BUSINESS

3 Easy Ways to Invest in Foreign Stocks From India

Invest in Foreign Stocks From India

The Indian stock market has more than 5,500 companies registered with two major stock exchanges namely BSE and NSE. These companies can be classified in large-cap, small-cap, and mid-cap. The Indian stock market holds an important space among top-performing stock markets. The BSE index ‘SENSEX’ crossed 60,000 points in September 2021. Top companies listed on BSE and NSE give a high rate of return on investment due to several factors.

Despite these positive attractions, investors reach out to the foreign market for investment. Why do people like to invest in foreign stocks? Investing in other countries, especially top-performing economies, provides numerous benefits. These benefits include a high real rate of returns, exchange rate variation advantage, risk diversification, and more.

Following are some important reasons to invest in foreign stocks:

  • Investment diversification

As per portfolio theories, investment diversification ensures high returns with minimum possible risk. If you are a risk-aversing investor and want to earn high returns, investment in other countries would be an effective alternative. An interesting logic in this investment is that you can earn benefits through buying stocks in the developed markets like the USA, the UK, etc.

  • Desire to invest funds in favorite companies

Human nature motivates people to use their favorite product and services. Usually, people try to invest in their favorite companies. Along with Indian companies, investors like to invest in multinational brands. In this global market, multinational companies like Amazon, Facebook, Apple, Samsung, and others are becoming favorite brands of people. These wants and preferences attract investors to foreign stocks.

  • Global explore to get extra benefit

Investment in a single stock market provides limited returns. This logic motivates investors to get benefits from multiple countries. Apart from India, more than 60 registered stock exchanges are functional all over the world. Companies from different nations have registered their stocks on these stock exchanges. In order to get value addition, investors explore beyond domestic limits.

As an Indian investor, you can invest up to $250,000 outside India.  The Reserve Bank of India has imposed a specified limit for investment in other country stocks. Indian investors consider the US stock market as the most attractive destination. Trading in the US stocks from India gives extraordinary returns. High exchange rate variation between the USA and India, provides better return opportunities on investment.

Three easy ways to invest in foreign stock market

To start your trading in the US and other foreign stocks, you can make use of the following methods:

  • Opening an account with a broker having a tie-up with foreign collaborator

To invest in the US stocks from India, domestic brokers provide demat account services. Full-service brokers provide an opportunity to open your trading account with their foreign partners. You can invest in US stocks, bonds, exchange-traded funds, and other securities with these accounts.

  • Trade US stocks from India through overseas accounts with foreign brokers

Like foreign collaborators, you can directly execute trading through foreign brokers. Many overseas financial firms offer trading in US stocks from India. Before selecting a broker, you need to compare their brokerage fees and charges. To support your trading, various US-based brokerage houses have extended their services in India. You can use their interactive services and can start your investment.

  • Invest through Indian startups

Technological advancement has made it easy for Indian investors to trade with newly established start-ups. The Indian financial system has many financial broking start-ups that give an opportunity to trade in domestic as well as foreign stocks. 

These simple ways don’t require much effort to trade US stocks from India. Us-based brokerage firms and Indian financial institutions have made trading systems easy and effortless. You can multiply your returns through foreign stock investment. Thus, start analyzing and investing abroad with easy mechanisms. 

Related Articles

Leave a Reply

Your email address will not be published.