Investing In Meta: A Guide For Indians

Investing in Meta (formerly known as Facebook) from India can be done through various avenues. One of the most popular methods is to invest directly in Meta stocks, which can be done via brokerage platforms such as INDmoney, Stockal, or a US brokerage account. Another option is to invest indirectly through Mutual Funds or Exchange-Traded Funds (ETFs) that hold Meta stocks or follow indices where Meta is listed. Mutual Funds such as Nippon India US Equity Opportunities Fund, ICICI Prudential US Bluechip Fund, and DSP US Flexible Equity are options for indirect investment. ETFs like Russell 1000 Growth ETF and Vanguard S&P 500 ETF are also viable choices. It's important to consider the advantages and disadvantages of each investment method, such as market risks, ownership, and associated fees.

Geographical diversification

Meta Platforms is a global tech giant that owns and operates the world's most popular social media and messaging platforms, including Facebook, Instagram, and WhatsApp. Investing in Meta offers a great opportunity for geographical diversification, especially for investors in India. Here's why geographical diversification is beneficial:

• Containing Investment Risks: By investing in US stocks like Meta, you can diversify your portfolio geographically. This helps contain investment risks and stabilize returns. When the domestic market underperforms, investing in US stocks allows you to capitalize on the growth of the US market.
• US Market Performance: The US market is the world's top market in terms of market capitalization, listing most of the biggest companies across all industries. Investing in Meta gives you exposure to the strong US market and the potential for high and stable long-term returns.
• Strong US Dollar: When investing in Meta from India, your rupees are converted into dollars before purchasing shares. This allows you to capitalize on the strong and appreciating US dollar. The USD-INR exchange rate has seen an increment of 66% in 12 years, offering an extra return on your investment over time.
• Fractional Investment: Meta shares are expensive, with 1 unit of stock costing around Rs 16,500. However, fractional investment options are available when investing in Meta from India. This means you can own a fraction of a Meta share based on the amount you wish to invest, making it more accessible to investors with varying budgets.

By investing in Meta, you're not only investing in one of the biggest tech companies in the world but also diversifying your portfolio geographically. This helps reduce risk and stabilize returns, especially when the domestic market underperforms.

US market performance

The US market is the world's top market in terms of market capitalization. It lists most of the biggest companies in the world across all industries. Investing in Meta gives you the chance to earn high and stable returns in the long term.

Meta is one of the biggest tech giants in the world. It controls the world's most used and popular social media and messaging platforms such as Facebook, Instagram, and WhatsApp. With a market capitalization of around $590.21 billion, Meta is one of the best US companies to invest in.

There are a number of benefits to investing in US companies like Meta. Firstly, investing in Meta helps you to diversify your investment portfolio geographically. Geographical diversification helps you to contain investment risks and allows you to stabilize your returns. When you invest in US stocks like Meta, you get the chance to capitalize on the growing US market even when the domestic market fails to perform as per expectations.

Secondly, the US market performance is strong due to the strong US dollar. While investing in Meta, you will be paying in rupees that get converted into dollars before the shares are purchased. This gives you the advantage of capitalizing on the strong and appreciating US dollar. In 2010, the USD was around INR 45, and now it is over INR 75. This translates to an increment of 66% in 12 years. By investing in Meta, or any other US stock, you can earn this extra return over the years of your investment.

Thirdly, the US market is a good option for fractional investment. When you invest in Meta shares, you will have to pay around Rs 16,500 to own just 1 unit of the stock. However, investing in Facebook in India gives you the benefit of the fractional investment feature. With fractional investment, you can also own a fraction of Meta shares based on the amount you wish to invest. For example, if you have Rs 5,000 to invest in Meta, you will get 0.3 units of the stock. With this feature, you can use your capital to invest in multiple stocks and diversify your US stocks portfolio.

Strong US dollar

A strong US dollar can be beneficial for investors in Meta from India. Here are some reasons why:

Geographical Diversification

Investing in Meta stocks allows you to diversify your investment portfolio geographically. This helps contain investment risks and stabilize returns. When you invest in US stocks, you can capitalize on the growing US market even if the domestic market underperforms.

US Market Performance

The US market is the world's top market in terms of market capitalization, listing most of the biggest companies worldwide across all industries. Investing in Meta gives you the opportunity to earn high and stable returns in the long term. Meta stocks have proven to offer substantial returns to investors over time.

When investing in Meta from India, you pay in Rupees, which are then converted into US Dollars before purchasing the shares. This allows you to capitalize on the strong and appreciating US Dollar. For example, in 2010, 1 USD was worth around 45 INR, and now it is over 75 INR, translating to an increment of 66% in 12 years. By investing in Meta or other US stocks, you can benefit from this long-term currency appreciation.

Rupee Depreciation

The Indian Rupee has been depreciating against the US Dollar, which makes it more expensive for Indians to spend on dollar-denominated expenses, such as their children's education fees. By investing in US stocks like Meta, you can hedge against further depreciation of the Rupee and protect yourself from higher costs in the future.

Returns in US Dollars

Investing in Meta from India gives you the opportunity to earn returns in US Dollars. This can be advantageous due to the depreciation of the Rupee against the Dollar. You can benefit from the appreciation of the Dollar and increase your purchasing power in India with the returns you make.

While a strong US Dollar provides these benefits, it's important to consider the potential disadvantages as well. A strong dollar can negatively impact US companies that conduct a large portion of their business globally, as their foreign sales revenues will decrease in value. Additionally, a strong dollar can make tourism to the US more expensive for foreign visitors, and US-made goods more costly abroad.

Fractional investment

Fractional investing also makes purchasing US stocks more economical. For example, the stock price of Warren Buffett's Berkshire Hathaway is around $5.15 lakh, which is almost Rs 4.27 crore. However, with fractional investing, you can buy a small portion of this stock for a much lower price.

While fractional ownership is not currently allowed in the Indian stock market, there is hope that this may change in the future. The market regulator SEBI is working on introducing the concept of fractional shares in India, which would be a game-changer for retail investors, making the stock market more accessible and providing a wider range of investment opportunities.

Performance of Meta

Meta Platforms, Inc. (META) has shown strong performance and growth in its Q3 2024 results, marked by revenue growth and a strong commitment to AI and the metaverse. The company has a market capitalization of around $590.21 billion, with its stock price surging over 1000% since its listing on the US stock market. In the last 5 years, the stock has gained over 60%, and its earnings are forecast to grow 10.85% per year.

Meta's EBITDA (profitability) has more than doubled to $54.72 billion, and its revenue and EPS have more than doubled to $117.93 billion and $13.77, respectively. The company's cash flow has also been steadily rising over the years.

Meta's investment in AI and smart wearables is expected to enhance user engagement and boost advertising revenue, with WhatsApp's business messaging driving revenue growth in its Family of Apps segment. Additionally, infrastructure investments are likely to improve efficiency and long-term earnings.

However, there are concerns about the performance of its Reality Labs segment, which is expected to continue seeing underwhelming active user numbers. The metaverse software, Horizon Worlds, may struggle to gain traction due to concerns about an overly digital world, and developer support for metaverse apps is expected to remain weak.

Despite these challenges, Meta remains one of the biggest tech giants in the world, controlling popular social media and messaging platforms such as Facebook, Instagram, and WhatsApp. Its strong performance and market position make it an attractive investment opportunity.

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