Should You Invest Overseas?

Many broking firms are facilitating investments in International markets. Here’s the low down on the challenges and risks

- Teena Jain Kaushal

Delhi-based housewife Archana Gupta wants to send her 14-year-old daughter abroad for higher studies. There is, however, one big challenge before her. The 45-year-old is worried about the depreciating rupee, which means she will have to shell out more than just the college fees to cover the currency risk. Consider this: On December 20, 2011, $1 was equal to ₹52.77, while on December 20, 2021, it was equal to ₹75.84. It is for this reason that she and her businessman husband are considering investing in equities in international markets as, along with higher returns, it also hedges against currency fluctuations.

There are many like Gupta who are investing in international markets to build a fund that eliminates the currency risk. Direct investing is possible in the stocks of several countries, but investing in US stocks is considered the most popular as the New York Stock Exchange (NYSE) and NASDAQ are the world’s largest stock exchanges. “One can invest in some of the world’s largest technology companies like Apple, Tesla, Starbucks, Nike and Meta (Facebook) when investing in the US stock markets. Such investment opportunities are not available via local stock markets,” says Viram Shah, Co-founder and CEO of Vested Finance, a California-headquartered company, which is a registered investment advisor with the US Securities and Exchange Commission (SEC).