By Shripal Shah
Many Indians who had planned to delight in an overseas vacation final summer season got a rude shock in March final year, when an uncontrollable virus wrecked their travel plans. Little did they know that the virus would not cease at that, but would go on to enforce extended lockdowns, movement restrictions, and radically modify the way they consume, work and interact.
While the Covid-19 pandemic might have unleashed unprecedented challenges unto humanity, it hasn’t been all gloom and doom. The year 2020 will be remembered as the year that accelerated our transition to the digital, virtual globe.
The virus forced us to shut our doors and remain indoors, but it has not been in a position to curtail our minds, our dreams and most importantly our aspirations. By merely tapping on our handheld devices, we have been in a position to handle our lives seamlessly, be it ordering goods, connecting with good friends and loved ones, generating payments, watching films, or even managing our investments.
With the government and the Reserve Bank of India (RBI) taking different fiscal and monetary measures to help the economy, dollars provide in the economy improved, and interest prices lowered drastically. During this period, asset classes like true estate and bank FDs became much less eye-catching and secure haven like gold and silver, as nicely as monetary assets like direct equities, became the most favoured asset classes to invest amongst Indians.
We saw a phenomenal surge in the quantity of new investors flocking into the Indian stock markets in 2020. A comparable phenomenon was witnessed worldwide, like the US, which as well saw an influx of investors. This was additional propelled by new fintech players like Robinhood. Back property in India, investors had been watching the worldwide trends with keen interest and had been excited to participate in the globe industry. Seeing the increasing interest, numerous players in India along with fintech players also enabled and created worldwide investment less complicated for Indians.
Time for worldwide flavours
The year 2020 has shown us how some of the largest tech giants – Facebook, Apple, Amazon, Netflix and Google – have grow to be increasingly integral to the lives of urban, aspirational Indians. Recently Tesla announced next year they would launch of their new car or truck in India, which also caught the fancy of numerous car or truck enthusiasts.
The query is – Why cease at becoming just passive customers? Why not invest and participate in the development stories of these quite worldwide brands that have now grow to be household names for us?
With numerous Indian brokerage firms providing worldwide investing platforms via tie-ups with overseas brokers, investing in your favourite worldwide brands is now effortless and hassle-no cost.
The US continues to be the most potent financial engine of the worldwide economy. The US stock markets alone dominate more than 50% of the worldwide stock industry capitalisation. It is also property to numerous of the world’s top innovators and technologies organizations. By accessing the US stock markets, you can tap into a vast spectrum of investment possibilities.
If you consume and like the goods and services of worldwide organizations like Facebook, Apple, Google, Netflix, Amazon and so forth. why not invest in them? With worldwide investing, you get a likelihood to invest in worldwide brands that you have closely interacted with as a customer. These organizations have generated phenomenal returns for the investors till now.
Global investing also makes it possible for you the chance to expand your investment horizons and delight in the rewards of diversification. It lowers the nation-precise danger that your domestic stock portfolio bears. Besides diversification in terms of markets, worldwide investing also gives you a likelihood to have a worldwide currency portfolio. By possessing dollar-denominated investments as nicely, you reduce the dangers of possessing an completely rupee-denominated investment portfolio. In truth, with the current weakening of the US dollar against most of the currencies like Indian Rupee, investors can now get to acquire the dollar at reduce prices.
Slow & Steady
While worldwide investing gives numerous eye-catching possibilities, it is also crucial to adhere to an optimal allocation technique basis your danger profile. The very best and the safest way is to commence smaller, and invest fixed amounts on a period basis.
In truth, worldwide investing platforms now enable you to acquire even fractional shares. You could even commence an SIP and invest smaller amounts in your favourite worldwide brands. While worldwide investing gives you the likelihood to invest in your favourite worldwide brands, it is also crucial that you back your investment choices with correct study and due diligence. For optimal investment outcomes, invest with a lengthy-term horizon of at least 3-5 years.
If foreign travel, foreign education, acquiring overseas true estate are on your thoughts, then worldwide investing can be the excellent car that aligns with your monetary ambitions and worldwide aspirations.
(The author is the President – Head Operations, Finance and Technology at Kotak Securities. The views and opinion expressed in the column are private. Please seek advice from your investment advisor just before investing.)