Due to the smartphone and DIY (Do It Yourself) application, it has become easy to invest online in foreign markets.
In the last ten years, the US stock market Dow Jones has given a return of 196%, while the BSE Sensex has given more than 150%.
Angel Broking Ltd DVP- Equity Strategist Jyoti Roy explains that a comparative analysis of US and Indian indices shows why investing in US markets can be beneficial. If we take into account the performance of the Dow Jones and the BSE Sensex in the last decade, we get a clear picture of the returns from each. The Dow Jones has given a return of 196%, while the BSE Sensex has given a return of over 150% in a 10-year time frame between 2010 and 2020. According to him, due to the proliferation of smartphones and DIY (Do It Yourself) applications, it has become easier to study global markets and invest online at the click of a button. Many people are confident of better returns from investing in the US and other international markets. There has been a renewed focus on investing abroad, people are not fully aware of the processes or options they can pursue.
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What is the higher return on investment in US marketsAmerica remains a global financial center and center of innovations. Everyday developments in the US and its markets often affect the price of goods, manufacturing, production and trade worldwide. Due to this it attracts investors from all over the world. Investing in American shares can open up possibilities in the rest of the world as well. Most of the listed companies in the US markets are major global conglomerates, which carry out their regional operations in parts of Asia, Europe and Australia etc. Obviously, the decision at headquarters will have consequences on operations in other parts of the world.
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How can you invest
Many brokerage firms and financial institutions are now giving them options. Through them, investments can be made in American stocks. It can also be ensured that Indian investors are not burdened with high value and the answer may be fractional trading. Another option is to open a brokerage account in the US, as many Indian financial services providers are offering this facility to Indian investors. In addition, they can also invest in rupee ETFs and US-specific international mutual funds. Options such as these encourage investors to rethink their portfolio’s diversification strategy, as it gives them the opportunity to place bets on global innovators. Fortunately, digitization has made investment easier, and processes for international investment have become easier and faster.
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Fractional trading can take entry in US markets
Now investors have started getting permission to allot the shares to at least one dollar. It is a small part of the stock and returns according to the amount invested. Every time the value of a big ticket company’s share increases rapidly. The RBI has imposed regulatory limits through the Liberalized Remittance Scheme, which limits the total amount invested and the same amount can be invested through investments in the stock markets outside the country. Currently this limit is $ 250,000 per year.
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You can also get the benefit of the dollar
American stocks trade in dollars, so the likelihood of your investment providing valuable returns in dollars increases. If one compares the US dollar versus the Indian rupee in the last ten years, then the difference is clearly visible. The rupee has depreciated by about 45% against the dollar. At the same time, there is a reason that many tech giants coming from emerging markets are trying their luck in American markets. That is, they too hope to gain more in US stocks in the future.