5 Reasons why Indians Should Invest in the US| North Loop Official Blog
North Loop Logo
North Loop
07 Oct 2020

5 Reasons why Indians Should Invest in the US

thumbnail for 5 Reasons why Indians Should Invest in the US
Credit: North Loop

The US stock market is home to some of the best stocks in the world such as Facebook, Google, Apple etc. and the momentum shown by most of them has led to an increasing interest for most investors. Many of these companies have shown promising growth and high quarterly earnings even during a pandemic, and investing in them can allow participation in their growth story as well as portfolio diversification beyond the Indian stock market. If the question on your mind right now is “can I invest in US” or whether it is the right thing to do so, read on to find out why many experts favour Indians investing in the US stock market –

Portfolio Diversification –

A crucial aspect of investing in the US is that it offers a tremendous amount of opportunities because of its dominant position globally and allows geographical diversification. Diversifying your portfolio across different geographic regions can help compensate for the volatility in a particular economic region such as India and reduce risk in the long run. It is a well-known fact that a more diversified portfolio reduces risk by eliminating over-reliance on the continued success of a particular economy. If you are an Indian, it is easy to understand that the financial market in the US may be better than the Indian economy and investing in the US can avoid excessive concentration in the Indian stock market. Another principal factor is that if you invest in US, you not only get exposure to the United States but also to the entire world as many companies with global operations get listed there.

Start investing for free with North Loop and get personalized recommendations

Currency –

Currency plays a pivotal role when it comes to investing in US markets. As we know, what we trade and invest in have significant implications on our portfolio, which can be both positive and negative. That is one of the key advantages when investing in US markets because the currency involved in this case is the US dollar which in 2020 itself is up 6% against the rupee. Moreover, with the Indian rupee experiencing a consistent decline against the American Dollar, the value of investments in dollars can continue to rise even with no changes in the portfolio itself. Investing in securities that dominate in an appreciating currency like the US dollar, in this case, can boost your total returns. Moreover, with the US equities being in a bull market, you can witness some of the highest global returns in dollar terms.

Impressive performance –

The US stock market has shown an impressive performance as compared to the returns from the Indian markets in the last 10 years. An investment in the S&P index has grown at an annual average rate of 17.11% (in rupee terms) in the past decade as compared to the Nifty 500 index returns of 15.46%. In the past decade, the US economy has expanded tremendously which has led to the growth of the S&P 500 at 13.51% annually in dollar terms. Therefore, even though the Sensex may have reached the 40000 mark, returns from the Indian market haven’t been as impressive as compared to the S&P 500 index in the US market which is made up of the world’s largest corporations. The stellar performance by the S&P 500 has also outclassed India’s Nifty 500 index in the last 10 years after accounting for the depreciation in the rupee.

Global factors –

If you are an Indian, you already understand how participating in growth stories at home is difficult as the Indian laws mandate three years of consecutive profits before a company can go public. However, relatively relaxed requirements in the US makes it possible for you to participate in the growth journey of many innovative models. While the Indian start-up ecosystem continues to thrive, it is only in the US markets that you can see models like that of Uber, Amazon, Tesla and others. Its stock market hosts several major corporations with innovative offerings that have shown exponential growth results. The US market, therefore, is crucial for creating an investment portfolio that keeps evolving as new opportunities come up and that acts as a promising prospect for global exposure and growth with the biggest companies such as “Apple, Facebook etc. on its list.

Volatility –

The US market, in general, is less volatile as compared to the Indian market. Indian equities have shown high volatility in recent years with larger swings in returns. That is the reason, investing in the US market allows the reduction as well as the spread of risks, making it a much-recommended diversification method. Investing in the US markets can help your portfolios move differently from Indian indices.

Ease of investment –

Another reason you should not wait to invest in the US is because it has become so much easier to do so. There are several options available such as mutual funds, ETFs, or even direct equities, and with the help of the right investment platform, you can invest in any of them. At North Loop itself, we offer investing facilities wherein you can conveniently invest in the US market using our digital platform with just a few clicks. The best advantage of using North Loop is that you can invest from the comfort of your home and even opt to buy fractional shares of your favourite stocks.

If your primary concern is “can I invest in US?”, we recommend you read this article - All about Investing in the US Stock Market – A Beginner’s Guide (URL).

How to Invest in US –

If you are wondering how to invest in US, you can read the following steps to understand the process of investing –

Find an online investment platform: You can sign up on North Loop to start investing in the US stock market. We offer a user-friendly interface, quality customer service and even the help of a skilled financial advisor.

Open a brokerage account – Open a brokerage account as it enables you to trade stocks.

Deposit money into the account – To begin investing, deposit money into your brokerage account using any of the payment modes such as bank transfer or credit/debit cards.

Buy and review – Purchase your desired stock and review your share positions regularly.

How to invest in US through North Loop -

Download the app from the App Store/Play Store or visit its website.
Sign up on North Loop.
Open an account on it.
Deposit money into your account.
Start investing!
(You can even opt to invest in fractional shares)

To sign up with North Loop, click here.

Save money with

No-fee banking, investments, remittances & insurance for the global Indian

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.