How To Guide

Investing in US Market From India - The Complete Guide

August 25, 2020

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In this piece, we'll tell you how you can buy US Equities and get your hands on some American stocks right here from India! But hold up… first, let's see why people invest in the US Stock Market in the first place. If you're ready to jump right into it you should also check out our list of the best international mutual funds to invest in India.

Why Do People Invest in the US Stock Market?

Defend Against the Rising Dollar

One basic reason to invest in the US is to protect your wealth from eroding against the rising value of the US Dollar. Every time the rupee falls against the dollar you’ll know you have some wealth that’s growing.

To Create a Nest Egg

Investing in US Stocks makes even more sense if you plan to live in America or have children studying abroad. You also get to participate in one of the world’s most mature economies and earn interest in dollars.

Invest in Companies You Love

Whether it is Facebook, Google, McDonald’s, KFC or NIKE, you’ve loved these US Companies and know them in and out. You’ve used their products and can trust them. Investing in a company you understand always helps you make wiser decisions.

Geographical Diversification

USA’s Gross Domestic Product is almost 10 times that of India. That means you are participating in a much larger market with US-listed companies accounting for almost 35% – 40% of the world’s market capitalization.

Historical Performance

The Dow Jones Index and the NASDAQ have outperformed our humble NIFTY and SENSEX. So much so that many times the US market rose when ours fell.

Taxes for Investing in the US Stock Market?

So far investing directly in US equities from India was a complicated and painful process. For example, dividends earned by from, the US-listed equity Mutual Funds are subject to a withholding tax. There are also other forex issues and tax laws that might scare you. Luckily, you can easily invest in US stocks using Cube Wealth. A Cube Wealth Coach can guide you through the whole process on a simple chat via the Cube Wealth App. Whether you want to invest in Apple, Microsoft, General Electric or Exxon Mobil, US Equity investments through Cube Wealth is your VISA on arrival.

What Are The Popular US Market Indices?

Just like we have the SENSEX and NIFTY that traded NSE & BSE in India, the US Market has its own indices & stock markets.

The Main Indices are:

  1. DJIA – The Dow Jones Industrial Average
  2. S&P500 -There is also the Standard & Poor’s 500

The companies that collectively make up the S&P 500 and DJIA are then traded on NASDAQ & NYSE which are stock exchanges.

  1. NYSE – New York Stock Exchange is the largest stock exchange in the world.
  2. NASDAQ – National Association of Securities Dealers Automated Quotations is the 2nd largest stock exchange in the world.

You can also learn about How to Start Investing in Stocks through our Complete Guide, in case this would be your first time.

How Can You Invest in The US Stock Market From India?

You need a broker to help you trade US stocks from India. You will have to create a trading account with a brokerage house and get your KYC done by giving your PAN, Bank Account, Voter ID, Bank Statement, etc. Post this you’ll need to transfer funds into your account to trade US stocks.

The easiest way to go through all this in a smooth and nearly automated manner is through the Cube Wealth App. Cube’s in-app support will help you through everything.

You can also Email us for free step by step guidance.

You should also go through our story on Investing in International Markets from India to understand the overall scenario better

What Are The Risks of Investing in the US Stock Market?

There are of course some risks that you must keep in mind. It’s not easy keeping track of a foreign market without an app like Cube Wealth, that frees you from that stress. You will also need to consider the higher risk as your losses and gains will both be in dollars. Liquidity is also lesser than Indian investments. Higher charges and brokerage can also be a concern if you’re not a Cube user. You’ll also have to keep a close eye on global factors and economic conditions that can affect the performance of US stocks.

In order to be able to ensure such risks don’t effect you much, you can also take some pointers from our episode of the Cube Wealth show on How to Build Positive Investing Habits.

FAQs - Frequently Asked Questions

Can I Invest in NASDAQ from India?

Yes, you can invest in NASDAQ from India. However, you can do so only through a brokerage firm and using a trading account. The easiest way to invest in US Stocks is using the Cube Wealth App.

What are the major stock exchanges in the US?

The NYSE – New York Stock Exchange and the NASDAQ – National Association of Securities Dealers Automated Quotations are the two major US stock exchanges.

Why Are Risks Higher for Investing in US Stocks?

The risks are higher when investing in US stocks because you are investing in a market you can’t always keep track of. The lower liquidity and the fact that your losses will also be in USD further adds to that.

Should I Invest in US Stocks for the Short-Term?

Whether you should invest in US stocks for short term depends on a lot of factors like your goal, risk appetite and investment amount. Please consult a Cube Wealth Advisor before making any investments.

Rishabh P Nair
Rishabh P Nair is the Head Of Brand Content at Cube Wealth. Rishabh has been weaving stories for over 10 years and prides himself on building brands with a strong identity.

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  • Alternative Investments

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