What are the benefits of investing in US stocks as an Indian | Motilal Oswal

What are the advantages of buying US Stocks as an Indian investor

In today’s digital world, we Indians use apps like Google, Facebook and Netflix in our daily lives. There is a high chance that you or someone you know uses a Dell or a MacBook laptop. Like these, many of the world’s biggest companies are actually based out of the US but are recognized worldwide. Have you considered investing in such high growth companies but hesitate because they are based abroad? Let’s look at some advantages of buying US stocks as an Indian investor.

1. Access to global companies

From the biggest technology companies like Google and Apple to popular brands like Nike and Starbucks, all are companies from the US. Another similarity in all these US companies is that they are global. The popularity of these companies is worldwide. Owing to its global presence, the US equity market has a market capitalization of $47.32 trillion while that of the Indian equity market in comparison is $3.21 trillion. Thus, investing in these companies can expand your approach.

2. Fractional Shares

The current cost of an Apple stock is 173$ which is roughly 13,000₹. Similarly, the current cost of an Amazon stock is 3321$ which is roughly 2.5 lakh ₹. One might argue that US stocks are very expensive and not a very sustainable investment. However, one amazing advantage of the US stock market is that you can purchase fractional US stocks. Suppose you just have 20,000₹. You can invest a sum of 5,000₹ in each of your four favourite US companies and so on. This feature of investing in fractional shares enables investors to invest across a portfolio of companies.

3. Diversification

Factors like political instability, elections, budget and natural disasters have a huge implication on a country’s stock market. It is a good practice to diversify your funds to save your investments from a sudden crash. While instruments like gold and bonds are helpful, investing in US stocks can help you diversify your portfolio as well as set you up for potentially good returns.

4. Dollar Value

When you are investing in US stocks, you are purchasing the stocks in dollars. The exchange rate of dollar to rupee is 76.13 today (28th March 2022). 5 years back (7th April 2017), 1 dollar was equal to 64.26₹. In the past 5 years, the US dollar has increased by more than 18% when compared to the rupee. By virtue of investing in US stocks, you are investing not only in the value of the stock but also in the value of the dollar. If the dollar increases in comparison to the rupee, so does your investment.

5. Innovation 

We are living in an ever innovating world. The US is rich in resources and attracts brilliant minds from all over the world.US companies are always innovating to bring disruptive solutions. In recent years, companies like Tesla, Meta and Amazon have been working in various spaces to bring disruptive solutions. By investing in such US companies, you can ride along this ride of innovation.

Conclusion 

Diversification of portfolio is very important for any investor. US stocks are an excellent option for an Indian investor to invest in global companies and innovative solutions. 

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