Navigating Global Share Markets: Strategies for Modern Investors

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Over the last decade, the investment ecosystem has changed, for the better. International financial markets are more accessible than before, all thanks to technology, innovation, and the evolution of regulated funds in the United States of America and other overseas destinations. Now, investors can conveniently explore several opportunities lying beyond their domestic domains, enabling them to proficiently diversify financial portfolios and witness potential increases in their investment returns.

The Global Share Market Today

With more accessibility where global share markets are concerned, international funds have excelled in the popularity charts. These kinds of funds play a key role in any investor’s portfolio giving investors an edge to tap into the growth potential and evolution of world economies. By way of diversification spread over a range of markets, sectors, and industries, investors mitigate their risk exposure.

The benefits of international investments are many but more than any other share markets, the US markets have proved to outperform others in the last few decades. The performance of US stocks is largely reflective of the resilient and healthy US economy. In terms of the global share market, the US market is in the leading position for investors within the country and from all other parts of the world. Furthermore, the success of the American markets has resulted in investors believing that other international markets appear well-priced, and ready for international investment.

Additionally, the international markets, both the US and other overseas markets, offer great potential for long-term investment. If you are an investor with a buy-and-hold strategy of investment, these are markets to look into for potential growth.

Overseas Investment - Global Gains

If you are looking to invest in the global share market, live investment is possible through digital connectivity and online share trading platforms. In India, international investment is regulated via the regulations of the Indian exchange control. Indians can make investments abroad in the form of overseas portfolio investment or overseas direct investment. Here are some of the ways that you can navigate your investment journey if you want to experiment with investment in international markets:

Investment in the Stock of Foreign-Listed Companies

Indian residents are permitted to invest in the stock of any foreign company in any overseas stock exchange with a lower than 10% stake. So, if you wish to buy stocks of Amazon or Tesla, you may do so by opening a Demat account with an overseas broker or an Indian broker with a foreign affiliation. Of course, the investment should not exceed (per year) an amount of $250,000 (under the LRS or Liberalised Remittance Scheme). For trading purposes, an overseas trading account may be opened with a broker in India having an affiliation with an overseas broker or a foreign broker with a presence in India (such as Ameritrade, Charles Schwab, etc).

Investment in Global Mutual Funds

The global share market today has opened its arms to welcome Indians who wish to have exposure to many channels of investment. Indians may invest in global mutual funds which invest in overseas stock. In this category of investment, many global exchange-traded funds or ETFs are available to Indian investors. These permit access to international indices and Nasdaq.

Investment in Global Listed Debt Instruments

In case you are a relatively low-risk Indian investor, you can try investing in the international markets giving you a stable income. You can do this by investing in listed corporate bonds of foreign entities and foreign government bonds.

Other Ways to Invest in the International Markets

The global share market today is open to you for direct investment, but you may also acquire foreign securities by way of inheritance. The inheritance may be through a resident Indian to a beneficiary or via a person who is a resident of a country other than India. The acquisition of any securities via inheritance is not considered under the regulation of the LRS restriction, that is, LRS is not applicable on such investment through inheritance.

Global Exposure

International investments give you global exposure and there are many ways to invest in securities abroad other than through direct investment. For instance, if you are an employee of a foreign company with a branch in India, and the company offers you shares under ESOP or an Employee Benefits Scheme, you are permitted to have a 10% stake in such foreign entities (listed or unlisted companies). Global investment offers you portfolio diversification and international exposure which is the crux of true investing. If you want your investment journey to be one of growth and find a way to lessen your risk, international share markets offer you a world of options. 

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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