The difference between the U.S. stock market and the Indian stock market
1. The U.S. stock market and the Indian stock market
The U.S. stock market and the Indian stock market are different in many ways. As investors, understanding these differences is very important in determining how we diversify our investment portfolio. The U.S. stock market has always been a mystery for Indian investors, but U.S. investment has been publicized many times, for example, "The performance of the U.S. index over the past decade is 8-15% higher than that of the Indian market." However, past performance does not guarantee future returns. For the US stock market, we use the Dow Jones Industrial Average, and for the Indian market, we use BSE Sensex.
2. The difference between the U.S. stock market and the Indian stock market
1. Market value. It shows the size of the head office in these countries. Get the stock in the stock market and multiply it by the current price. India has climbed two ranks in 2020, ranking eighth among the world's largest stock markets (as of December 2020). The country's market value exceeded the 2.5 trillion U.S. dollar mark. The US stock market is at the top of the list, and the New York Stock Exchange alone has a huge market value of more than $25 trillion (as of March 2020).
2. Listed securities. In India, as of October 2020, the total number of companies listed on the country’s NSE, BSE and other stock exchanges exceeds 7,400. In the U.S. stock market, approximately 6,000 companies are listed on the Nasdaq and the New York Stock Exchange.
3. Performance. In the past ten years, DJI has created a compound annual rate of return of 9.75%, and Sensex has created a return of 9.70% in the past ten years. In the first five years of this decade (2011-2015), the compound annual growth rate of the US stock market was 12.86%, while the compound annual growth rate of the Indian market was 12.11%.
4. Volatile. Volatility is a good indicator of the ups and downs of the market in a certain period of time. This is an important factor because the riskier market will force you to sell ahead of time. In the past ten years, the volatility of DJIA was 3.92% and that of BSE Sensex was 5.06%. Therefore, compared with the US stock market, the Indian market has been more risky in the past.
5. Other global factors. Certain other global factors may involve the development of markets in the economy. In India, the law requires companies to be profitable for three consecutive years before they can go public, which sometimes prevents investors from showing confidence in the new business model. In the United States, the requirements are relatively loose, so investors can easily invest in innovative models around the world. This is a key factor in comparing the two stock markets, as investors may want to keep their portfolio updated with ever-growing opportunities.