Every investment 101 guide lists geographical diversification as the cornerstone of lucrative investment strategies. Given the promising big tech giants and budding startups ruling the US stock market, seizing investment opportunities there is a no-brainer. However, in everything from size and currency to basic investment norms, investing in India vs. the USA spells a whole different ball game. Let’s take a deep dive into the Indian stock market as compared to the US stock market comparison is needed.
Before we proceed to the US stock market vs. Indian stock market comparison, here’s a quick overview of both markets:
Indian Stock Market
The US Stock Market
This US vs. Indian stock market comparison shows the clear benefits of US portfolio diversification. The global exposure of this market helps moderate market movements in the long run, balancing out volatility and hedging risks associated with a hyper-volatile domestic market. Similarly, since the investment is in USD, there’s also a possibility of higher returns, given the history of dollar appreciation.
This Indian stock market vs. US stock market comparison brings out the highs and lows of investing in each. That said, exposing your portfolio to the US market with a calculated and risk-analysed strategy can help bring about necessary diversification and tap into the benefits of its global affinity.
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The Us stock market commands a market capitalisation of $40.51 Trillion. The Indian stock market has a market cap of $3.4 Trillion. So, the US market is more than 10 times bigger than its Indian counterpart.
While the US stock market is based on the custodial model, the Indian market is based on a depository model. Moreover, the US market is governed by the SEC or Securities and Exchange Commission, while the Indian market is governed by SEBI or the Securities and Exchange Board of India.
The Indian stock market has primarily domestic companies listed on its exchanges, while the US market is home to some of the most prominent global companies. So, you can find top US companies as well as major corporations from China, London, and other top cities.