thought. As an investor from Blighty, ought I to be shopping for extra shares within the S&P 500? I feel there are some good causes for me to contemplate it — but in addition some counterarguments.

Right here is one professional and one con I see on the subject of me shopping for into S&P 500 shares.

Going the place the large development alternatives are

This week noticed sturdy outcomes from UK software program group Sage, sending its share price hovering. However that additionally acquired me eager about how few choices there are as an investor trying to purchase into giant tech corporations on the London market.

Sage is a tech firm — however not precisely on the chopping fringe of market development alternatives. It provides accountancy software program to small- and medium-sized companies. Even after its sturdy efficiency this week, the corporate’s market capitalisation is beneath £13bn.

Nonetheless, an investor who purchased into Sage 5 years in the past can be sitting on a 74% return.

However examine that to a tech share I personal from the S&P 500, particularly Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).

Its market-cap is over $2trn (round £1.6trn). Over 5 years, Alphabet’s efficiency has trounced that of Sage. The Alphabet share price has soared 159% in that interval.

These are simply two examples, however I feel they level to a bigger conclusion. The S&P 500 is stuffed stuffed with tech shares I feel are on the chopping fringe of innovation.

Alphabet has a money cow within the type of its search enterprise, although I see a danger of market share loss to platforms like TikTok in addition to regulatory issues, maybe finally forcing a breakup of the group.

However it’s also concerned in a bunch of different areas, from its personal brief type video rival to TikTok (on YouTube) to self-driving autos and balloon-based Web connectivity.

Such a breadth of tech innovation from a big, confirmed enterprise is just far simpler to search out amongst S&P 500 members than on the London trade.

Investing like Warren Buffett

However as British retailers from Tesco to Marks and Spencer have discovered to their expense, the US generally is a tough market to crack.

Companies like Alphabet are US-based multinationals. So I feel investing in them advantages from an understanding of the US market, from its regulatory setting to Stateside accounting ideas.

Like Warren Buffett, I like to stay to what I can perceive when shopping for shares. So whereas I’m prepared to put money into some S&P 500 enterprises, my consolation zone is trying to find bargains out there I finest perceive.

Thankfully, proper now, I feel quite a lot of UK shares are extra attractively valued than their US counterparts!