When it comes to investing in the stock market, it is always better to become a long term investor rather than becoming a trader. It is relatively highly risky to do intraday trading or trade in futures and options. As an investor, one should focus on creating long term wealth through equity markets and not just short term gains which are based merely on chance. We all understand that gambling only works when luck is on your side. So why get into all that and expose your money to greater chances of loss.

The stock market is no doubt an amazing investment avenue to create wealth if used in the right way. One needs to make informed decisions regarding financial investments. When we say stock market, it does not only mean Indian Stock Market. Investing in stocks is like investing in companies that you have confidence that will grow in the future. This means not only Indian companies but also international stocks have a great scope in growth when it comes to stock investing.

What are the goods and services you use on a daily basis?

Think about watching movies on Netflix, placing orders on Amazon, using an Apple’s iPhone or the most used search engine – Google. All these companies are based internationally and are listed on international stock exchanges.

Don’t you want to invest in these companies, the product/services of which you are using intensively on a regular basis?

So, in keeping with the view of going global, let us see some benefits of investing internationally.

Global Diversification

This is one of the most important benefit of all as there is a tendency of investing a major part of the portfolio in Indian/ domestic equity market. Investors usually ignore the benefits of diversification into the international equity market owing to unfamiliarity. In India, approximately 99% of investors invest only in Indian stock market which indicates resistance to invest globally.Another fact is that India accounts for only 3% of the global market capitalization. It means even if you think you are diversifying your money among different sectors, you are only being exposed to a tiny part of what the world is offering.The major problem with restricting yourself to only domestic markets is that it raises your portfolio’s concentration risk of investing in just one economy.The strategy should be to diversify your investments across nations whose market cycles are not perfectly correlated. As we all know, there is volatility in stock markets. Thus, it is recommended to not make all your investments in a pa