American Products and Gadgets
We use many American products and gadgets (also softwares!!) in our daily lives. With thousands of products being used all across the globe USA is home to some of the largest companies in the world.
Hence when it comes to diversifying your investments beyond the boundaries of India, the US becomes the most likely option.
US GDP & Stock Markets
- The US is around 15% of the world's GDP.
- The US stock market constitutes around 55% of the global market.
- Its home to the largest stock exchange in the world.
- It provides access to some of the world's leading companies.
Currency Risks
When one invests in the US stocks from India you are dealing in two currencies - the Indian Rupee and the US Dollar. While you remit INR from your banking account, it gets converted into USD when a stock is purchased.
And when the stock is sold, the proceeds in US dollars are converted to Indian Rupees before your account is credited.
If you choose to open an overseas investment account then you have remit US dollars (which will get converted from INR in your account) to your overseas account.
And when you want the monies back in India, then US dollars remitted from your overseas account will get converted to INR.
Country Risks
Since US is not our home country i.e. we do not live in the US therefore we have a limited understanding of the political, social and economic landscape there.
In other words we do not have the feel "of the ground" there. This is a risk and one must take steps to overcome such a risk.
Regulatory Risk
The US Government has different reporting and tax regulations when it comes to the stock markets.
Any changes made in regulations can impact companies and hence their share prices.
As an Indian investor you need to stay abreast with the policy changes.
Taxability Risks
As an Indian investor, you need to keep taxes in mind - capital gains and dividend tax.
It will be worthwhile to read about tax implications when one decides to invest abroad.
(disclaimer : This blog is for information purposes only and not to provide any kind of advise or solicit any business)
