As a consumer, your natural tendency is to buy better. While maintaining this precision in investment, it is necessary to go beyond the geographical boundaries of India. The thinking of Indian people to just invest in India lessen their opportunities to earn world wide. The Investors need to invest a portion of their portfolio outside India as part of a risk reduction strategy.
Opportunities Available for Investors in American Stock Market
- The opportunity to invest in their favorite brands like Amazon, Apple or Nike can only be achieved by investing in the US.
- Emerging concepts such as cloud computing and artificial intelligence (AI) are only available in the United States.
- You can invest in stocks and bonds all over the world.
- The United States is the birthplace of passive investment instruments like ETFs, which are rapidly gaining popularity. Whereby investing in global stocks and bonds. Opportunities like ETFs like Vanguard’s VT (the world’s stock market) and BNDW’s (the global bond market) abound.
How to Invest in the American Stock Market?
There are four stages to the process of starting an investment in the United States.
1. First you need to Open an account with Securities and Exchange Commission “SEC” a US market regulator. Investors go through the KYC process to open an account with an registered brokerage firm in the United States. Verification requires PAN number of the applicant, scanned photograph of PAN card, proof of residency (Aadhaar or bank statement).
2. In the second stage, transfer money to the account of a American broker. Once the account is opened the investor has to invest money in US dollars. This process involves following the guidelines of the Reserve Bank’s Liberalized Remittance Scheme (LRS) and sending dollars through an Indian bank account. Under LRS, an Indian resident can transfer up to US $.250,000 per year.
3. Investors can buy / sell shares once the money has been deposited in a broker’s account in the United States. Once the money is deposited in the account, the investor can start investing in listed companies and ETFs in the US.
4. In the United States, shares can be bought in part, without having to buy one in full. Currently, Amazon’s share price in the US $.3,500 and if an investor wants to buy the stock, the rupee’s exchange rate with the dollar is ₹.75, which means it will cost ₹.2,62,500 per share. But if he wants to invest ₹.1,00,000, he can buy 0.3773 shares of Amazon.
Note: After selling the shares, the Indian investor has two options, either to keep the money in dollars in a US bank account or to bring it back to India. If they want to bring the funds back to India, they can withdraw the money by depositing it in their Indian bank account.
NASDAQ Index Chart Over the Years
List of Major Stock Exchanges in America (USA)
| Exchange Name | Short form | City |
|---|---|---|
| Boston Stock Exchange | BSE | Boston |
| Chicago Board Options Exchange | CBOE | Chicago |
| Chicago Board of Trade | CBOT | Chicago |
| Chicago Mercantile Exchange | CME | Chicago |
| Chicago Stock Exchange | CHX | Chicago |
| International Securities Exchange | ISE | – |
| Miami Stock Exchange | MS4X | Miami |
| National Stock Exchange | NSX | – |
| New York Stock Exchange | NYSE | New York City |
| NYSE Arca | – | New York City |
| Philadelphia Stock Exchange | PHLX | Philadelphia |
Do Indian Stock Broker Provide Facility to Invest In American Stock Market?
In India, it is possible to invest in listed companies in the US on platforms like Upstocks, Stockal, etc. Similarly, by opening an ‘Overseas Account’ with brokerage firms like ICICI Direct and Axis Direct, this investment can be made at home from India. HDFC Securities has partnered with Stockal to open such a facility to investors.
Conclusion
Investing in India alone is like turning your back on 98% of the world’s available opportunities. In 2021 Investing in outside the India is very easy process. Nowadays so many Indian stock broker provide facility to trade in overseas stock exchanges.
Take a Look
