Direct investors in foreign equities should make a cautious start

When investing directly, go with exchange traded funds and curated portfolios initially and graduate to individual stocks once you have found your footing

Indian investors have always had a massive home bias in their investment portfolios. Their assumption has been that since India’s GDP growth rate is much higher than that of the developed markets, their portfolios would grow much faster if they invested their money in the Indian stock market. However, things have not quite worked out so. Experts say a portfolio built from stocks of various leading foreign giants has the potential to outperform portfolios built purely out of Indian stocks, because the former would contain global leaders who benefit from growth not just on their home turf but globally.

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