Why Invest in the US?

If you are looking into how to buy US stocks in India, you might also want to look in detail at what the reasons are to invest in US stocks. There are several reasons apart from diversification and liquidity that come into account when investing in the US stock market. Read this article to find out how to buy US stocks with Stockal.

• Stellar past track record of growth

The United States quickly became the world’s top military, political, and economic force during the 20th century. It became the only superpower in the globe after communism fell. Additionally, it is the top oil producer in the world. America is a financial superpower as well. Its economy is the biggest in the world, and the dollar serves as the reserve currency. On an investable free-float basis, its stock market represents 60% of all global value, which is over ten times more than Japan, its main rival. In addition, the largest bond market in the world is located in the USA.

The US stock markets are undoubtedly the best-documented in the globe. Until recently, most of the long-run evidence referenced on historical investment success was mainly based on US experience. The US equities market has provided a yearly positive return of 6.7% since 1900, the best return in the common currency of any Yearbook nation. However, over-reliance on US stocks’ strong historical long-term performance carries a clear risk. Origins of the New York Stock Exchange can be found in 1792.

The Dutch and British stock markets had been around for around 200 and 100 years, respectively, at that point. Thus, the USA went from having no weight in the global equities market to having 60% of it in only a little more than 200 years. So, does that make you wonder how to buy US stocks in India? Take a look at the annualized real USD returns and risk premiums (in percentage) for the USA, 1900-2021:

• Productivity Growth in the Developed Market

If you want to find out how to buy US stocks in India, it might be of help to look into the productivity growth in the US, too. Productivity rose by 4.7 percent in manufacturing, while labor expenses per unit fell by 0.2 percent. However, the productivity growth in the retail sector slowed in 2021 after reaching a peak in 2020. On the other hand, productivity in the wholesale trade increased by 5.7%, driven mostly by the durable goods sector.

• More Liquidity, Greater Diversification, and Better Capitalisation

While you look at how to buy US stocks in India, it is essential to note that the US market is the world’s most accessible, largest, transparent, and liquid financial market. The number of listed firms, market value, and volume of transactions give this market a special investment potential for foreign investors. Moreover, the largest single concentration of fortune in history can be found in the American stock exchanges. The NASDAQ and New York Stock Exchange collectively make up the world’s largest financial market.

The NYSE is the greatest stock exchange in the world, with a market capitalization as of June 2022 being US$25.85 trillion. NASDAQ is the second largest stock exchange on the list, with a combined market value of US$17.36 trillion as of June 2022. This implies that you have a fair possibility of always being able to locate a seller or a buyer for any stock. American businesses looking for funding have access to a wide range of marketplaces in the United States. You may invest in significant organizations and internationally recognized brands that sell their shares here, and there are close to 5,000 firms to select from.

• Other Reasons Like Diversification

Diversification is primarily built on four pillars: industry-based, time-based, geography-based, and asset-based. Portfolios lack geographic diversification, even though most investors do a respectable job of diversifying across time periods, industries, and assets. Using a geography-based diversification approach, you can avoid having all your investments concentrated in one region. Adding to the diversification of your portfolio is investing in US stock markets. By doing this, you eliminate currency or single-country risk.

The US stock markets list some of the companies we use every day, such as Apple, Nike, Microsoft, and Facebook. Investments could be made in some of the next innovative businesses in industries that will expand over the coming years, like cloud computing, artificial intelligence, and electric vehicles, in addition to these businesses. Investing in companies and ETFs listed on US stock exchanges exposes you to all of these industries. In addition, we all aspire to live, travel, or even study abroad in other countries (for ourselves or our kids). Since your investment is made in USD when you invest in the US stock market, you may save for all these international goals without worrying about currency risk.

The world in which we live is constantly developing. The United States has abundant resources and draws talented minds from throughout the globe. US businesses continuously innovate to offer innovative solutions. Companies like Tesla, Meta, and Amazon have recently been working in various fields to develop innovative solutions.

The Case for Always Staying Invested in US Markets

Most of the major indices are down for the week on the global markets, which have seen another week of ups and downs. Inflation, geopolitics, central bank policy, and their implications for your outlook and portfolio strategy have all been topics of discussion recently in the US market. The possibility that these dynamics will keep the market volatile for some time has been recognized.

A varied portfolio is supposed to be able to lessen losses in the case of a market drop. To be clear, while the US stock market is soaring, a varied portfolio would not keep up with one made up entirely of equities. However, this idea is all about minimizing the drawbacks. While looking at how to buy US stocks in India, remember that diversification has historically sped up portfolio value recovery by assisting investors in avoiding the full impact of market downturns and smoothing out the ride.

The graph below shows what has occurred when an investor has missed the ten finest trading days over the course of the last 20 years. If you think it’s impossible to ignore the ten finest days, keep in mind that seven of them occurred within only two weeks of the ten harshest days of the previous 20 years.

Have a good thought before you exit the market if the next time stock market volatility is frightful enough to make you doubt your long-term investment approach. 70% of the time, you might miss one of your best days. By avoiding the hazards of emotionally motivated, poorly timed mistakes, investors can achieve desired long-term investment targets by utilizing diversification, experience in the market, and a level mind. Keep the lessons of tried-and-true investing ideas in mind whenever market conditions become challenging, and you start to feel uneasy.

Reasons Why You Should Buy US Stocks Right Now

• Good Jobs Report:

The number of jobs added by companies in July was 528,000, which was more than predicted. Moreover, the market appears to be the tightest it has been in years, according to several data, including the number of job postings per application, quit rates, and income differences between job switchers and stayers. This is corroborated by the Atlanta Fed’s wage tracker’s highest-ever reading, which shows a 7.2% yearly growth rate.

• Valuations Appear Attractive

The US stock market valuations appear attractive at the moment. For example, the estimates for the next 12 months’ consensus earnings are a total of $240. Take a look at the chart below to understand the current valuations in the market before you look further into how to buy US stocks from India:

• Excess Savings Built During the Pandemic are Still Providing a Cushion to Consumer Spending 

Due to pandemic restrictions, high-income families saved money by forgoing vacations, dining out, and other typical expenditures. Strong government aid, such as increased unemployment benefits, stimulus cheques, and housing and food assistance, assisted low- and middle-income families. According to Zandi, by May 2022, Americans’ overall surplus savings had fallen to $2.5 trillion, and over 10% of the GDP. As you plan on how to buy US stocks from India, here are the consumer finances numbers in the US for you to check out:

• Household Debt Service Ratio Lower than 2008-09

The traditional measure of household debt, consumer credit as a share of national income, has been falling since the 2008–2009 financial crisis. As the economy ended its shift from high-waged manufacturing to low-paying service-sector employment, households were dealing with housing market losses, job losses, and the decelerating increase of real personal income. As a result, consumer debt as a share of nominal gross domestic product decreased from 98% during 2008 to 74% in the months prior to the pandemic.

Stockal Brings You the Best of the US Markets

Those seeking international market diversification can consider making large investments in the US stock market. A low correlation between the two most significant economies on earth can produce high-risk-adjusted returns over a long period of investing. Several ETFs that focus on different industrial sectors or prominent US indices are available for investment, or specific US stocks like Apple, Google, Amazon, or Facebook could also be bought. Exchange-traded funds monitor the Nasdaq 100 and the S&P 500, the two most significant US stock market indices (ETFs).

Are you interested to know how to buy US shares from India through an investment app? Stockal has launched its smartphone app, which facilitates investment and aids Indian investors in purchasing equities listed on foreign markets. Stockal allows you to choose from over 5500 global stocks and ETFs. In addition, it provides quick financial transfers and a straightforward user interface. Take a look at this video to see how you can buy stocks for as little as $1 with fractional investing options offered by Stockal.

Here are some of the products that Stockal offers once you create your free account:

• ETFs: An exchange-traded fund, which is a collection of assets, is traded on the market precisely like a stock. In contrast to mutual funds, ETF share prices change throughout the day when the ETF is bought and sold. In ETFs, you can find stocks, bonds, commodities, and other investment types; some only offer assets from the US, while others are global. ETFs have lower expense ratios and broker charges than buying the stocks separately. Apple Inc, Amazon.com Inc., and Tesla Inc. and are among some of the EFTs available on Stockal.
• Stacks: Stacks are created on Stockal by hedge funds, global asset management companies, seasoned financial advisory firms, and portfolio managers. You can diversify your assets with only one click, negating the need for extensive research. The platform was created by investing experts based on extensive research and financial analysis. It also has an active rebalancing element to ensure alignment with goals and benchmarks. Electric Vehicle Portfolio, Omniscience Supreme US,  and US Tech Bluechip Portfolio are a few of the stacks available on Stockal.
• Research Products: Stockal offers techniques for technical analysis that can help traders make logical decisions. Buy and sell indications can be found in a technical analysis, which can aid in spotting fresh trading chances. Analysts employ various indicators and toolkits to analyze the stock market. These instruments, which mostly comprise market indicators, should be used by the top broker for US stocks in India to forecast price movements for all significant financial indexes. The movement of numerous oscillators and indicators serves as the foundation for trend analysis and is used to generate buy and sell signals.

As Stockal is a neo-brokerage that enables regular Indian investors worldwide to create cross-border savings and investments, it is the best app for the US stock market. Stockal presently provides investors from India and the Middle East with access to more than 5,500 stocks and exchange-traded funds listed on U.S. exchanges through its platform. Investors have various options, including direct stock investing, ETF purchases, and international portfolios prepared by financial experts. Stockal’s global investing platform powers some of the largest brokerage companies, fintech platforms, wealth management companies, and Robo-advisors in India and the Middle East. These support thousands of investors daily as they globalize their assets and money.

Rounding Up

Now that you know how investing in US stocks can be beneficial and how Stockal makes it easy, you could read more on how to buy US shares from India on Stockal.