Invest In US Stocks

When it comes to starting a new venture, learning a new skill, or redirecting your career, there is always a great amount of effort, research, and risk that needs to be taken to lay a strong foundation for success.  The same goes with saving a part of your income and investing it in a manner that gives you growth and timely returns. The pandemic changed the demography of the investment enthusiasts due to the entry of the cautious millennial investor and the curious tech-savvy Gen Z. These investors created a huge demand for companies that promoted environmental protection, animal welfare, and innovative technology solutions. However, while it’s often recommended that one starts investing at an early age, investing without familiarity and research is very risky. And there is no such thing as a “safe” stock!

That said, it is often recommended that young investors, instead of depending only on gut-feel, should spend time doing research and, if possible, seek the expertise of industry specialists to learn more about areas they could invest in based on market conditions. So how can a young investor leap into investing in US Markets?

There are many platforms and brokerages in India that offer US investing or global investing as a product. You can easily open an account with one of these, digitally. Once done, you have to send money into this brokerage account that you just opened. Here your bank will offer an overseas remittance facility. Many large banks help you do this through net banking. So it doesn’t take long to get organised for investing in the US companies. But that is the easy part. Identifying areas of investment, listing opportunities that interest you, evaluating companies and ETFs, and executing investment – these are steps that take thoughtful decision-making. Not so easy. So here’s some help. Following are some highlighted areas of investing and thoughts around why they might be of interest to young investors based on their interest and risk appetite.

Gaming software

Thanks to social media and its influencers, this industry has been taking multiple strides to improve the gaming experience and overall engagement amongst people of all ages. Much to our surprise, Gen Ys were one of the leading adopters of video gaming as the pandemic allowed them to spend more time at home engaging in fun activities with their children. Virtual gaming contests, team collaboration gaming apps, and live gaming sessions hosted by influencers shot up the demand for these companies by 40 per cent post the pandemic from only 5 per cent in 2019.

Entertainment/OTT

With Cinema’s operating at 50 per cent capacity in India to maintain social distancing as per the government regulations, many people took to OTT platforms to watch the latest movies and their favourite shows from the comfort of their homes. With subscription fees reducing and no active content on the favourite daily soaps, OTT platforms are expected to touch $5 billion by 2023 according to a Boston Consulting Group report making it a very attractive sector to invest in. So this is now a space for medium to long-term investors. Stocks in this space have grown 5-7 per cent every quarter.

Pet care

The global pet care market has taken the markets by a stir by showing significant growth in the past year. With advancements in pet care like food, grooming, medicine supplies, GPS trackers, pet camera, and treadmills, the pet care companies are expected to grow at a CAGR of 6 per cent every year between 2020 to 2027. The continuously increasing number of pet parents globally will make pet care a very attractive sector in the future.

Tech stocks

 Unsurprisingly, this is the fastest-growing sector in the US with a growth rate of 40-50 per cent year over year. With the spread of technologies like Cloud Computing, AI, E-conferencing, and virtual interactions, the typical technology company looks very different from what it did 5 years ago. Such growth and business dynamism lead to a constant uptick in the prices of stocks and resilience to economic shocks. Furthermore, looks, like the pandemic has pushed technology a few more years ahead of its time and most industry watchers expect tech stocks to grow 20-30 per cent in just a few years.

Renewable energy stocks

This has recently emerged as one of the favourite investing areas of the younger generation that believes in socially responsible investing. Renewable stocks and energy-efficient automobiles have seen a growth of 40-50 per cent and 20-30 per cent respectively post the entry of millennials in the investment space. This sector not only enables the investor to hold a strong asset in her portfolio but is also a long term investing area. With new US President Biden coming to power in the upcoming weeks, we can expect a stimulus package being given to these companies to boost their growth. Moreover, certain policy changes and global agreements planned by Biden may also help investors enjoy taxation and other consequent benefits due to their investment in these companies.

The author is Co-Founder and Co-CEO, Stockal Inc  

DISCLAIMER: Views expressed are the authors' own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.