How To Invest in US Stock From India

It is generally believed that as our income grows, so does the investment. Right? However, according to the "India Investment Report 2020: A look at how India Invests" study on Indian investment practices, the high-income category has the least segmentation in investments.

This is surprising. It shows how people put off investing owing to the everyday hustle and tend to revisit their investments only when the tax season is approaching.

The widespread assumption is that investing is either early or late at any given time. However, one must actually start investing as soon as one decides to do so, which is NOW.

The secret to attaining all your financial objectives is to develop a future financial plan.

How to choose the best investment plan?

Various investment products, such as an upcoming IPO, come with varying degrees of risk and promise varying rewards. There is no single investment product that can meet all of the demands.

To achieve their goals, investors must thus carefully build a portfolio of different investment products based on their time horizon, risk tolerance, and projected returns.

Types of investment plans

Let us examine the numerous types of investments available to investors:

1. IPOs

Investing in IPOs (Initial Public Offerings) is one of the best strategies to build money for long-term objectives.

When securities are initially made available to the general public in the primary market, it is known as an initial public offering.

As soon as a company is listed on a stock exchange, it becomes a publicly traded corporation. Its shares are available in the open market (known as the secondary market) for trading.

Investing in an IPO means investors are investing in the early stages of the company with huge potential to increase in value.

The long-term potential for stock investments to increase one’s money is enormous, but substantial hazards are also involved.

2. International Investing

Investors can invest internationally in US stocks or international mutual funds.

1. US stocks

If investors are thinking about how to invest in US stock from India, they can do it in the following ways;

Investors may create an international trading account with a domestic broker who collaborates with US stockbrokers under direct investment.

Investors also have the option to open an international trading account with a US broker who has an existence in India.

Moreover, investors can invest in US stocks through ETFs or mutual funds.

1. International mutual funds

International equity funds make investments in equities of companies that are not listed in India. With the aid of these funds, investors may invest in some of the most valuable businesses in the world.

3. Government Securities

Investors can add some safe instruments like Government securities if they want to add diversification to their portfolio.

1. Sukanya Samriddhi Scheme

The Sukanya Samriddhi Yojana (SSY) is a government-sponsored savings scheme for girls. It may be opened by the parents of a girl under the age of 10 and is a component of the Beti Bachao, Beti Padhao Yojana. Opening an SSY account is possible at specific banks or post offices.

The SSY program offers various tax advantages and a higher interest rate.

1. PPF

Public Provident Fund (PPF), a government-backed investment product, is regarded as one of the safest options among India’s various forms of investments. Investors can invest in PPF through a bank or post office.

Under this scheme, investors can receive certain tax deductions u/s 80C.

1. Post office schemes

Like bank FDs, post offices provide post office time deposits. Here, investors can place their funds in these deposits for the short to medium term. Moreover, they offer a higher yield than banks.

Moreover, the risk is minimal because the Indian government supports these schemes.

4. Mutual funds

Mutual funds are instruments where investors do not invest in a single asset but in multiple instruments, such as equity, gold, bonds, cash, etc.

This instrument provides expert assistance and diversification, which lowers the chance of avoiding wealth-destroyers and improves the odds of yielding profitable returns over time.

5. Real estate

Among Indians, it is without a doubt one of the most popular investment options. Although historically yielding enormous gains, real estate investments are not without risk. One of the hazards associated with real estate is the potential for a slow sales process.

Conclusion

Finding various investment options is easy, but it is essential to evaluate each of them per the suitability of your financial situation/goals. Taking consideration of taxes is an important aspect, and ensure you cover all relevant sections such as 80 C, 80D, etc.

Nancy Ahuja is a self-dependent girl who has been running her business for the last 3 years in Delhi. She has a couple of years of experience in the field of business and loves to write about finance, gadgets, business, and lifestyle.