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Pros and cons of investing in the US stock market from India

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Pros and cons of investing in the US stock market from India

The US stock market is much larger in size as well as valuation than the Indian stock market. As of January 2022, the US stock market holds about a 59.9% share in the value of total world equity markets.Having all the top global giants like Amazon, Meta and Google listed on its exchange, the US stock market serves as an enticing opportunity for investors across the globe including India to participate in. However, unawareness of its advantages and lacking points can lead to losses. Below we have listed the pros and cons every investor must consider before investing in the US stock market.

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Pros

  • The US stock market is large and liquid, which means that there are always buyers and sellers available. This makes it easy to buy and sell stocks.

  • The US stock market is home to some of the world’s most successful companies, so you can get in on the action by investing in their stocks.Some examples include Apple, Meta, Google, Microsoft, and Amazon!

  • The US stock market is more regulated than the Indian stock market, so there is less chance of fraud.

  • The US stock market is less volatile than the Indian stock market, so your investment will be comparatively less risky.

Cons

  • The US stock market is less well-known to you than the Indian stock market, so you may not be as familiar with the companies that are listed.

  • The US stock market is more expensive to trade in than the Indian stock market. This is because most brokers will charge a commission for each trade that you make.

  • The US stock market is subject to political and economic events happening around the world, so your investment may be more volatile.

  • Before investing in the US stock market from India, you will need to do your own research to make sure that it is the right decision for you.

  • The time difference between India and the US can make it difficult to trade. You will have to be active during odd hours to be able to invest while the market is open in the US.

Indian stock investing differs vastly from US stock investing. It is thus vital to do your research before you decide to step into the US stock market. That said, exposing your portfolio to this global market in a calculated and risk-analyzed manner may benefit in terms of geographical diversification and in returns too

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01 Choose
Choose a suitable portfolio that matches your investment objective
02 Subscribe
Subscribe to the portfolio & get access to the constituent stocks & weights.
03 Invest
Invest in the portfolio & apply regular portfolio updates. Set up SIP for disciplined investing.

FAQs

  • Is it a good time to buy US stocks?
    Yes, as long as you're planning to invest for the long-term or are starting with small amounts invested through dollar-cost averaging You must also invest in highly diversified portfolios to ensure guaranteed returns.
  • Is it okay to invest in US stocks from India?
    Yes, however, a crucial thing you must consider is the time difference between the two countries. You can invest in the US stock market under the RBI's Liberalized Remittance Scheme or LRS. The scheme allows every Indian resident to remit up to $250,000 per year. This limit is per individual, including minors, which means that a family of 4 can remit up to USD 1 million per financial year
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