InvestorQ : Why should an investor invest in stocks of different countries?
Ishita Jain made post

Why should an investor invest in stocks of different countries?

Answer
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Pratik vyas answered.
2 years ago


To answer your question in one word- diversification.

Just like you buy stocks of various sectors and industries to ensure you balance your investment portfolio, similarly buying stocks of different countries helps balance your portfolio by having exposure to stocks of various other countries.

By investing in foreign stocks, you can widen your investment horizon. Let’s say something goes fundamentally wrong for India and its equity market. This could be political upheaval or threat of war, both issues whose impact will be contained in India itself. This means that the domestic market can see some short-term correction. However, at such a time, you can be rest assured that your money will still grow owing to the exposure you have in foreign markets

Additionally, there are numerous companies abroad that have stellar growth trajectories and you might want to be part of its growth story. So, investing in them is one of the best ways of profiting from its strong growth.