Among the Indian investor community, the interest in buying US stocks seems to have gone up in the recent past. The US stock market is the largest in the world of investments with easy access to the global investor community.
From individual stocks to exchange traded funds across a gamut of indices and themes, the US stock market offers huge possibilities for investors globally. Indian investors who are holding Indian stocks also have the opportunity to own some of the biggest global blue-chip stocks sitting here in India.
Here are a few key benefits for those looking to buy US stocks.
The US stock market provides the biggest opportunity to Indian investors to diversify their domestic portfolio among some of the leading global technology, Internet, Pharma and manufacturing companies amongst others. Investing solely in one economy keeps them exposed to country-risk. There are several micro and macro economic Geo-political factors that impact a nation’s economy. In case of any internal economic and political conflicts within the country, the portfolio remains exposed to the concentrated risk. In order to minimize risk and maximize the potential of returns, you need to diversify your investment portfolio. Diversification across asset-class, market capitalization etc is incomplete unless you diversify geographically.
Rupee-Dollar exchange rate
As historical data shows, the Indian Rupee has been falling against the US dollar and the possibility to slide further exists. The rupee-dollar exchange rate plays a role in the returns you generate from international stocks. Any depreciation of rupee against dollar helps in boosting returns if dollar denominated assets such as US stocks gain. Even if international stocks under-perform or remain stagnant, you gain if the rupee falls against the dollar.
Unlike in India, you can own US stocks even in fractions. Afterall buying Amazon shares that trades at nearly $3290 may not be affordable to all as you need almost Rs 2.43 lakh to own a single share. However, you may own a portion by investing even a small sum of Rs 5,000 or even lower. Over time, you can accumulate more or build a portfolio of US stocks with limited funds.
The process to invest in US stocks from India is simple, easy and quick. You can buy Nasdaq stocks from India or trade several thousand of ETFs and stocks on any other leading indexes like S&P 500, Nasdaq 100, Dow 30 indices or the Russell 2000 Index.
From technology to pharmaceutical companies and from large-cap to small-cap stocks, the US stock market has a wide spectrum of top global firms. Facebook, Apple, Amazon, Netflix and Google – collectively referred to as FAANG stocks are waiting to be grabbed as the US stock market is showing some weakness. Time to accumulate them for long term wealth creation!