3 Reasons Why You Should Invest In Global Market
                     3 Reasons Why You Should Invest In Global Market
Description
In the current world scenario, the investment options are not restricted by geographical 
boundaries. An investor can invest in any kind of share market around the globe. Many young 
professionals consider investing their money in the international share market as it allows them to 
diversify their portfolio by spreading out their international stock exchange risk, thus providing 
them great exposure to various growing economical global stock markets like the U.S stock 
exchange, London stock exchange, etc.
Here are few reasons why investing in an international share market can prove to be fruitful for 
the investor;
1. International Diversification
An international investment diversification was studied in the early 1960s and the observations 
have shown that by diversifying across nations whose share market cycles were not perfectly 
correlated, investors could lower the risk of their investment returns at a given level of expected 
return. Also, the investors should keep in mind that the top-performing companies keep on 
changing every year. Thus, sticking to a particular nation or asset class could lead them to huge 
financial losses. The depreciating currency changes also prove fruitful to many investors and thus 
many financial institutions and advisors suggest having a globally diversified portfolio.
2. The Subtlety of Investing Abroad
The basic thing an investor needs to have before investing in the international share market is a 
Demat or trading account with an authorized and recognized broking house. As of now, an Indian 
investor can invest up to $2,50,000 (approx 1.88 crore rupees) under the Liberalised Remittance 
Scheme(LRS).  Brokerages for investing vary from 1 cent to dollars per trade, depending upon the 
plan one opts for. Investors can directly invest in overseas shares as well, but these kinds of 
trades require a significant amount of research and the right mindset while investing. 
3. Investments through Mutual Funds
The easiest way the investor can have exposure to an international stock market is by investing 
in mutual funds. Many Indian fund institutions have lucrative schemes for such investments in 
overseas equities. Some investors may have views against global diversification arguing that 
overseas investment may overlap domestic share capitals. But that is not the case, as companies 
tend to respond according to local and geopolitical events. The mutual funds are the easiest way 
of investing as it does not require a separate trading account. The mutual fund investments can 
be started through the SIP route as well with a bare minimum amount of Rs 500.
Conclusion:
An investor should always research and have an in-depth understanding of the economic and 
geopolitical factors of international trading. Investors should focus on their investment objectives, 
costs, and prospective returns before investing. A balanced and diversified portfolio with risk 
calculation always yields a good return to investors.
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