Investing In the US Market – Everything You Need To Know4 min read
If you have been following social media carefully, you will realize that your favorite finance influencers have started investing in the US market and have advised you to do the same! But are you wondering whether you should follow their advice or just stick to investing in the Indian stock markets?
We’ve got the answer to that!
Bringing to you a Video discussion with the top experts of the country who will
explain why you should start investing in the US Equity Market.
Our experts for the night,
Mr. Sahil Bhadviya (Personal Finance Coach educating millions on tax planning, emergency fund, mutual fund and stocks through his YouTube Channel – Sahil Bhadviya) and
Mr. Mahesh Patil (CIO of Aditya Birla Sun Life AMC Limited, with 30+ years of experience in fund and investment management)
Let’s begin with the most common questions around this topic.
Reasons why US stocks present such an attractive investment opportunity
Why should Indian investors even consider the US markets when there are great opportunities to invest in a growing market like India?
Here are some reasons that might change your perspective on international investing!
Diversification
You might have heard this statement from every one of your favorite finance gurus “don’t put all your eggs in one basket”. Now think of India as the basket where all your investments are kept. If the Indian economy does not perform well, all your investments are at risk. So in order to reduce that risk, you need exposure to some companies out of India; and what better place than the top 100 companies of the US market which are essentially the top 100 companies globally.
Industry disruptors
When you hear about big giants and industry disruptors like Apple, Amazon, Facebook there are only two very common similarities they have. One, they all are investing in future technologies like AI & Cloud Computing; Two, they are all based out of the US and listed in the US stock market. The US market is the homeland of such global giants.
Economic Moat
Legendary investors like Warren Buffet look for economic moats when investing in companies. Big American companies have such moats which give them a competitive advantage globally and protect their market share and profits from their competitors.
Now I’m sure that after reading this you are considering adding some US stocks to your portfolio. But the main question remains.
How can retail investors invest in US stocks?
Well, there are multiple ways!
- Invest directly
Unless you are unfamiliar with the internet, you are sure to be aware of all the new-age platforms that allow you to directly invest in US stocks. You will find them all over social media, television, and by a simple Google search!
- ETF
One can purchase US ETFs directly through a local or international broker or Purchase Indian ETFs of US indices.
The third and best route as per our experts is,
- Fund of Funds
A fund of funds is one that invests in units of overseas ETFs and/or Index Fund based on the NASDAQ-100 Index. Our favorite one in this category is the ADITYA BIRLA SUN LIFE NASDAQ 100 FOF .
This route ensures investors are investing in the Top US companies with the least effort and the lowest expense ratio.
Now we know how to invest! But is this the right time?
This question always pops up in the mind of the retail investor who is trying to time the market. Remember, the two rules to buying stocks.
First rule, never try to time the market and play the long term game.
Second rule, never break the first rule.
It is natural for you to not invest a lump sum amount after the market has rallied so much in the past two years. This is why our experts suggest starting a SIP which will ensure you start early and small, to end up buying at a lower average cost than you will eventually sell it for in the long term.
Last, but not least, how much should you invest?
A good rule of thumb followed by our experts is 10% of your entire portfolio which ensures good diversification and avoids overexposure.
We hope to have answered every one of your investment queries
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Hoping to see you at our next show!
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