Should Indian investors consider US stock market investment from India?

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Considering the sustained Indian rupee depreciation against US dollar, the returns over longer period of time becomes really attractive.

It’s been a spectacular run for the stock market in India. From the lows of 7511 in March 2020, the Nifty 50 is in touching distance of 16000. Over the last 12 months, both Nifty 50 and BSE Sensex are up by nearly 40 per cent. Several individual stocks across industries have run-up a lot and long term investors who showed patience stands rewarded.

However, besides the risk inherent to equities, there is another risk that you as an Indian investor should not ignore. Your portfolio is exposed to geographical risk if all your funds are invested in Indian market. It is, therefore, better to bring in geographical diversification to your portfolio by investing across different economies.

And, which could be a better option than investing in the growth engine of the global economy – the US. To invest in US stock from India, it is not a complex affair anymore. Almost similar to buying stocks of Reliance, CDSL or Zomato, you can buy shares of Tesla, Amazon or Facebook sitting from your home or office.

What you need is a brokerage platform that has all the back-end processes in place to help you input your buy or sell orders on the US stock exchanges. The good news is such an arrangement is already in place and the process to open a US trading account is super easy. “Anyone can simply open an account with a broker which provides access to global investing on its platform. The investor can complete the digital KYC verification process with ID proof and address proof within 30 minutes. The US broker partner takes 48 hours to approve the account creation. Fund transfer from Indian bank to Overseas Bank takes around 2-3 working days. After this one can start trading. The entire process takes 48 hours – 72 hours,” informs Sandeep Bhardwaj, CEO, Retail, IIFL Securities.

If you are still waiting on the side-lines and allocating all your money only into the domestic economy, here’s what Sandeep has to tell you about the opportunities in the US market. “US equities have not only been one of the best performers over the last few years, but also allows Indian investors access to high growth new technology stocks like Amazon, Tesla, Netflix etc., which are great value creators and are not available to investors in India otherwise. It also helps in diversifying your equity portfolio. Also, considering the sustained Indian rupee depreciation against the US dollar, the returns over a longer period of time becomes really attractive.”

As a beginner, you can start buying the top US stocks which are the global leaders in their own domain. Some of them include the FAANG stocks – Facebook, Apple, Amazon, Netflix and Google – and then start adding ETFs and other mid and small cap stocks to your international portfolio. Open an international trading account and let your money fly across the boundaries where the opportunity lies.

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