Moving to America, living in the Big Apple, and making money in US dollars – is an aspiration of millions of Indians.
While moving to America may not be possible for everyone, one thing is definite, you can make money in US dollars from anywhere in the world with just one tap! How? By investing in US stock markets, you can invest in dollars and watch your money grow greener.
The US stock exchange is the world’s largest investment market in the world. It offers tremendous opportunities for growth and allows investors from across the globe to invest in selected securities, stocks, and ETFs across indices.
Indian investors who hold Indian stocks have the option to own some of the world’s most extensive blue-chip reserves located in India.
Let’s look at some reasons you should invest in the US stock market while building a portfolio.
Geographic diversity
All of the key US stock exchanges have companies listed worldwide, making it a potential investment destination. Investing in the US share market diversifies your financial portfolio while investing in worldwide companies.
A national emergency could lower the rating. The effect, however, would be negligible. On the other hand, Indian firms dominate Indian indexes. Even minor unrest in the nation might send the indexes crashing.
The American stock market is varied and robust in times of adversity. However, in India, this is not the case.
Asset-based diversification, industry-based diversification, time-based diversification, and geography-based diversification are the four core tenets of diversification.
Whereas most investors are good at asset, industry, and temporal diversity, most investors’ portfolios lack geographic diversification. Your holdings are not confined to a single location when you use a geography-based diversification approach.
Benefits of Investing in the US Stock Market
Participating in the largest stock market
The equity market in the United States is the largest in the world. The US financial markets accounted for 54.5 percent of worldwide stock market value as of December 2021.
As of March 2022, the New York Stock Exchange (NYSE), the world’s largest stock exchange, had a market capitalization of about $27.69 trillion.
US Stock Market Timing
Being a part of global companies
Some of the brands we use daily, such as Facebook (now Meta), Apple, Google, Amazon, and others, are publicly traded in the United States.
In addition to these global giants, you can also buy shares in new firms in industries that are bound to expand across the globe, such as AI technologies, cloud-based services, and electric cars.
Investing in firms or ETFs registered on the US securities exchange can provide exposure to these areas.
Better potential results
The US equity market has a higher return than the Indian share market. The NYSE lists companies from all over the world and those from the United States.
Investments in US stocks can help you get a good return on your money because global corporations are there, and the return you receive will be high due to various factors.
Access to fractional investing
Unlike India, you can hold US stocks in fractions. After all, buying a single Google share is out of range for most individuals.
You can own a part of the company for as little as Rs 1,000 or even less. You can acquire more or build a portfolio of US shares over time if you only have a certain amount of money.
Currency gains
According to historical data, the Indian Rupee has been losing value against the US dollar, and there is a probability that this trend may continue.
The rupee-to-dollar exchange rate influences the profit you make from foreign equities. Any weakening of the rupee helps to boost profits if dollar-denominated investments such as US shares appreciate.
Even if global markets are disappointed or remain steady, you benefit if the rupee falls against the dollar.
Apart from these worldly benefits, one also has a few psychological benefits associated with such investments. Such investments help fulfill your aspirations and goals conveniently.
We all have ambitions to study, travel, or even live overseas worldwide. When you invest in the stock markets of the United States, you are trading in US dollars, so you may effortlessly save for all of these worldwide goals without having to worry about currency risk.
Investing in US equities from India is easy, straightforward, and rapid. You can purchase Nasdaq stocks or trade thousands of ETFs and stocks on other top indexes such as the S&P 500, Nasdaq 100, Dow 30 or Russell 2000 Index from India.
The US stock market contains a diverse range of top worldwide corporations, from technology to pharmaceuticals and from large-cap to small-cap equities.
The FAANG stocks – Facebook, Apple, Amazon, Netflix, and Google – are ready to be bought now that the US share market is showing weakness. It’s time to start accumulating them to build long-term riches!
FAQs
Why should I invest in the US stock market as an Indian investor?
Investing in the US stock market offers geographic diversity, access to global companies, better potential results, fractional investing, and currency gains, providing opportunities for growth and diversification.
What are the advantages of geographic diversification in the US stock market?
Geographic diversification allows you to invest in companies listed worldwide, reducing risk by not being confined to a single location and providing exposure to a variety of markets and economies.
How can investing in the US stock market give me exposure to global companies?
Many global giants, such as Facebook (now Meta), Apple, Google, and Amazon, are publicly traded in the US. Additionally, investing in US securities exchanges allows access to emerging industries like AI technologies, cloud-based services, and electric cars.
