How much all of us want to travel the world – the same applies to our opportunities – we need to have them travel the world. That is exactly what global investments do for us. You can invest in stocks all over the world! You just have some brushing up to do in order to get started. But, if you are wondering, can someone really start investing in other countries than your own – the answer to that is a big-time yes. So, let’s get a little deeper into the topic.
Can I Invest in Stocks Abroad?
Investing in foreign stocks allows Indian investors to gain exposure to some of the world’s most valuable and well-known companies, including Microsoft, Apple, Google, Tesla, Amazon, Alibaba, and Netflix, as well as more traditional companies such as Samsung, Saudi Aramco, Visa, LVMH, and Tencent Holdings.
Investing in foreign equities from India is legal, and a sensible allocation to such stocks can be made to diversify your portfolio. The Reserve Bank of India’s (RBI) Liberalized Remittance Scheme (LRS) allows resident Indians to transmit up to ₹2,50,000 each fiscal year for portfolio investments and other approved transactions.
Furthermore, the availability of substantial information, as well as the excellent governance norms of these companies and stock exchanges, enable a greater understanding of your investments. If you want to invest in globally traded equities, here’s how you may do it.
Investing in US stocks
You put all of your questions away – ones like, how to buy US stocks from India? – Because you will find all your answers here. We won’t keep you waiting any longer and just get going to the core part of it.
1. Through Direct Stocks
An investor can invest directly in foreign stocks by opening an overseas trading account with an Indian broker (such as Axis Securities, HDFC Securities, ICICI Direct, and others) that has a partnership with a foreign broker, or by approaching a foreign broker directly (such as TD Ameritrade, Charles Schwab International Account, Interactive Brokers, and others) and opening an overseas trading account with them.
Certain overseas brokers, however, may demand investors to maintain a minimum deposit, which may increase their capital requirements.
2. An International Exchange
The two largest international exchanges, situated in the IFSC at Gujarat International Finance Tec-City, are NSE International Exchange (also known as NSE IFSC), a wholly-owned subsidiary of NSE Ltd., and The India International Exchange (IFSC) Limited (also known as India INX), an arm of BSE (GIFT City).
These stock exchanges serve as an international trading platform for Indian investors interested in investing in foreign stocks.
3. New Age Mutual Funds
An investor can also invest in the international market through mutual funds. He has the option of investing in either an international fund or an Indian fund that invests in foreign stocks. Index funds that invest in international indices such as the S& P 500, NASDAQ 100, Dow Jones, Russell, and others can also be used as an indirect technique to invest in overseas companies.
Investors who do not have a solid comprehension or expertise of the financial markets but wish to diversify their portfolio may consider and choose this form of investing in foreign stocks.
4. Your Mobile Applications
Many fintech businesses have introduced smartphone applications that simplify the investment process and enable Indian investors to invest in stocks listed on overseas exchanges.
Liberalized Remittance Scheme
Foreign exchange regulations in India and the policies enacted thereunder control investments undertaken outside of India. Portfolio investment in foreign stocks or bonds is permissible for resident Indians under the RBI’s LRS, which allows residents to remit up to ₹2,50,000 per fiscal year for any permitted current or capital account transaction or a combination of both.
Furthermore, LRS is exclusively available to Indian residents. It does not apply to a non-resident Indian (NRI), and hence NRIs are not restricted to investing only ₹2,50,000 every fiscal year. They can invest indefinitely from their abroad assets and remit ₹10 lakhs each fiscal year from India.
There were various ways to start investing in America – wasn’t it?
Why Do People Actually Want to Invest in the US?
Historical Results
The Dow Jones Industrial Average and the NASDAQ have outperformed the NIFTY and SENSEX. So much so that the US market has often risen when ours has fallen.
Protect Yourself Against the Rising Dollar
One fundamental reason to invest in the United States is to preserve your wealth from degrading due to the rising value of the US Dollar. Every time the rupee falls against the dollar, you’ll know you have some developing wealth.
Invest in Companies You Care About
You’ve loved and know these US companies, whether it is Facebook, Google, McDonald’s, KFC, or NIKE. You’ve tried their products and know you can rely on them. Investing in a firm you understand always allows you to make more informed judgments.
Make a Nest Egg
Investing in US stocks makes even more sense if you want to live in the United States or if you have children studying abroad. You will also be able to participate in one of the world’s most developed economies while earning interest in US dollars.
Conclusion
There are not one or two ways to invest in stocks from the United States while an Indian citizen. You can choose ways that suit you the most and get started effortlessly – by investing in the US markets.
