Are you wondering how to invest in foreign stocks from India carefully? You might be rummaging for some ingenious methods of trading in the international market from India!
Have you heard of the biggest companies like Amazon, Samsung, Facebook, Tesla, and Netflix? These are the prominent conglomerate organizations worldwide, and all of us have grown up utilizing their services.
So, these companies will not be listed on Indian Stock Exchanges as these are not Indian companies. Everyone is worried about how can we own some shares of those companies apart from utilizing their products?
Read on to know more about the top ways to invest in the international stock market!
Why Do You Need to Invest in International Stocks?
It’s a valid question for every commoner, why you need to invest in foreign stocks? Over 5500 companies are enlisted in Indian stocks; are not they sufficient? Google, Amazon, Apple, Samsung, and Tesla are multi-billionaire organizations, who have a plethora of cash, top-notch professionals, and qualified employees in their management team. Moreover, they have world-class innovators in their eminent industry. Well, these are the top reasons that why many Indians want to invest in the foreign exchange:
1. Diversification with Worldwide Investments
Investing in top-notch foreign stocks profoundly aids in diversification. If the Indian integrity market starts falling down because of some leading local regions, therefore, the foreign stocks investment can diminish the jeopardy in your portfolio. The mighty reason is that some trifling local reasons may not possess a drastic effect on the foreign markets.
2. The Public Wants to Invest in Their Preferred Companies
Twitter, Apple, Amazon, Facebook, Samsung are the eyes of innovations and anticipations for this generation. That’s why many people want to invest in these companies.
How Much Money Do You Need to Invest in International Stocks?
RBI has enacted in their Liberalized Revenue scheme to invest a maximum of $250,000 per person every year, which means around a wholesome amount of 1.7 Crores. The investment can be accomplished sans requesting any top-notch authorizations, regardless of saying, it can be shortened or maximized under some crucial cases.
It also indicates that if there are just 2 or 3 persons in the family, you may invest up to $500,000 or up to $750,000, which means INR 3,72,06,950 to INR 5,58,10,425. However, this limit can be changed per person every year.
How to Trade in International Market from India?
You must have understood the elementary concept of trading in foreign stocks along with the amount of money needed to invest in it. Now, let’s have a look at the simple ways to trade in the international market from India:
1. An Account with an Indian Broker Possessing a Connection with a Foreign Broker
Various eminent Indian banks like HDFC Securities, Axis Securities, ICICI Direct, and Reliance Money provide full-time brokerage services and has a good tie-up with foreign brokers. These brokerage platforms have made it hassle-free to open your international trading account with their foreign brokers.
Therefore, you can easily invest in those foreign stocks utilizing the services of eminent brokers. Let’s see an example; if you have a trading account with ICICI Direct, you can efficiently invest in global markets utilizing their premium broker partner Interactive Brokers LLC.
2. Investing in International Stocks via New Startups Apps
Many brand new apps have launched in India and foreign from the past few years that diligently helps Indians to trade in the foreign stock exchange. Here we have an app named “GROW,” “Webull app,” and “Vested Finance.” These apps have launched in India to help Indians who want to trade in international stocks.
Major startups like Vested Finance is top-notch US Securities and Exchange Commission (SEC) accredited investment platform or advisor. Moreover, you may also trade in international stocks using the Webull app, which is another famous startup organization devoted to building superior investing and seamless trading experience for both the Global Stock markets and India.
3. Open a Trading Account with the Renowned Foreign Brokers
A few top-notch brokerage organizations like TD Ameritrade, Interactive Brokers, and Charles Schwab international Account allows Indian citizens to open up a trading account and trade in the US mutual funds, stocks exchange, etc.
Moreover, an eminent US-based brokerage platform like “Interactive Brokers” has also its branch in India, where you can visit, get your queries resolved, and open your primary overseas trading account.
Cons of Investing in International Stocks
You must have heard the adage that there should be two sides to every coin. Similarly, a few mandated points you need to know before you invest in top-notch foreign stocks:
1. Be Prepared for Enormous Charges
You will be transacting via international currencies during foreign stock investing. You need to pay the brokerages in dollars while you are trading in the US stock market.
Therefore, foreign stock brokerage charges must be a bit higher than the Indian Stock market charges. Moreover, the monthly or annual maintenance costs may also be humongous in terms of domestic trading accounts.
2. Profits are in Terms of the Currency Exchange Rate
There will always be the involvement of the currency risks during the investment in the foreign stocks occur. Let’s understand it by a simple example:
Suppose you will invest in the US stock market. So, when you purchase US stock, the rate of currency exchange will be $1, which is INR 74.41. However, when you want to sell that US stock, suppose the Indian currency got powerful, and thereby, the rate becomes $1 = INR 68.41.
Now, you might already have lost a certain amount due to some changes in the foreign exchange rates. That is why the profits will always be a matter of the currency exchange rate during your investment.
In a nutshell, we have diligently discussed three leading ways to trade in the International market from India. Moreover, the article also provides a detailed insight into the pros and cons of investing in international stocks. So, happy investing!