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Why Choose Global Investing in India?

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Although India is an emerging market, its share in the global equity market is just about 3%. It highlights that there lie huge possibilities outside India’s financial market. Hence, experts advise investing in foreign stock markets. The primary objective of investing in assets of foreign countries is to exploit the opportunities offered by such booming financial markets. Ever since India adopted the policy of economic liberalization, it has advanced on a path of becoming an economic giant. So, naturally, both Indian corporate houses and investors flourished over time. Yet, one cannot deny that global markets are still competitive. 

Hence, Indian investors must go for global investing. One may ask, “what’s the relevance of international investments in India?” We will answer this question today. However, first look at what we mean by global investments. 

Meaning of Global Investing

Global investing is investing in financial assets or securities of countries other than your own country. Just as there are companies listed on Indian stock exchanges, many companies are listed on stock exchanges of numerous other countries. You can invest in the stocks of these companies. Likewise, you can purchase and sell shares of these companies. The only thing you need to keep in mind is that you will have to follow the rules and regulations of both countries. To start investing in global stocks, all one needs to do is open a Demat account and a trading account with a stockbroker facilitating foreign investments. 

Reasons to invest globally. 

Global investing has become a need of this hour. It can play a major role in our growth story in this globalized world we live in today. Here are some significant advantages of investing in international assets. 

Diversification of funds

A well-diversified portfolio can tackle the ups and downs of financial markets. In times of economic fluctuations, financial markets can go through phases of high volatility. If your portfolio holds assets in different investment instruments, your risk reduces substantially. International securities such as stocks are also good options to spread your investments. If you invest in securities listed in foreign territories, your funds are spread in different locations. Changes in the economic conditions of one country do not always affect others. So, a good part of your investments will be safe and profitable. 

Expansion of portfolio

When you invest in global companies of various countries, you get a wide range of options. Investors can explore untapped opportunities. Many emerging markets have companies not known to everyone. Although they may not be very popular, their potential is worth our attention. So, you get multiple options if you invest in foreign companies. It makes it easy to find suitable assets to fulfill your financial goals. In addition, market conditions may differ from country to country. Investors can invest in a market of their choice as per their needs.

Advantages of growth in international economies

Global investing helps you avail the benefits offered by growing economies worldwide. Developed economies are generally stable. The financial markets of such economies do not feel much effect by global events. So, assets are not highly volatile in these markets. It ensures investors’ funds are safe, bringing uniform returns. It is also easy to follow a specific investment strategy in stable markets. Further, there are growth cycles in every economy. In times of dull domestic markets, you can shift your funds to different countries. 

Scope of offshore investing

Liberalized remittance scheme was introduced way back in 2004. Yet, it makes up only about 4% of total spending in India. Investors should use the scheme to generate good returns. International markets have diverse securities. Theme-based stocks such as green energy, artificial intelligence, or infra bonds give considerable profits. Investors should make most of the use of these high-return investment options. 

Option of purchasing fractional shares

Several Indian brokerages facilitate buying a part of shares in foreign stocks. You just have to open a Demat Account with a renowned institution like Kotak Securities. They provide powerful digital platforms for trading in both domestic and foreign markets. A facility to open a Demat account and trading account online is also available. Partial buying of shares enables you to hold high-value stocks in your portfolio. 

Protection against change in currency value

The value of currencies of different countries differs greatly. Investors can use this difference to boost their revenues. Most international investments are made in dollars. The U.S. dollar is stronger than the Indian rupee. The average inflation in our country is 4%. 

The rupee depreciates due to high inflation. If you have securities in dollars, you will be able to minimise the negative impact of rupee depreciation in the future. So, foreign assets in your portfolio will safeguard your funds during a fall in currency value.

Conclusion

Given all these advantages, investors should invest in global assets. Global investment is a useful way to enlarge the scope of our investments. Indian investors can participate in the growth stories of businesses of the entire world. Be its stocks, bonds, or mutual funds; global markets contain all types of possibilities to explore. 

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