How Indian investors can keep track of trends emerging in US stock markets

US stock markets function as a barometer for the global investment community. They trade at close to $35 trillion market-cap, more than the sum of the next 4 markets and about 10x of India.

Wall Street (Image: REUTERS)

By Himadri Chaterjee

US stock markets function as a barometer for the global investment community. They trade at close to $35 trillion market-cap (more than the sum of the next 4 and about 10x of India), account for 58 of the Top-100 companies by market-cap, and also house 5 stocks with more than $1 Tn market-cap (of which two are higher than $2 Tn each). No wonder the direction and signalling effect of US markets is felt around the world and almost everyone in the investment community maintains at least a passing interest in the goings-on of US markets.  

Indian investors wishing to track US markets can access an almost infinite number of resources. Here are some that I find useful myself, categorized as ‘The Daily Fix’ or ‘The Long Game’.

The Daily Fix: resources that keep us up to date on daily occurrences and/or form a trading strategy:  

  1. Online publications and newspapers (including this one) and the prominent international ones are my go-to sources for US markets. You can even subscribe to the print editions of global newspapers, which include the US and non-US news.  
  2. US market podcasts: Trading-oriented podcasts such as Squawk-on-the-Box or Mad Money with Jim Cramer can bring you up to speed on news, earnings calls and daily trends while analysis-oriented ones like ‘The Economist’ – US edition parse the news and add their analysis too.  
  3. For the trader: Online trading platforms such as Interactive Brokers and Schwab among others provide investors with an exhaustive catalogue of US sector- and stock-specific research. Some features may be accessible only after opening an account, which is much simpler under the LRS route now.  
  4. On Twitter, you can follow many managers and traders depending on your investment likes and dislikes such as Vanguard and Blackrock, or the Motley Fool among many others. Most will nudge you to open brokerage accounts to get the best insights, so focus on the news and events sections only.  

The Long Game: resources that may help us form a broader geographic or asset-class view: 

  1. Long-running resources such as Howard Marks’ notes, the CFA Society’s ‘The Enterprising Investor’ and even Warren Buffet and Jeff Bezos’ annual shareholder letters provide deep insight into the macro events that are shaping US corporations and hence markets. A weekly or monthly ritual of brushing up on these resources may be enough to stay abreast of the larger picture.  
  2. Closer home, you will find a few Indian fund managers who are investing in US funds or stocks, typically through feeders. Since US investing is on the rise, they frequently conduct conference calls as well as publish notes on how they are viewing US markets. I find this outsider’s perspective useful to balance the news I hear from US-based sources mentioned above.   
  3. Larger Indian wealth managers have set up product research desks to help clients invest in global markets. Typically, your wealth manager or their Product Heads will be happy to exchange notes.  

A few cautionary words 

  1. Fret not if you’re not fully updated every day. Similar to Indian markets, there is much noise and most daily events will not influence markets. As long as you keep in touch at regular intervals you will be able to glean much of the information out there.   
  2. Don’t forget Asset Allocation and diversification: if you’re building positions either in the US or elsewhere. News must be filtered to synthesize your customized investment position, which implies using asset allocation and diversification as powerful tools to ensure your portfolio is aligned towards your long-term objectives.  
  3. Finally, be wary of misinformation: Everything you read is not true. If some news comes across as very sensational, please double-check and triple-check before taking an investment decision. Rely on established sources and pay for subscription-based news services if needed. Also, check for strong political affiliations of publications that form part of your daily read, and filter those biases out of your investment thesis.  

(Himadri Chaterjee is a Senior Managing Partner at IIFL Wealth. Views expressed are the author’s own. Please consult your financial advisor before investing.)

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