For the uninitiated, the acronym FAANG is used to collectively refer to Facebook (FB), Amazon (AMZN), Apple (APPL), Netflix (NFLX), and Alphabet’s Google (GOOGL). Now that there exists an understanding of the FAANG meaning, this article seeks to explore whether they are worth investing in for Indian investors. Demat account openings are easy and can be done online. They allow for investments and trades to be made including with FAANG stocks. Demat accounts allow for their account holders to be located anywhere in the world should they like to access their account or make buy, hold or sell decisions provided they have access to a stable internet connection. Moreover, they render the possession of physical certificates indicative of ownership of a given security no longer necessary.
Examining FAANG stocks -
Industries dominated by FAANG include software and communication services. Each of the companies is featured on the S&P 500 which is indicative of the market capitalization they employ on the stock exchanges – NASDAQ and NYSE being relevant here. Owing to their popularity as publicly traded firms, changes in their stock price are known to cause ripple effects that are seen across the entire market including areas unassociated directly with FAANG.
Why are FAANG Stocks Sought After?
FAANG stocks are sought after for the following reasons.
- Their domination over the industry they each serve.
- Their expansive growth over the years.
- Stability – FAANG stocks are known to exhibit only a modest amount of volatility.
Investing in the NYSE FAANG Index –
The NYSE FAANG+ index is relevant owing to its outstanding performance pertaining to risk adjustments and absolute returns.
Prior to investing in FAANG stocks, it is important to consider the following.
- Individual investment portfolio reflective of one’s financial and investment goals
- Budget available to spend and the prevailing prices of each stock.
- Comparisons drawn with FAANG stocks and their competition.
Indians seeking to invest in FAANG may do so via Indian or foreign brokerages or can do so via investment platforms ranging from Paytm to Cube wealth.
Indian investors can open a Demat account such that they can get started with their trading and investing journey. It is important to do due diligence prior to making any buy, sell or hold decisions pertaining to securities you might have your eye on. This preliminary research can reduce the potential of your incurring any risks and / or losses and can potentially allow you to accrue greater returns. Now that you have a better understanding of what FAANG stocks are, you can look at market conditions, your financial goals and assess your risk tolerance prior to attempting to invest in FAANG on the NYSE.
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