Are You Thinking about Investing Your Money In International Stock Market From India? Read this Article To Understand Key Points About Foreign Stock Market
One reason, in my view, for why international transactions are often calculated in US dollars is its rich economic history among global transactions. While communism moved across many nations during this time (also giving way to fascism but that’s another story), its effects largely stayed out of US as its economy more or less remained mixed with some tendencies toward capitalism – so much so that one of its first few economies (if one counts UK colonies as economies (#represent)) to start participating in international trade and remain involved.
No surprise here; China ranks among the largest economies when measured by economic value added. I will provide further details later.
Why Should You Invest in US Stocks? I am pleased to inform you there are multiple reasons. In fact, I shall make it my mission to make you explore them all before offering up any practical steps for doing it if that is what sways your decision.
1. Money but More… mes No matter the cause, but one undeniable truth has emerged over recent decades: US markets have outshone Indian ones in terms of value addition. This may be attributable to tech empires in Silicon Valley or America’s growing appetite for oil; either way it happened; for example during this last decade the DOW delivered 196%, while SENSEX maxed out at 150% which was clearly less.
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Over the past decade or two, Indian rupee (INR) exchange rate has shrunk in international markets while USD has shown gains, creating a notional loss or opportunity loss that represents 44% decrease since 2010.
2. Global Portfolio I will introduce you to an argument of closed economies from prehistoric trading desk ages. Economic investments typically represent any surplus after consumption and savings have been allocated; when marketplaces were physical, investment markets also had physical manifestations due to communication barriers preventing large scale trading desk trading desk activities from taking place – creating more of a local approach than its global equivalents today. Since then however, supply chains have become so interlinked globally that products made in Bangladesh sweatshops can now reach anywhere without charge in US or India markets.
Since products can reach all corners of the world, why should investments not?
The main advantage is that products do not rely on geographical considerations to define their target markets, so while you might anticipate an increase or decrease in local demand for your product, the parent company itself can invest to capitalize on it (I will argue against anyone arguing that any change or fluctuation doesn’t matter for an MNC as demand patterns will often repeat themselves over similar demographics).
How Can I Invest in US Stocks
There are various methods you can take when looking to invest in US stocks:
1. Establish an Account With a Broker
In this context, brokers fall into two main categories; Indian brokers that enable global trading via international subsidiaries and global brokers who specialize in select markets like US/Hong Kong or UK. Fees on both can differ as do their offerings – usually we’re discussing currencies, equity, debt futures and options contracts.
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One downside of this system is investment limits. Since you will likely remit funds to an international brokerage entity anyway, that amount will fall under Liberalised Remittance Scheme’s cap of $250,000 annually per person.
2. Mutual Funds
A much simpler and faster method is investing in mutual funds that invest money across international markets. Doing this saves both time and effort spent researching; moreover, these managers often know more than you do due to being professionals themselves; plus there’s no hassle of remitting money or reaching an investment cap – though bear in mind these funds tend to charge higher for all that!
Tax and Stuff
First things first: both methods would be taxed as capital gains in terms of income received through buying and selling transactions, subject to standard capital gains tax rules for duration; less than 24 months is short-term while longer is long-term taxation. Thanks to India being part of Double Taxation Avoidance Agreement (DTAA), only once tax will be due here and any dividends earned that would otherwise be subject to US tax would qualify for Foreign Tax Credit instead.
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