Difference between Indian Stock Investing and US Stock Investing

1. Difference between Indian Stock Investing and US Stock Investing Given the multinational corporations listed on its stock markets, you as an Indian investor must have considered investing in the US stock market. Who wouldn't want to gain international exposure and join one of the MNCs with the fastest growth rates in a lucrative market? However, exposing your portfolio to the US stock market raises a number of concerns, such as: Is it secure to buy US stocks? How different is disinvesting in Indian markets from investing in US stocks? What variables affect investment choices in the US market? Can an Indian invest a certain amount in US stocks? Can Indian investors buy equities in the US? It is crucial that you conduct research in order to respond to these inquiries. Factors that assist you to distinguish between investing in Indian and US stocks Market volatility Volatility refers to the swings in the market. We know that the stock markets are subject to constant fluctuations and volatility measures

2. how frequent and significant they are. It is calculated as the standard deviation of returns around the mean (average) of the returns. The higher the volatility, the higher the risk in the market. Size and valuation of the market The US stock market is much larger in size as well as valuation. As of January 2022, the US stock market holds about a 59.9% share in the value of total world equity markets. In contrast, India has a share of only about 1.5%. If we look at it from the point of view of market capitalization, in March 2022, the Indian stock market stood among the top five stock markets with a market cap of $3.21 Trillion. However, it still lagged behind the US stock market, which topped the list at a whopping $47.32 Trillion market cap. Currency of exchange When you invest in the US stock market, you will be dealing in terms of US dollars (USD). This is because most of the companies listed on US exchanges are based in the United States. Similarly, when you invest in the Indian stock market, you will be using Indian rupees (INR) as the currency of exchange. Regulation The Securities and Exchange Board of India (SEBI) regulates the Indian stock market. Its counterpart in the US is the Securities and Exchange Commission (SEC). Both these regulators play a major role in overseeing the everyday activities in their respective stock exchanges. SEBI was set up as a statutory body in the year 1992. Ever since then, it has been the primary body that regulates the Indian stock exchanges. Moreover, it works towards developing the stock market, providing information to all the market players, and most importantly, protecting the interests of the investors. It also has the

3. power to investigate any matter that pertains to the stock markets in India. Research requirement Before investing in the shares of any company, it is very important to conduct proper research about its growth prospects, the fundamentals of its stocks, the stability of its profits, its dividend policy, and more. All this information must be freely available to the investors for them to make a rational and well-informed decision. Top performing sectors The top-performing sectors in the Indian stock market are different from the top-performing sectors in the US stock market. In India, the top-performing sectors are typically those that are linked to the country’s economic growth, such as infrastructure and resources. If you look at the stock market situation in 2022, there has been a fall in the market. Many top-performing sectors have faced the brunt of massive sell-offs. However, the sectors that stood their ground even during such a phase include metals, utilities, and power. Global Exposure A vast majority of multinational corporations are listed on the US stock exchange, including big names like Amazon, Meta, Google, and many more. These multinationals operate across the globe and are affected by the events in many different countries. This gives the US stock market a lot of global exposure. Read More about India vs us stock investing