The US is home to 68% of the top 500 global businesses on our planet. You may be living in India, but products and services from US firms already influence your life. Are you noticing the outburst of iPhone users in India lately? Or the consistent popping up of KFC & Mcdonald’s in new locations? That’s due to the brand loyalty top US companies enjoy globally.
The US has been a stable and mature economy for decades now. The ease of doing business in the US is on the next level. So it only makes sense that US companies are everywhere in the world. And thus, it also makes sense to invest in them. Stay tuned to know how can Indian invest in us stocks.
5 Reasons Why You Should Invest in US Stocks from India
The US stock market needs no introduction. It has been the world’s biggest stock market for almost a century. With that being said, let’s explore the top 5 reasons why Indians should invest in the US stock market.
#1 Investing in Monopolies
Investment in monopoly businesses is the best way to be a part of the growth story of a certain sector. While in India, we have got a few monopolies of our own, but none of them can come close to US monopoly companies.
From Google to Amazon, almost all the world’s leading monopoly businesses are listed in the US stock exchanges. If you made a $1000 investment in Amazon back in 2001, it would be close to $1,50,000 at the current valuation. That’s the power of monopoly businesses.
#2 Geographical Diversification
Investment in the stock market often comes with a number of risks. Diversification is the key to risk mitigation. One such risk is country risk. It happens when an investor puts all of his money in a particular country.
Investing in the US from India can help you mitigate country risk. Tomorrow, if some adverse political or economic events occur in India, you’ll be somewhat at peace knowing that a part of your portfolio will never get affected.
#3 Being a Part of the US Growth Story
The US market is filled with big blue chip stocks. While India has its fair share of blue chip companies like Reliance & TCS, they are belittled like trillion-dollar giant Apple in front of their US counterparts. How did these companies grow so big, you wonder? Well, that’s the US growth story.
Since 1957, the S&P 500 has given an annual return of around 11.7%. It signifies the growth aspects of the US economy, where there is still a sizable growth lift in rising sectors. Investment in US stocks exposes you to sectors such as electric mobility, AI & ML, and robotics.
#4 Gains from Rupee Depreciation
It’s no secret that the Indian Rupee (INR) has been performing badly against the US Dollar (USD) for some time now. In the last 5 years, INR has depreciated more than 15% against the USD. US stock investment presents us Indians with a unique opportunity to encash on Rupee depreciation.
When you invest in US stocks, your investments are made in dollar denomination. Suppose you made a $100 investment when 1 USD = 75 INR. Now you are encashing the investment when 1 USD = 80 INR. You’ll get a return of Rs 8,000 against an investment of Rs 7,500 if the investment value stays the same.
#5 Buying in Fraction
The US market is often highlighted for its FAANG stocks. All of which cost more than $110 at current pricing. That’s like Rs 8,500 for a single stock. And if you want to buy a single stock of Berkshire Hathaway, the Warren Buffet company, you have to shell out a whopping 3.35 crore Rs.
If you’re a small retail investor with limited capital, the US stock market gives you an opportunity to buy its elite stocks in fractions. That means you can buy fractional shares for as low as Rs 5,000. Now that’s what we call convenience.
Now that you’ve learned the benefits of investment in Amazon and other US stocks, you must be wondering how to invest in US stocks. Let’s discuss it in our next segment.
How Can Indian Invest in US Stocks
Indians are spoiled with choices when it comes to ways of investing in US stocks. The predominant methods are the following three:
Direct buying of stocks through a domestic or international stock broker
Buying units of Mutual Funds that primarily invest in US market
Buying ETFs of US stocks and indices
If you want to get full exposure to US stocks, then the first of the three methods is the one to follow. There are plenty of choices in this regard. But only a handful of them offers the ease and convenience that you deserve.
Stock is one of the leading India-based brokerage firms that provide you access to class-leading stock research tools and curated portfolios. With Stockal’s easy UI, you’ll never feel overwhelmed with data and information. Stockal had made international investments smart, simple, and secure.
As we’re at the fag end of this blog, let us wrap up today by telling you the things you need to do. Stock market investments demand a lot of effort put into research and analysis. Without which, there’s no difference between gambling and investing.
Also, you need to take care of your tax liabilities for income from the US stock market. The tax rate differs for international investments from the ones made in India. So, you have to be careful while filing your tax returns.
And finally, it can be costly to choose US-based brokers to trade in US stocks. Stockal, on the other hand, offers a cost-effective yet prudent solution for your US stock purchase needs. So next time someone asks you how can indian invest in us stocks, make sure you show them your portfolio in Stockal.