Milieu Of Advantages And Steps Of Investing In US Equity Markets
Dressing the investment portfolio with the stocks of reputed companies or well-known brands from the US is a prevalent trend now among the Indian investors. Indian investors looking for diversification should have opted for playing in global equity market. In this scenario, the US market has posed as a favorable option for them.[wp_ad_camp_5]
Collaboration with Indian companies
Due to a recent collaboration, Indian investors can now access approximately eighty stock exchanges in eighteen countries. The Reserve Bank of India now permits Indians to remit 125,000 USD per financial year. You can invest in overseas Equity Markets or in Option Segments but margin trading is not allowed as per RBI guidelines(Playing in Overseas Futures Market or CFD market are not allowed for Indian Retail Investors). Abiding by this rule, the ICICI bank now facilitates its customers in trading in different Stocks across various exchanges in the US. So the investors can now opt for equities, stock options, ETF or Exchange Traded Funds and Index Options. The facility is only available to resident individuals and not available to corporate, partnership firms, HUF, Trusts, and NRIs. Of late, few of the mutual fund companies from India have also partnered with Saxo Capital Markets thus providing a global market to the Indian clients. So, the investors can now opt for ETF, REITS and equities in stock exchanges in various countries.
TD Ameritrade or Charles Schwab, Zecco , Robinhood, Scotttrade are good US online brokers you can open a direct account with them, however from what I read they are more for US nationals holding Social Security. Further with the recent events and KYC norms becoming more stringent, it would be difficult for an individual [Indian Citizen] to open an account directly with these firms. Moreover Overseas currency depreciation compared to local currency is the key risk in such investments abroad.
ICICI Direct, Reliance Money, Interactive Brokers(Mumbai) are some of the Indian Stock Brokers Providing access to US Equity Markets.
Status of US equities
However, the assets that will be traded by the Indian investors solely depend on their financial goals. If the investors are looking for regular income then Fixed Income Securities are advisable, and for capital appreciation traders need to invest in equity. The US equities account for the major share of global equity and it is almost fifty percent of the global share. Owing to the global presence, these companies alleviate the risks that are country specific. Instead, investors can take leverage of the growing economy.
Growth in US market
The US equity market is also known to be the most diversified one across the globe. Two sectors that contribute to almost thirty four percent of the market capitalization are technology and finance. According to the financial experts, the US market has shown signs of economic recovery in the last few years. There has also been a rise in the confidence index and there has also been a boost in the balance sheet of the corporate organizations. However, for the Indian investors, tracking the market in US can be a daunting task, so mutual funds can be a good resort.
12 Replies to “How to Invest in US Equity Markets”
I am investing in US stock through TD Ameritrade mostly in ETFs. Is this perfectly legal? As per LRS they mentioned that “Margin trades are also not allowed”. All I have is a cash account and can’t do any margin trading at all. So am I doing right?
Yes it is legal to invest in ETF. But not in mutual funds. And yes anything related to Margin Trades are illegal as per RBI specs.
Thank you. Once more question… there is one more thing called ETN (Exchange Traded Note). Is that also ok? It also looks like an ETF.
Opening TD Ameritrade account is very easy. All you need is a valid passport and send the application form along with W-8 in post. That’s it.
Thanks for the info.
I don’t think Scottrade allows trading from India. I did contact them once about this.
Of late several FOREIGN softwares are being marketed by emails on Automatic Trading like Tauribot , Profit crusher , Zulander Hack , which require you to register and deposit min. $250 with a broker suggested in the software , and tardes are automated .Can we Indian residents use this trading which I thjisnk is in US srocks ??
Anything that involves margin trading you cannot trade in those stuff (in overseas markets)
I want to trade on binary options trading. Is it legal in India. Please response me.
It is illegal in India as per RBI guidelines.
I am planning to invest in FOREX trading through AxiTrader (business name of AxiCorp Limited, authorised and regulated by the Financial Conduct Authority of the United Kingdom). Is this legal?
Indian Retail Traders are not allowed to trade in overseas margin trading segments. However investments in stocks or naked options are allowed but with certain limitations. It is still a grey area but lots of warnings already from Banks and RBI about overseas margin segment.