Benefits Of Investment In US Stocks
Did you know that in the next few years, it’s expected that the Indian Stock Market would surpass other major stock markets in terms of capitalization. The stock market is experiencing a boom in investment as myths surrounding it are slowly disseminating.
In India, the number of investors has increased over the past two years as new retail investors become more optimistic due to the market’s performance. Along with market performance, there are more initial public offerings (IPOs) every year, which is encouraging news for investors.
In India, US brands have gradually infused themselves into our daily lives. Everything from Windows or MAC Operating systems and iPhone to restaurants like McDonald’s, Burger King, Starbucks, and others.
As an active investor, you can easily get involved in the US stock market as well as other international exchanges. Before getting onto this bandwagon, here are some important benefits of investment in the US stock market
1. Market Capitalization
In terms of market capitalization alone, the S&P 500 is the largest stock exchange in the world, with an estimated $30.5 trillion in value. The reason behind this? It is home to the top 500 businesses in the world, including Amazon.com Inc., Microsoft Corp., and Apple Inc. (AMZN) Alphabet Inc., Facebook Inc. (FB), etc.
2. Geographical diversification
Diversification is a frequently discussed topic when we talk about investing. Geographical diversity is a factor that is important to take into account, even if it typically refers to spreading your capital across different asset classes.
While domestic diversification reduces the risks that the Indian market poses, it is still possible to effectively diversify an investment portfolio within the asset classes that are available in India.
While domestic diversification reduces the risks posed by the Indian stock market, international diversification helps you battle international market risks. So, while playing with the stocks of big-shot companies, you tackle the risks involved. Of course, international diversification will also help you counter the issues faced in Indian stocks. So, clearly, there is a two-way benefit.
3. Getting desired profits and dividends
An investor can receive the profit, dividend, or both on their US stock market investment that they would have received on their Indian stock market investment. Compared to the Indian Stock Market, the return on the US Stock Market is higher.
Also Read: Fundamentals of Forex Trading
The New York Stock Exchange lists businesses from all over the world in addition to American corporations. US stocks investment helps you achieve a favourable return on the US stock market because of the presence of multinational firms and the high return you will receive as a consequence of various elements.
4. Innovation
On US soil, newer, better, and more inventive businesses are constantly developing. By making prudent investments, you can participate in their upward trajectory. Users of Cube have direct access to US guidance from distinguished Registered Investment Advisor (RIA), Rick Holbrook, helping them to stay ahead of the curve.
5. Invest in fractions
The availability of fractional shares when investing in US companies is another intriguing feature. This is significant since, for example, a single share of Google costs $2,731 (about Rs. 2,07 lakh). Without the option to purchase in fractions, a sizable share of investors may be unable to participate in the US stock market.
You can put in $5,000–$10,000 or any manageable sum as an investment, gradually building your portfolio while benefiting from the rise in the value of stocks of major US companies.
6. Diversifies your portfolio
All major US stock exchanges list companies from across the globe, making it a potential place to invest. In addition to investing in worldwide firms, you diversify your portfolio when you invest across a spectrum of departments (food, electronic, e-commerce) listed in the US stock market. A state of emergency could lower the ranking. However, the impact would be minimal.
The majority of Indian indexes, however, are dominated by Indian firms. The indexes might crash even if there is only slight unrest in the nation. American stock markets are diverse and have proven to be resilient in the face of hardship, converse to the situation in India.
Conclusion
The benefits of investing in US markets are known to experienced players. In fact, Indian investors profit from the decline in the value of the rupee relative to the dollar by making investments in US markets, making them much more alluring. The rupee has lost a sizable portion of its value against the dollar in the last ten years. This fact in itself, encourages several investors to purchase US stocks.
