Investing in stocks has always been a daunting task for anyone who wants to grow their wealth. However, investments in stock markets, both national and global, do not have to be a gigantic task if you are in the right direction. Understanding the fundamentals of the stock market can help you invest in any stock market in the world. An increasing number of Indians are seeking assistance investing in the US stock markets. Some people, however, want to make the investment journey on their own by doing their research on markets, companies, industries and geographies.
Here is a list of things to know before you start investing in the American index, Nasdaq.
Take advantage of investment opportunities.
Compared to the rest of the developed world, India is a small and mid-cap market, limiting possibilities to invest in large cap markets and companies. Large-cap companies in India are very few and limited to certain sectors. The United States, on the other hand, is a larger market and has enough mega and large-cap companies, providing opportunities to diversify.
Today, a number of US-listed companies are also gaining opportunities in the newer industries with global changes in the energy industry, with the scope of renewable energy expanding. Space tourism, online entertainment, and e-commerce provide investment opportunities. Investors who want to take advantage of those opportunities can invest in stocks listed in the United States. Amazon, Zoom, Netflix, Microsoft and Tesla are Nasdaq-listed companies.
The final expectation of an investment in any instrument is the return. The Blue-chip Nifty Index has risen 29 percent in the past five years. On the other hand, the Nasdaq has risen 108 percent over the same period. The difference is thus substantial.
Touching the tech giants
Indian investors are interested in investing in tech giants that are changing the way people live and work. The world’s tech giants are featured on Nasdaq. Investing in the index will help investors participate in its growth story. Investing in foreign markets will definitely help investors in geographic diversification and will also help mitigate the risk of currency fluctuations.
You should not invest your entire sum in any stock market, no matter how good or bad the performance is. Start by investing 10 to 15 percent of your investment portfolio in global markets by choosing individual stocks or through the mutual fund route.