Investing in international stocks may seem a little intimidating. The process is technical and innovation on the part of fund houses and trading platforms has also been made very easy.
Before we get into how to get into international stocks – let’s make sure
Q. Have you considered your risk tolerance?
Q. Are you aware of the risk involved?
Q. Are you risking this amount of capital to gain potential income?
Q. Do you have adequate knowledge of how and when to buy and sell stocks and minimize losses?
Q. Do you have a steady income or some capital saved up that will give you enough returns should your international stock market move… well… not move like a jagger?
If you say yes to all of the above. You are indeed ready – at least in terms of mindset – to invest in international stocks.
Another important factor – when you are investing in international stocks. you need to pay attention not only to the currency exchange rate between your country and the stock’s country. For example, imagine an investor who has made 1000 USD on some trades made when the dollar is worth Rs 74 today. If the dollar plunges to ₹ 65 apes or Rs 81 apes, the value of its earnings will be very different. Regulating the story – Both stock prices and temporary currency rates can seriously affect your earnings when investing in international stocks. An example related to exiting a trade. Likewise, when it comes to entering a trade (or buying a stock) – usually for a stock with a stable price, an investor can wait for a day where his rupees will buy him more dollars.
If you’re willing to keep track of all the moving pieces. Take risks for potentially high rewards. if you want to be part of the success stories of major global corporations, let’s take a quick look at the different ways to invest in international stocks.
When it comes to buying and selling international stocks. you really have six options available to you. There are three direct and indirect investment routes. In the past, most mature investors did not have the choice to go with indirect investment routes as there were only two direct routes and both were expensive as well as tricky.
Starting with the pre-existing ones, let’s start with the three direct investing methods.
This will also show you that the new option is particularly relevant and useful at this time.
Three Direct Investment Method
Direct Investment Method 1: – Open an international trading account
Some institutions like Vested Finance offer investors the option to buy and sell international stocks.
The following advice should be kept in mind if you choose this kind of direct investing option.
- Different institutions will have specific restrictions on things like the number of trades you can make in a day or a year.
- Likewise, not all investment options may be available at the institution you choose. Check in advance what you want.
- Understand fees, charges and fee structure. In some cases you may find that bubble advertising has no account opening fees, and indeed that may be the case but there will still be annual maintenance charges and possibly other charges and commissions.
- Always verify the company you want to use for your investment.
Direct Investment Option 2: – Open an account with an international broking firm
If you have the confidence and financial resources you can open an account with an international broking firm. You are sure to face less restrictions on investment types and you can do it in a day with this option. However precautions must be taken for firm verification and keeping a check on fees and charges.
Direct Investment Option 3: – Just download the trading app on your phone
If you’re starting to wonder if you can invest in international stocks at this rate, you’re not alone. Remember what we said at the beginning: until this third option came along, many international stock market investors had no choice but to go indirect. Option 3 is very easy app-based buying and selling of international stocks.
Signing up is a piece of cake. All you need to do is download the app (free) on your smartphone, then go through the KYC process and viola! In 3 business days, you are ready to invest.
App based trading is more convenient because it can be done anytime and anywhere and because you get real-time updates. Also, especially with angel broking app, users get
Commission free trading, although wiring fees, forex transmission fees and account maintenance charges may apply.
Fractional investment, where you share your capital for a minimal single dollar amount – with other investors to buy huge territories like Amazon and Google.
Prepared portfolios, called vests, save early investors the stress and illusion of free choice.
Indirect investment entails selecting investment opportunities that are tied to the stock market – for instance, individuals may opt for mutual funds due to a lack of confidence or risk tolerance to directly invest in stocks.
Invest indirectly in international stocks through Indian mutual funds
Indirect Investment Method 1: – Invest in Indian mutual funds that hold foreign stocks
As with any mutual fund investment, your capital is subject to some risk but is placed in the capable hands of a fund manager who will invest capital in international stocks. You need to choose funds with names from other countries.
Indirect Investment Method 2: – Invest in FOFS
FOF, which stands for Fund of Funds, is a type of mutual fund investment. The fund invests in a carefully selected portfolio of Indian and international stocks, bonds, other mutual funds and other asset classes. If your goal is to invest in international stocks, you need to identify funds that focus on international stocks, bonds and mutual funds.
Indirect Investment Method 3: – Invest in ETFS
Exchange traded funds sell on the stock market, such as stocks, and invest in bonds and mutual funds, such as mutual funds. To gain access to international stocks you should look into buying ETFs on the Indian stock market that invest in international stocks, bonds and mutual funds.
Choose an investment method that you find easy from the list here and get started. Always remember, everyone is different from their age, their gender or what they do. Start your investment dreams with Angel Broking.
