Invest in US stocks from India: There are a plethora of possibilities for an Indian investor to invest in the US stocks. From the old-economy stocks and sectors to the new-age corporations, an Indian investor has some of the most effective international stocks to add to one’s portfolio. By investing in major US corporations, there’s an benefit of international diversification that one particular is capable to bring into one’s portfolio.
In addition to person stocks, there are IPOs, ETFs readily available on US stock exchanges to invest and reap lengthy-term added benefits from them. So, how ought to an investor from India, who desires to invest for the very first time in the US stocks, start deciding on investments? “A nice way to diversify is to look at a wider range of ETFs. There are commodity-focused ETFs, Asia-focused ETFs, sectoral ETFs and a wide variety of thematic portfolios available on Stockal which are great for diversification,” says Sitashwa Srivastava, Founder and CEO, Stockal, an international investing platform.
One can open a US brokerage account with a international stock trading platform and get started trading in the US stocks from India. For a newbie, it is also far better to stick to index stocks which are huge-cap in nature. The 3 major US indices – Dow Jones Industrial Average (Dow), S&P 500 and Nasdaq one hundred – represent a big chunk of the favourite US stocks for international investors with billions of dollars in marketplace capitalisation.
Before selecting stocks from any of these indices, here’s a primer. S&P 500 is thought of to be the prime-most single indicator of huge-cap US stocks and incorporates practically 500 major corporates across 11 sectors and covers about 80 per cent of the marketplace capitalisation of the US stock exchanges.
The Nasdaq one hundred is a huge-cap index and incorporates one particular of the biggest domestic and international non-monetary corporations listed on the Nasdaq Stock Market primarily based on marketplace capitalization. Some of the world’s most revolutionary corporations such as Apple, Microsoft, Starbucks, Google, Intel, and Tesla are listed on Nasdaq one hundred.
On the other hand, the Dow Jones consists of prime 30 blue-chip corporations but as opposed to some of the major indices, it represents corporations that are only primarily based in the US.
But, the functionality of these 3 indices may perhaps not be necessarily in-line with every single other. Over most periods, there will be a divergence among Dow, S&P 500 and Nasdaq one hundred indices. This is how Dow, S&P 500 and Nasdaq one hundred have moved in 2020 till date – 6 per cent, 14.6 per cent and 45 per cent, respectively.
The divergence in S&P 500 and Nasdaq one hundred was not prominently noticeable more than the preceding handful of years as it can be noticed now. “There is a divergence between S&P 500 and NASDAQ because S&P 500 has many non-tech companies, which tend to be less volatile. So people who are looking for more broad-based and low volatility exposure should go for S&P 500 and people who are comfortable with higher volatility and more bullish on technology companies leading the world forward, should probably look at investing in NASDAQ,” says Sitashwa Srivastava, Founder and CEO, Stockal, an international investing platform.
The chart under shows how the break-totally free momentum in new age stocks has taken the Nasdaq one hundred index to a new zone altogether specially immediately after the pandemic fall of March.
(Source: Tradingeconomics.com As on December 28, 2020)
Even whilst the international economy is nonetheless not out-of-the woods and the complete financial effect of the coronavirus vaccine is however to be noticed, the international financial transformation is currently underway. The customer preferences are believed to see a modify and even the manner in which corporates conduct enterprise is anticipated to witness some massive alterations in the years ahead. No wonder, FAANG stocks have been at the frontline of the pull-back due to the fact the lows of March 2020.
If you believe you are missing on the action in the US stocks, steer clear of any additional procrastination. Opening an international trading account is easy and effortless from India and aids you to diversify your portfolio across geographies. As an Indian investor hunting to invest in the US stocks, the new leader stocks of Nasdaq one hundred can be a fantastic beginning point. Some of the major stocks in Dow 30 and S&P 500 may perhaps also be added for additional diversification. A tinge of US stocks in your Indian stock portfolio can provide you with more steady returns with appropriate diversification across industries, stocks and markets.