Benefits of international investing and why to invest in US stocks from India
Among the Indian investment community, interest in buying US stocks seems to have increased of late. The US stock market is the world’s largest investment market with easy access to the global investment community.
From individual stocks to exchange traded funds across a range of indices and themes, the US stock market offers enormous opportunities for investors around the world. Indian investors who own Indian stocks also have the opportunity to own some of the world’s largest blue-chip stocks present here in India.
Here are some key benefits for those looking to buy US stocks.
The US stock market offers the greatest opportunity for Indian investors to diversify their national portfolio among some of the world’s leading technology, internet, pharmacy, and manufacturing companies, among others. Investing only in one economy exposes them to country risk. There are several micro and macro economic geopolitical factors that have an impact on a country’s economy. In the event of internal economic and political conflicts in the country, the portfolio remains exposed to concentrated risk. In order to minimize risk and maximize return potential, you need to diversify your investment portfolio. Diversification between asset classes, market capitalization, etc. is incomplete unless you diversify geographically.
Rupee-dollar exchange rate
As historical data shows, the Indian rupee has fallen against the US dollar and the possibility of further slipping exists. The rupee-to-dollar exchange rate plays a role in the returns you generate on international stocks. Any depreciation of the rupee against the dollar helps increase returns if dollar-denominated assets such as US stocks gain. Even if international stocks underperform or remain stagnant, you win if the rupee falls against the dollar.
Unlike India, you can own US stocks even in fractions. After all, buying Amazon stocks that are trading near $ 3,290 may not be affordable for everyone, as you need around Rs 2.43 lakh to own a single stock. However, you can own a part by investing even a small amount of Rs 5,000 or even less. Over time, you can accumulate more or build a portfolio of US stocks with limited funds.
The process of investing in US stocks from India is simple, easy and quick. You can buy Nasdaq stocks in India or trade several thousand ETFs and stocks on any other leading index like the S&P 500, Nasdaq 100, Dow 30 indices or the Russell 2000 index.
From tech to pharmaceutical companies and large cap stocks to small cap stocks, the US stock market is home to a wide range of leading global companies. Facebook, Apple, Amazon, Netflix and Google – collectively referred to as FAANG shares wait to be entered as the US stock market shows some weakness. It’s time to accumulate them to build long-term wealth!