As an Indian investor one may choose to invest in ETFs or pick individual stocks available in US stock market.
Invest in US stocks from India: A single share of Google (Alphabet Inc) is trading at around 1737 dollars, that’s nearly Rs 1.28 lakh. But, that does not mean you need to shell out that amount to participate in the growth potential of the company. Investing in the US stock market doesn’t require you to be rich. On the contrary, the US stocks present a big opportunity to create wealth over time, even with smaller amounts. If you are an investor looking to invest in the US stocks for the first time or have limited capital, investing in some of the top US stocks of 2020 is still possible. In fact, you can even start with funds as low as Rs 100. Welcome to the world of fractional shares!
Going by Indian standards, let us see how much money you will need to invest in one share of the top 5 US stocks:
Microsoft : $ 211 : INR 15,614
Apple: $116 : INR 8,584
Amazon : $3,035: INR 2,24,590
Alphabet : $1,737 : INR 1,28,538
Facebook : $272 : INR 20,128
( Approx prices as on 10th Nov, 2020)
But, does it mean that one requires nearly Rs 3,97,454 ( at an exchange rate of Rs 74) to participate in the growth story of these companies? The good news is that as an Indian investor, you can invest a smaller amount as low as Rs 100 and own a part of these shares. This is possible as there are brokerages that provide access to own US shares as fractions.
If a share listed on the US stock exchange is trading at $500, you can still own half share by investing $250. With thousands of companies listed across different US indexes such as S&P 500, NYSE or Nasdaq, you can build a smart diversified portfolio even with limited amount of funds. The international brokerage houses provide easy and simple access to global markets and help one diversify their portfolio.
Unlike Indian stock exchanges, the price is not a barrier in the US stock market. Simply decide how much you need to invest and the number of shares will be automatically calculated for you. For example, if a share is trading at $32 and you want to invest $100, then you will get 0.32 shares of the company. Similarly, you can own shares of different companies in fractions and build a diversified stock portfolio across sectors, market capitalization even with a small amount of money.
The US stock market is buzzing with international money exchanging hands and finding opportunities across small-caps and large-cap stocks. At the forefront are the FAANG shares, an acronym that represents five highly successful US tech companies – Facebook, Amazon, Apple, Netflix, and Google. The potential being thrown by home-grown companies in the US is something investors need to take advantage in the long term. To start with, keep tracking the leading 5 US indexes for cashing in on the opportunities.