By Raj K
The US stock market attracts a number of Indian investors, but unprepared foreign transactions could be dangerous. Before investing in the US stock market, you must understand the pros and cons of investing abroad. Many individuals from India find it scary to invest in US markets. However, the market is big and elicits the deepest aspirations of every investor to invest. The US stock market has a market value of $47.32 trillion, whilst the Indian equity market has a market capitalization of $3.21 trillion. Therefore, investing in these stocks might broaden your portfolio’s horizon.
Diversification directs investment destinations
In the information age, Google, Facebook, and Netflix are accessed on a constant basis by Indians. There is a strong possibility that either you or someone you know uses a Dell or Apple laptop. Several major corporations with widespread recognition are located in the United States. The US stock market is one of the greatest possibilities when it comes to diversifying your portfolio across geographies.
The nation is host to a few of the most technologically advanced discoveries and enterprises that create profit and provide unprecedented portfolio returns. In addition, the negligible linkage between the Indian and American stock markets makes it a desirable investment option with the advantage in terms of getting a broad bouquet of stocks that are diverse.
Varying exchange rates to bolster profits
All investments, transactions, and stock and market exchanges on the Indian stock market are conducted in Indian Rupees (INR). Given the U.S. stock market, this transaction is conducted in USD. The USD, which has more purchasing power than the INR, is the default global currency. Therefore, investments made with the USD in motion will offer more rewards. For investors who invest in US markets, this implies more profits.
Stability is favorable
The volatility of long-term investments in US markets is lower than that of the Indian stock market. The Indian stock market has shown higher volatility than the global share market. Diversification reduces the risk factor, thus investors are recommended to allocate their funds among several assets. When an investor invests in the foreign stock market with a diverse portfolio, it is found that their portfolios move differently than Indian indexes.
Also Read: US stock market investments can fund your kid’s foreign education – Here’s how
How cross-border payment gateways are opening new opportunities
With many Indian investors getting ambitious, they all want to diversify their portfolios. What better way to do so than to invest in the US stock market via cross-border payment platforms?
It used to be surrounded by ambiguity and was a tedious process in times gone by. Basically, there were no streamlined procedures for investing as an Indian in the U.S. stock market. There were many complexities that manifested themselves and deterred the investors in India from trying to go for it.
Since the cross-border payment gateways have entered the investing scene, the dynamics have undergone a shift. Today, investing in stocks globally, especially in the American stock market, has been alleviated from being nuanced to being at its integrated best.
It is an immutable fact that since the emergence of reliable, robust, and intuitive interfaces of the cross-border payment gateways the portal of profits and growth has been flung open.
Indian investments in overseas stocks and debt are at an all-time high. The latest RBI data on outward remittances under the Liberalized Remittance Scheme (LRS) for Resident Individuals clearly demonstrates that outward remittances are quantified at nearly $ 19610.77 million in 2021-22, compared to $ 18760.69 million in 2019-20. The proportion of total remittances invested in equity and debt has amplified from $431.41 million in 2019-20 to $746.57 million in 2021-22.
Also Read: Moscow Exchange to launch trading in the Indian rupee
Vantage view
The Indian investment ecosystem has embroidered some trailblazing cross-border payment gateways into its contours. This has ensured the facilitation of cross-border remittance transfers at the lowest rates. These platforms have also been able to create a seamless environment for cross-border investment by investors.
The local regulatory agency, RBI, has certified the innovative systems, confirming that their backend architecture is compliant with local regulations and completely secure. Taking cross-border payment architecture to the next level, some of these tech-powered companies are creating an eclectic and novel platform that allows end-users to select from multiple reliable cross-border payment partners.
This enables investors and ordinary people to enjoy the benefits of managing their overseas investments and payments in a one-stop-shop style framework. The pioneering solutions can be deployed on multiple continents and can cater to various audiences across the globe for their investment needs.
(Author is Founder and CEO at FairexPay)
