How to Invest in US Stocks: Money making opportunities in the stock market come once in a while. Today, when the US markets are down from the all-time high levels reached in November 2021, it gives an opportunity for long-term investors to diversify their stock portfolio in the world’s largest economy.
Currently, the US economy and the global markets may be facing headwinds in terms of rising inflation, yield and lower liquidity. However, for long-term investors these factors may not matter much over a longer time horizon.
To start investing money in the US stock market, you can consider looking at stocks listed on the three major US stock market indices – Nasdaq 100, S&P 500 and Dow 30. Some of the mega-cap and blue-chip US stocks are Apple, Google, Tesla, and Microsoft, amongst several others.
You need to open a trading account with any international brokerage house such as Stockal, Vested Finance, INDmoney, DollarBull, Winvesta amongst others.
In addition, both NSE and BSE, the two leading stock exchanges in India, have an international trading platform for the Indian investors.
NSE International Exchange (NSE IFSC), a wholly owned subsidiary of the National Stock Exchange of India (NSE), facilitates buying US stocks through the NSE IFSC platform.
The India International Exchange (IFSC) Limited (India INX), BSE’s international arm, allows buying international stocks including shares from major US-listed companies via its wholly owned subsidiary India INX Global Access IFSC Limited.
The entire process of opening a foregin broking account with an international brokerage house is simple and easy. In addition to the KYC formalities, one has to fill a form related to LRS of RBIs foreign exchange rules. The process of buying stocks in the US stock market is seamless with all the paper-work being handled by the foreign brokerage firms. After your international trading account is approved, you are allowed to add funds to your brokerage account and start buying stocks online.
The unique part of investing in US stocks is that you can buy the highly prized US stocks denominated in dollars even in Fractions in Indian Rupees. This is because Fractional Investing is allowed in US stocks. In a way, you can keep buying top 10 US stocks each month in fractions with an amount as low as Rs 10,000. And, not just stocks, there are thousands of ETF’s available on US stock exchanges that can be part of your portfolio.
While the process to invest in US stocks looks simple, the selection of the right stock or ETF with a proper strategy to hold them for a long term needs to be there. Markets are by nature volatile and the movement will never be linear. Having the right shares in the portfolio is still something you have the control on.