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A Beginners Guide to Global Investing

The tricks of the trade to do with smart investment involve the variety of investments you may make. You can have a nice blend of steady assets with some dynamic securities thrown in for good measure. Diversification as it relates to investment, doesn’t just mean you invest in a range of different assets, but entails diversification of a geographical nature too. The global stock market is a good place to start. 

What is Global Investment? 

To answer a simple question, that is “What is global investment?”, affords an equally straightforward answer. Owning shares/securities of firms which are located outside your own (home) country, to diversify your financial portfolio, is reflective of global investment. These investments can represent a hedge against risk and growth in economies which are far from your own. 

Global Investing - What are your options?  

Global investment options include any of these ways in which you can allocate your assets for optimal returns. While you explore these, nonetheless, keep geographical locations in mind:

  • Index Fund Investments - A very indirect way to invest in international markets is via exchange traded funds. These ETFs are actually mutual funds that are invested in foreign funds. Simply, this means that you can invest in mutual funds in India, and these reinvest in ETFs /securities/ index funds abroad. Here read more on Index funds versus ETFs: Choosing the right passive investment
  • Direct Investments - Digital platforms permit you to invest in the global stock market directly. Apps offer direct paths to stocks abroad. Contrastingly, you may try brokerages in India that also give you leeway in foreign market investment. The first step for you to go on this path is demat account opening


Advantages of Global Investment

Global investing can give you apparent benefits and if you want to spread your wings, you should take note of these perks: 

  • Diversification Geographically - Around the world, markets perform in a different way at various times. By investing across markets overseas, you get the full gamut of different locations that permit your cash to give you better risk-adjustments on your returns. 
  • Novel Opportunities - Global investments give you a myriad of opportunities. For example, you may believe in the vision of an internationally innovative company and want to be a part of it. All you have to do is buy the stock of the company to partake in its growth. 
  • Diversifying Currencies - The rupee has witnessed a depreciation against the US dollar. Any investment you make in the US dollar can, just by currency exposure, offer a significant bump up in your returns. International asset investment could result in a hedge against the depreciating rupee and international volatility of the markets. 

Keen Global Investment

Global investment is a good way to widen your reach of stocks and you will certainly benefit from it. The idea of global investment should benefit you only when you have had enough experience in trading in your own country with valuable input from Motilal Oswal. 

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account

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