How to Invest in US Stocks from India?

The US stock market is home to some of the most popular stocks in the world, like Facebook, Google, Apple, General Motors, etc. Buying such Stocks allows you to participate in their growth story while allowing you to diversify beyond the Indian stock market.

Reasons to invest in US stock market

Every other day I hear my friends talk about investing in the US Markets. They are curious to invest in these multi-bagger tech stocks in stable markets in US. I see there are four major reasons why you'd want to invest

1. Just like any other investor you want to cash in on the downward or upward trends of a stock. For instance, recently the semi-conductor industry has been doing really well in the US. I invested in stocks like Marvell, Lam Research, Intel when these stocks were on downward swing and now I see my portfolio go up by 55% 😄
2. US markets are pretty stable and with inflations in the range of 2-3% you can invest a huge corpus in government or treasury bonds and keep your money relatively risk-free.
3. Most mega global corporations are headquartered in the US, which offers you a more diversified investment avenue. You will leverage stability of the markets to your advantage.
4. The US Stock Market has outperformed the Indian Stock Market over the last decade in pure dollar terms. With the US being at the centre of global innovation, you can invest in a promising company during its initial stages.

How to Invest in the US Stock Market from India?

If you’re wondering, Can I Invest in the US Stock Market or how to invest in US stocks from India, the answer is yes, you easily can!

1. Direct investment in stocks.
2. Indirect investment in stocks via mutual funds or ETFs. 

Direct Investments

How to invest in foreign stocks from India?

You can invest in the US stock market directly by opening an overseas trading account with a domestic or foreign broker.

1. Opening an overseas trading account with a domestic broker

Many Indian brokers have tie-ups with international brokers. They act as an intermediary and trade funds on your behalf by opening an overseas trading account for you. You will need certain set of documents for opening such accounts (we will discuss this in later blogs).

There are a few restrictions when it comes to trading this way. Based on your domestic broker you will have limitations on how much you can invest, the assets you can trade on etc. Now this could be a bummer for large investor, but for a investor thinking to invest 10-25L this is not a challenge.

You will also have to bear the currency conversion costs associated with converting INR to USD before investing. So beware, the last time I calculated you need to make $106 on an investment of $100 to break even 😏

2. Opening an overseas trading account with an international broker

You can also open an overseas trading account directly with international broker with a presence in India. For example, Charles Schwab, Ameritrade, Interactive Brokers, etc. can help you here. Please ensure that you understand the fees and charges before opening the account.

So, conduct your research properly before you pick the best broker to invest in US stocks.

Indirect Investments

How to invest in US Mutual Funds, ETF from India?

1. Mutual Funds

You can invest in Mutual Funds that have invested their funds in the US stock markets. So by investing in these mutual funds you get exposure to the US markets without having to go through the hassle of opening an account for trading.

2. Exchange Traded Funds

You can also gain exposure to US stocks by investing in ETFs. You can purchase US ETFs directly via a domestic or international broker or purchase an Indian ETF of international indices.

Know Before Investing in US Stocks from India

• Open an overseas trading account if you have the time and expertise to analyze the US market and economy and make informed decisions.
  
• Look for the account charges, brokerage, currency conversion charges, as international investing attracts more charges. Please go through all documentation and make yourself aware.
• Read more https://vestmint.in/invest-us-stocks-from-india/

Conclusion

I strongly feel you should invest in US stock markets as this will help you diversify your portfolio. Consider all aspects and invest according to your financial goals and risk tolerance.

Happy Investing! 😃