Advantages of Investing Globally5 min read
Socializing on Facebook, buying stuff from Amazon, or just thinking of what to watch on Netflix on a chill Sunday and then searching for suggestions on Google using your iPhone.
These top American brands have become an integral part of our daily lifestyle habits. But what if we told you that apart from using these leading brands, you now have an opportunity to invest in them as well. And not just them but the minds behind the ventures as well.
You can Invest in the vision of global leaders like Jeff Bezos, Elon Musk, Sundar Pichai, Warren Buffet, and many more.
In this blog, we are going to tell you about why you should really explore these Super 50 Mega Cap companies of the USA.
Investing in stocks is like investing in companies and their leaders’ visions that you have confidence will grow in the future. Global investment adds a new dimension to diversification as one gets an opportunity to invest in leading economies of the world, and America is one of the fastest-growing economies we all know of.
Restricting yourself to only domestic markets keeps your portfolio’s concentration in just one economy. As you think of investing beyond the borders, investing in foreign stocks would provide greater stability in your portfolio through geographical diversification.
How? Here are 5 reasons, or rather advantages of why you can put your money in American stocks, in the vision of top minds like Elon Musk, Jeff Bezos, Tim Cook, etc , and make your investments go global.
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Diversification of Portfolio
A diversified portfolio consists of a mix of distinct asset types and investment vehicles to limit exposure to any single asset, hence reducing risks. It acts like a risk management strategy that allows you to yield higher returns in the future.
A diversified portfolio acts as a source of stability during market volatility. If your investments are across geographies, economic fluctuations in one country won’t affect your other investments as there is a lower correlation between domestic and foreign equities.
As the global economy is in its growth phase, it is one of the best times to diversify internationally. The United States is a mature market and is not as rapid as other economies. Growth is recurring, and investing internationally enables you to capture profits from shifting economic cycles.
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Growth Opportunities
Investing in the top American companies and markets enables you to access investment opportunities that are not present locally.
For example, developed markets like the US are home to some of the world’s leading companies and visionaries like Tim Cook with Apple, Jeff Bezos with Amazon, Satya Nadella with Microsoft, Warren Buffet with Berkshire Hathaway to name a few, which you cannot access by investing in domestic markets.
Investments like ETFs and Fund of Funds may allow you to access multiple geographies. With American investments, you can choose a theme or a combination of multiple sectors. You can capitalize on the unique opportunities presented by sectors with sustainable earnings acceleration.
Diversification of portfolio with overseas investment creates numerous options in the way you want to invest your finances.
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Currency Diversification
By investing in American stocks, you get the dual benefit of better markets and appreciating currencies. For example, the USD has been appreciating, on average, over the last few years.
Whereas the emerging markets’ currencies depreciate over the long term. If the exchange rate moves in the favor of the stocks you have invested in, you can earn some premium on your investment.
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Relatively more stable Portfolio with US stocks
Having an international portfolio with the names of top American companies linked to it can be used to reduce investment risk. Developed markets tend to have a lower risk. The US stock market has outperformed the local market 50 Index on an absolute and risk-adjusted basis in periods greater than 1 year.
Another advantage of investing in American stocks is that if the local market underperforms, gains in the investor’s international holdings can smooth out returns.
In conclusion, in the era of interconnectivity, where nothing seems to be out of reach in the world. You can buy from anything even if you are in the remotest corners of the globe so why not go global with your investment?
This is where Paytm Money, in association with Mirae Asset, brings you an opportunity to start investing globally with the S&P 500 Top 50 ETF Fund of Fund NFO.
The Mirae Asset S&P 500 Top 50 ETF Index is a single portfolio asset that provides exposure to the Super 50 companies of the USA’s Mega Cap segment like Apple, NVIDIA, Walmart, Amazon, and many more. With this Index, get diverse stock options and support the visions of leading brains behind the Top 50 American companies like Elon Musk, Tim Cook, Jeff Bezos, Warren Buffet, etc.
Need more? Check out The Mirae Asset S&P 500 Top 50 ETF Fund of Fund on Paytm Money App, and take your step towards exploring American stocks today!
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This information is purely based on publicly available data (Data source: https://www.miraeassetmf.co.in/ & Scheme Information Document) and in no way to be considered as advice or recommendation.
