Many investors are being advised by their broker to start putting funds in international markets especially when investing in foreign markets like the USA has become quite popular recently.
Experts are advising investors especially those who do not have any children and no dependents, they are first advised to build a strong diversified portfolio in India after that it is advisable to explore foreign options. If it would be suitable, your financial agents would have told you at the time of planning your portfolio.
Instead, people think lately that because of no dependency they can take risk and they should diversify their portfolio with other markets. Answer to this psychology is first to build a strong portfolio in India then diversify. Risk-taking capacity is good but it needs to be calculated.
Portfolio diversification with multiple economies or geographical diversification is beneficial especially with the ongoing India-China dispute but it makes sense in investing in international markets only if investors plan on traveling there or sending their pupil for studies abroad or to start a new company……… then investment makes sense as it would help in mitigating the currency fluctuation risk.
Before going for international funds, investors also need to think if they are capable of tracking possible political or economic disturbance in another country. Problems can happen anywhere and you may not have enough time to record different markets of different countries.
Diversified portfolio idea is good but one should be certain with the right asset allocation in the Indian market first. For example, you are in the financial planning business and there is a crash in the financial market, so, you cannot just start selling clothes to minimize your risk. People puzzle diversification to limit risk but this is more of gambling than diversification. The same theory applies to investment.
If the idea is to get exposure then investors can invest in foreign markets through mutual funds that involve international market allocation or to choose ETFs on an exchange, as a safer option. Moreover whether its India or anywhere else, Mutual funds are the safest option. But before all of that, you need to focus on asset allocation and financial planning first.
Last but not least would be the natural option of considering stocks but it would be only advisable to those who have enough time, money, and expertise in the stock market.