When it comes to diversifying your stock portfolio, the majority of Indian investors will look at the US stock markets since they are one of the most established, liquid, flexible, and successful financial markets in the world.
Making a US stock investment from India, especially in growth stocks, has the potential to produce abundant wealth. Of course, understanding which are the best US growth stocks to buy is key.
The country is home to some of the world’s most successful technology and wealth-creating firms, making for fantastic investment opportunities. The NYSE trades about nine million corporate stocks and securities every day.
Some of the world’s most successful firms are listed on the NYSE, including those in technology, healthcare, and energy. In fact, the NYSE is home to 82 per cent of the companies in the S&P 500 index.
Why do you need to make US stock investments from India?
Investing in US markets allows you to take advantage of chances you would not have in your home country. Electric mobility, robotics and artificial intelligence, and special purpose acquisition companies (SPACs), to mention a few, have been conspicuously omitted from an all-domestic portfolio. Investing in US markets, therefore, diversifies both geographical and industry risk.
The US stock exchanges feature some of the companies we use every day, like Apple, Microsoft, Nike, Google, and Facebook. You may also put money into some of the most innovative businesses in industries like artificial intelligence, cloud computing, and electric cars that will expand over the next few years.
Then, why not simply compile a list of the best US stocks to buy now by market capitalisation and invest in them all? While that may sound tempting, you may wonder how is that possible?
You can easily start a US trading account with Stockal, or invest in mutual funds or exchange-traded funds (ETFs) that are exposed to US stocks. Investing in businesses and ETFs listed on US stock markets may give you access to all of these innovative sectors.
So what are the advantages of US stock investment from India, which are the best US growth stocks to buy now and how to invest in the US markets? Let’s get started.
What are the advantages of US stock investment from India?
- The US has been at the forefront of the information and technology revolution:
The United States’ technological and industrial history emphasises the country’s ascent to become one of the world’s most technologically capable nations. The abundance of land and literate labour, the prestige of entrepreneurship, and the presence of a wide number of conveniently accessible affluent and educated markets all contributed to America’s rapid industrialisation.
The building of navigable rivers and coastal canals by the free market and America’s riches of natural resources contributed significantly to the country’s rapid industrialisation.
The United States leads the world in R&D spending with $496 billion (26% share of the global total). The US received the biggest investment (almost $70 billion), accounting for slightly more than half of the total.
- Market leaders across various sectors are found in US markets:
The above point makes it glaringly apparent that all the booming sectors (EV, tech, pharma, etc.) are found in US markets.
Among the runners-up were Volkswagen Group and BYD. Tesla’s current stock price is around $ 728, with a P/E ratio of 98.34 and a market cap of $746.40 billion.
- Technology: According to KPMG’s 2018 global technology innovation report, the United States is the world’s premier technology and innovation hub, according to more than one-third of global technology industry executives. Indeed, the 34% who believed the United States showed the most promise for disruptive technological discoveries increased from 26% in the previous year’s study. The top 3 technology companies of the world are based and listed on the US stock exchange:
|Global Rank||Name||Market Value||Share Price ($)||P/E Ratio|
|1||Apple Inc.||$2.6 trillion||147||23.95|
|2||Alphabet Inc.||$1.6 trillion||108.99||20.06|
|3||Microsoft Corporation||$2.1 trillion||255||26.65|
- Pharma: The United States contributes to around 45% of the global pharmaceutical market and 22% of global output. The ongoing worldwide vaccine rollout and pent-up demand for necessary and non-essential medical treatments will increase US pharmaceutical output and sales in 2022. Brand-name medication makers’ margins grew in 2021, resulting in excellent cash flow. Pfizer, another US-based powerhouse, holds the industry’s greatest market share. Pfizer first-quarter revenue was $25.7 billion, and after-tax profits surpassed $9.3billion. In a single year. No other drug has ever matched such sales levels globally. Although you’ve certainly heard a lot about its COVID-19 vaccination, this moniker was well known before COVID. Johnson & Johnson is also well-known. The company has easily surpassed forecasts for revenue and profitability for the previous four straight quarters. Revenues increased to $23.4 billion year over year in the most recent quarter. Both these companies have become household names and have been great investments.
- Generally, the top companies globally are listed in the US markets
The US stock market is the major battleground for various worldwide giants to gather funds because it is home to some of the top blue-chip corporations and has a promising future in the post-Covid-19 environment.
Individual investors can earn in a variety of ways from the expanding US stock market and economy. Foreign money flows from small-cap equities to large-cap shares in the US stock market and from US-based businesses to corporations in Japan and China, among other places.
Different stock market indexes are in place in the United States to allow investors to participate in the growth of some of the most prominent firms, such as Facebook, Apple, Amazon, Netflix, Google, Microsoft, Starbucks, and Intel.
The United States has 55.9% of the world’s stock market capitalisation.. It controls 54.9% of the global market. Japan comes in second with 7.4%, while China comes in third with 5.4%.
The worldwide market capitalisation of the United States reached an all-time high in 2020, exceeding the previous record of 43% in 2018. Gains in US stocks, a strong dollar, and a protracted downturn in many other markets might all be attributed to this.
- Gains from USD appreciation
The instability in US stock and bond markets caused by the Federal Reserve’s shift toward tougher monetary policy has spilt over into global currency markets, with the US dollar surging versus overseas rivals.
So far this year, the dollar has gained around 8% against a basket of other major currencies. It has risen by 13.6% in the last year and has recently reached a 20-year high.
The value of the Indian rupee in relation to the US dollar is a significant element influencing your earnings in US markets. The rupee’s value has fallen by 4% to 5% in recent years, forcing investors to endure currency volatility risks.
The American dollar is one of the most significant advantages of investing in US markets. Even if your portfolio is stable, the value of your assets will increase. As a result, the stronger the dollar, the higher the growth of your portfolio.
What are the steps towards selecting your own list of top 10 US stocks to buy?
When you decide to try your hand at stock selection, your goal is to find a firm with strong fundamentals and a stock with a high value, especially if you want to own an asset for an extended period of time.
However, before you put your confidence in a company, you must thoroughly evaluate its business processes to understand its intrinsic value and determine whether it is worthy of a spot in your portfolio. Here are a few things you should know before investing in a publicly traded company:
- Determine the risk appetite and goals
Keep emotions away when making investment decisions. Don’t buy a stock just because it’s trending; don’t make any hurried purchasing or selling decisions.
Before making any investment decisions, create a personal financial roadmap. Examine your financial situation, particularly if you’ve never previously created a financial plan.
As the first step toward effective investing, determine your goals and risk tolerance, which you may accomplish on your own or with the help of a financial advisor. Your investments are not guaranteed to yield a profit.
Every investment involves some degree of risk. If you wish to invest in assets such as stocks, bonds, or mutual funds, you need to understand that most investments come with an associated risk. However, the prospect of a larger investment returns is often a sound enough incentive to take on these risks.
- Watch out for key themes in the market which are expected to do well in the future
Consider combining your traditional investing strategy with a theme approach to identify prospective investments that are linked to trends, such as breakthrough technology or a huge societal upheaval.
By concentrating on predicted long-term trends rather than individual companies or industries, thematic investing enables investors to catch structural, one-time moves that have the potential to change an entire industry.
Novel applications for drone technology, the transition to cloud computing, and the growing usage of solar power and other renewable energy sources are recent examples of game-changing breakthroughs.
One of the most difficult aspects of theme investing is recognising long-term trends. Keep in mind that not all themes generate groundbreaking or long-lasting new ideas. Some are simply transitory fads, while others may still be in their early stages of growth.
Remember all the online companies that sprung up in the late 1990s, such as pets.com? Many of these businesses ran out of money and shut down within a few years. Many of the enterprises that did survive were prohibitively expensive at the time. The trend was right, but many stocks had exorbitant valuations that crashed during the 2001-2002 stock market crash.
- Once the theme is selected, one may invest in the ETF of the respective sector, which contains all the top stocks:
As a result, while themes can serve as a beginning point for formulating investment ideas, it is critical to conduct research. Examine if you understand the trend, the exposure a certain investment offers, and whether it matches your aim, timetable, and risk tolerance.
You may also invest in ETFs on Stockal that offer the best US stocks to buy for the long term. Stockal’s website includes various tools that give you details of the ETFs and help you make better investment decisions.
What are the requirements for investing in US Stocks from India?
Investing in US shares and participating in US financial markets from India is now easier than ever, thanks to a plethora of investment opportunities.
- Open a trading account with an Indian platform that allows global investment:
Stockal is one of the better options since it does not have a minimum balance restriction, is easy to use, and allows for dollar-based investment.
- Open a trading account with a foreign broker:
You may also open an account with a broker situated in the United States, such as Charles Schwab.
- NSE IFSC:
This is your third alternative. However, it is less convenient. Tesla, Apple, Netflix, Amazon, Alphabet, Microsoft, Meta, and Walmart are currently the only US businesses covered by the NSE IFSC.
- In addition to the direct investment alternatives mentioned above, you may want to consider mutual funds and exchange-C funds (ETFs) that invest in US equities. However, the mutual fund strategy is presently unavailable since these funds have achieved the RBI’s maximum restriction.
Frequently asked questions:
- How to conclude which are the best US stocks to buy now?
While the best stocks depend on your type of investment style and research, here is a list of major companies to start out with (remember to do your own research before investing).
Best US stocks to buy for long term in December 2023
|Stock Name||Stock Price||Change||Market Cap ($)|
|$ 150.05||1.06%||2.429 T|
|$ 256.86||1.09%||1.921 T|
|$ 2,235.57||1.28%||1.524 T|
|Alphabet Inc. – Class A Shares|
|$ 2,255.03||1.18%||1.523 T|
|Alphabet Inc. – Class C Shares|
|$ 113.49||2.60%||1.155 T|
|$ 719.77||0.68%||745.963 B|
|$ 196.64||0.51%||561.211 B|
|Meta Platforms Inc|
|$ 529.43||5.37%||496.696 B|
|UnitedHealth Group Incorporated|
|Johnson & Johnson||$ 178.23||1.45%||468.995 B|
- What is the LRS?
You may purchase shares of US companies through the LRS, or Liberalized Remittance Scheme, of the RBI. Any Indian resident may contribute up to $250,000 annually under the idea. A family of four is permitted to transfer up to USD $1 million per fiscal year due to this restriction, which is per person and includes children. Any assets, including US stocks, properties, bank accounts, and all foreign expenditures, such as international travel and higher education, are prohibited.