Long Term Stock Picks India
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Before investing in the market for a longer period of time, those persons who want to invest should select those companies who give them some advantage.
Because these type of companies gives you immense profits for a longer period of time in the Indian market.
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Long Term Stock Picks India
Whether you are just starting out in investing, or you have been doing it for some time, this question has definitely come to you at some point.
Over time every investor works out their own system and process. While the details may be different, every successful system involves the same basic steps.
There are 3 things to keep in mind to choose a good stock.
- Go where good stocks can be found.
- Determine how much you want to invest in this stock.
- Know when to exit and how long to hold to maximize your profits.
How to Choose Stocks – Go Where Good Stocks can be Found
Much of the stock advice you find today centers around the idea of buying index funds and just holding on.
This is a massive cop-out. If you choose the right stocks then you have great benefits of it. In fact, if you know where to find the right stocks then you can easily choose it.
To know this, you need to understand a little about the different asset classes and investment styles and where to invest in the stock market.
Firstly you need to know the trading styles and classes of assets and where you have to invest.
In particular, we are concerned with small caps and micro-cap stocks (asset classes) and we are concerned with the value investing style.
How Much You Want to Invest in This Stock
We mainly focus on stocks of small caps and micro-cap and about the value investing style.
Most investors just randomly decide how many shares of a stock to buy. Perhaps it is done based on how much cash they have, or perhaps it is just a flyer they are taking on a stock with no real strategy behind it.
In fact, intelligent position sizing helps maximize the returns of the entire portfolio.
By expanding your time horizon, this is the best thing if you want consistent success in the share market.
But if you want to improve your financial condition in the market very soon then you have to pick ideas from the best long-term stocks.
Why small company stocks and value stocks?
The small caps and the value stocks are some of the best performings segment, it proves by some researches.
Long Term Stock Picks India
Another important point to consider is surplus cash and debt-free status. Money is required for running every business or doing the expansion.
Surplus cash or debt-free status always helps in the growth of the company. Debt Free companies are companies with zero debt.
Zero debt indicates that the company’s financial health is very good. They are capable to withstand any type of economic conditions.
The best example of a debt-free company in India is Bajaj Auto. Bajaj Auto generates enough revenue to finance all internal operations and investment requirements.
This stock has generated very good returns for the investors.
Another important point to consider is the management of the company.
The management of the company should be honest, dependable, dynamic and capable of handling any adverse situation.
The management should consist of visionary leaders and capable of making money and generating new business opportunities is always recommended to check the past performance history of the stock.
You should check out at least the past three years’ performance of the stock before making an investment. Past performance history is one of the indicators about the stock.
The concept of MOAT is very old. This concept is first invented by Benjamin Graham and Warren Buffett.
The meaning of MOAT is the competitive edge of the company against the competitor.
The competitive edge of the company can be because of multiple reasons such as monopoly products & services, affordable price, use of monopoly technology, high entry barrier, etc.
E.g Reliance enjoys a monopoly situation in refinery business in India due to the high entry barrier of cost and regulations. Another example could be Asian Paints.
Asian Paint is holding the largest market share in the Indian paint industry due to a competitive edge.
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‘Growth or appreciation’ is the primary goal of any stock investment regardless of your time horizon and risk profile.
Dividends, buyback opportunities, merger-demerger benefits etc are although still significant in providing additional advantages to your equity portfolio.
But when it comes to the best stocks to invest for the long term, you need to be choosy.
More importantly, you need to be aware of exactly where you want to put your hard-earned money into.
Just going by that primary definition of ‘appreciation’ let me explain an easy way of picking safe and sure-shot long term portfolio stocks.
I have two objectives here – first, to explain this simple methodology of picking steady growth portfolio stocks and second, to share a portfolio of 12 solid large-cap stocks that one can blindly invest and forget for the next 10 or 20 years to build massive wealth.
Well, I am not talking about lump sum investment here but one can keep buying these twelve stocks at every market correction opportunity OR at regular intervals (SIP) in order to build long term wealth.
This is also an attempt to answer some of the queries that I keep getting from the readers of this blog regarding steady portfolio stocks for the long term.
This article tries to give an answer to this question with a list of stocks from where beginners can pick stocks to invest in.
Also, such stocks have the potential to grow in the future although the growth may be less in percentage terms.
Investors can invest in mutual funds through NFO (New Fund Offer) or they can invest in existing mutual fund schemes.
The mutual fund invests the pooled money in different assets like equity, debt, corporate bonds, and money market instruments to build a diversified portfolio.
Long Term Stock Tips
This was largely day trading in stocks is an exciting market to get involved in. Stocks are essentially capital raised by a company through the issuing and subscription of shares.
While stocks and equities are thought of as long-term investments, stock trading can offer exciting opportunities for day traders.
The ability to short prices, or trade on company news and events, mean short-term trades can still be profitable.
This page will advise you on which stocks to look for when aiming for short-term positions. It will also offer you some invaluable rules for day trading stocks to follow.
You’ll learn how to pick stocks and when to trade them, as well as some intelligent strategies that could help you turn a profit.
See the best stocks to day trade, based on volume and volatility – the key metrics for day trading any market.
Stand sell. With the world of technology, the market is readily accessible. The liquidity in markets means speculating on prices going up or down in the short term is absolutely viable.
Also, stocks are relatively straightforward to understand and follow.
Whilst day trading in the complex technical world of cryptocurrencies or forex may leave you scratching your head, you can get to grips with the triumphs and potential pitfalls of Google and Facebook far easier.
This means identifying which stocks to trade intraday hopefully won’t be as challenging as it is in other markets.
premium valuations, increase in interest rate, global and domestic political risks and lack of earnings growth.
For example, intraday trading usually requires at least a couple of hours each day.
One of those hours will often have to be early in the morning when the market opens. Longer-term stock investing, however, normally takes up less time.
This is because you have more flexibility as to when you do your research and analysis.
In addition, intraday stock trading returns can exceed those of long-term investing. This in part is due to leverage.
This allows you to borrow money to capitalize on opportunities (trade on margin). However, with increased profit potential also comes a greater risk of losses.
On top of that, you will also invest more time into day trading for those returns.
You could also argue short-term trading is harder unless you focus on day trading one stock only.
This is because interpreting the stock ticker and spotting gaps over the long term are far easier.
You also don’t have to rush to make decisions. However, this also means intraday trading can provide a more exciting environment to work in.
One major advantage of CFDs and spread betting over traditional equity investment is the ability to “go short“.
There is no easy way to make money in a falling market using traditional methods. Day traders, however, can trade regardless of whether they think the value will rise or fall.
Overall, there is no right answer in terms of day trading vs long-term stocks.
Spotting trends and growth stocks in some ways maybe more straightforward when long-term investing. Having said that, intraday trading may bring you greater returns.
Volume is concerned simply with the total number of shares traded in a security or market during a specific period.
Each transaction contributes to the total volume. If just twenty transactions were made that day, the volume for that day would be twenty.
How is that used by a day trader making his stock picks? Volume acts as an indicator of giving weight to a market move.
If there is a sudden spike, the strength of that movement is dependant on the volume during that time period.
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If you want to begin your trading after a generous lie in, don’t be surprised when you struggle to make a profit.
The increase in trading volume is seeing the market only get faster. You need to be up at 8 am, prepping for the day ahead.
This will allow you time to undertake research and configure your monitors with the stocks you will be actively tracking that day.
Keep it short – Whilst yes you will make more money if you trade all day, day traders see the best returns when they trade for just 1-3 hours. You might make £750 in 2 hours and £1000 when you trade for 5 hours.
So if you’re looking at day trading stocks for a living, you might get the best return per hour if you trade in short bursts.
If after a number of green candles, the price creates two consecutive red candles, the uptrend has exhausted and a reversal is on the cards. Short positions should be used
If after a series of red candles, the price creates two consecutive green candles, the downtrend is exhausted and a reversal again is likely.
You should consider long positions.
These charts, patterns, and strategies may all prove useful when buying and selling traditional stocks. However, they may also come in handy if you are interested in the less well-known form of stock trading discussed below.
As you can see above, penny stock reviews highlight a number of serious concerns when these instruments are used for intraday trading.
Perhaps then, focussing on traditional stocks would be a more prudent investment decision. From above you should now have a plan of when you will trade and what you will trade.
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Once the exit poll projections came out, the market rallied for a short while, going back into volatile mode soon after.
Global and domestic macroeconomic factors have not been looking great.
While the market has been expecting a turnaround in the economy, demand has failed to pick up.
However, with a stable government at the center, and the Lok Sabha election behind us, we hope the focus will return to development issues and the government will utilize the mandate to push through some major economic reforms to prop up the economy.
Largecaps have continued to do well over the first quarter of FY20. During the 3 months ended June 30, the NSE Nifty 50 gave a return of 1.4% while the S&P BSE Sensex gave a return of 1.9%.
While not very high, it is still much higher than their mid and small-caps peers.
During the same period, the Nifty Midcap 100 and an index consisting of high liquidity midcap stocks listed on NSE, gave a return of -3.4% while the BSE Small-Cap index gave a return of -5.3%.
Keeping in mind the above factors, we decided to continue with our list from the last quarter, choosing stability over speculation.
Most of the funds in this category continue to do reasonably well, seen from the perspective of the current market turmoil, with a couple of exceptions.
Indian debt markets have been in turmoil since last year when infrastructure lending company, IL&FS, defaulted on some of its payments.
The crisis created a liquidity crunch in the market which led to other NBFCs failing to raise funds. This led to further defaults.
The biggest casualty being DHFL, a housing finance company that focuses on tier II and tier III cities.
Best Stocks To Buy For The Long Term
As any stock trader can tell you, the market can be
That’s why investment professionals typically recommend investors take a long-term approach to invest to reduce the risk of losing principal.
If you invest at the wrong time, you could lose a significant amount of your money overnight, so keep in mind that stocks are not always the best short-term investments.
Revenue – Revenue or net sales of a company should be constant for at least 5 years.
You may check that the company has been generating sales growth annually during the last 5 financial years of at least 10%.Net Profit – Net profit of a company increases at least 15% on a year-on-year basis. Earnings Per Share (EPS) – EPS is to be and grow at a rate of 10% for the last 5 years.
Price to Earnings Ratio (P/E) – P/E ratio should be low as compared to the other peer companies active in the same industry.
Price to Book Ratio (P/B) – P/B should be low as compared to peer companies operating in the same industry.
Debt to Equity Ratio – A debt-free company is desirable. If not so the ration must be low to 0.10 or 0.25.
Return on Equity (ROE) – should be greater than 20%
Dividend Yield – You can ensure about good dividend yield by the company.
Beta – Invest in stocks whose Beta is less than 1 which indicates that the share is theoretically less volatile than the market.
After checking out the above-said parameters of a com.APL Apollo Tubes Ltd. is the largest Electric Resistance Welded (ERW) steel pipes producing company.
It is one of the largest section pipe & tube manufacturers in India.
The company’s vast distribution network is spread across India with warehouses and branch offices in 25 cities.
Best Indian Stocks For Long Term Investment
If you have a long-term investment horizon, a short-term fall in prices or even a downturn in prices over the medium term isn’t something that will hurt you.
It’s not nice, it doesn’t feel good, but unless you sell your shares at the bottom of the market, then a price drop won’t dent your wealth over the longer term.
So, how can an investor take advantage of volatile markets? While there’s no way of knowing whether the stock market has further to fall, there’s no point trying to pick the bottom, according to Morningstar head of equities research Peter Warnes.
The important point is that prices are much lower now than they have ever been for many quality stocks, and while the stock market might be correcting, we aren’t experiencing a crisis.
“The key is to distinguish between a genuine economic crisis, which may depress share prices for many years, and a market correction, where prices may fall, but not necessarily for an extended period of time.
What you are trying to avoid is catching a falling knife, which can happen when you have a crisis or a black swan event on your hands,” Warnes says.
Warnes recommends a gradual approach rather than going on a buying spree. “Feed your money into the market gradually.
We don’t recommend you go at it all at once. Rupee cost averaging is always an effective way to invest and it’s a good idea to keep some money on the sidelines for when markets correct,” he says.
To have a predisposition to buy and hold for the long-term can be an extremely expensive frame of mind.
Good Shares For Long Term Investment
The long-term market trend is up, but in a volatile stock market, the long-term gain is often laden with risk and not nearly as great as many short-term gains.
Risk vs. return has greatly increased in the long-term stock market investor.
People argue that tax consequences are their reason for holding.
That argument lacks weight. It is very difficult for some people to break away from old habits and patterns of thinking about the stock market.
Those who are unwilling to learn from market crashes are doomed to repeat the lesson.
A few years ago, investors were told that to buy and hold for the long-term was the wise course of action for investors because the long-term trend of the market is up.
If you took any other approach, you were a “speculator” or a “gambler.” Brokers and mutual fund managers were the most vocal proponents of this investment philosophy.
The media also joined the chorus and the concept became a part of the “accepted” market lore.
Investor thinking, in this regard, lost elasticity. What was overlooked was that selling a stock that has entered a phase of heightened risk actually reduces portfolio risk, whether it has been held a year or not.
It is important for us to have clarity about the main issues relating to the length of an investor’s holding period.
The new volatility of the market is probably here to stay.
The current reality of the market is that in given year stocks will often undergo multiple price swings in which the magnitude of those short-term swings is often equal to or greater than the magnitude of its 1-year price movement.
Best Indian Stocks For Long Term Investment
Even stocks that lose money if held for a year may be very profitable at several times during the year.
Unless the long-term expected gain is much greater than the average return on stock investments, it is a high-risk gamble to retain a stock that has moved up 20% in only 2 months once its charted growth rate has started to show signs of breaking down.
The probability is that holding on to such stock to meet a 1-year long-term tax requirement will cost way too much.
When stocks move up rapidly, it is common for them to vigorously and abruptly “correct” to the downside once they begin to break down. It’s like a crowded auditorium in which someone yells, “fire!” Everyone wants out at once.
Potential buyers then become like those outside the auditorium waiting to get in. When they see all the people rushing out in a panic, they naturally decide to wait and watch rather than enter.
Thus, while the potential buyers wait, the stock plummets. The potential reduction in the investor’s tax rate resulting from a long-term holding period is not sufficient to make up for the substantial risk of loss.
If you have a 20% gain, why not take it rather than losing it? Selling in less than a year is fairly easy to justify under these conditions.
Though the figures can vary depending on how you file, even at the highest tax rate it would still make more sense to sell under such circumstances (tax rates may be somewhat different when you read this but the point remains the same).
For example, even if your income were $500,000 a year and you had no deductions, 3 short-term gains of $18,000 or 2 of $27,000 would net you more after taxes than one long-term gain of $40,000 taxed at 15%, regardless of how you file.
Best Stocks To Buy In India For Long Term 2019
An example of a validated alert would be if a stock is placed on the “watch list” because an alert signaled that the stock has declined to its rapidly rising 50-day moving average.
As the stock nears its rising 50-day moving average, you would put it on your “watch list.”
The confirmation occurs if the stock reverses its downward direction after touching its rising 50-day moving average (institutional investors tend to be buyers at such times).
The alert announces “Here is one to watch!” The “trigger event” says “it’s time to act!” The trader uses alerts because time is money.
To achieve maximum returns on his money, the trader attempts to keep his portfolio fully invested in profitable positions.
Any time a portfolio has a non-performing position, that portion of the portfolio exerts a drag on the result of all the positive work being done by the performing positions.
Why buy a stock just because it has a “good story” and then wait for 6 months for it to make any progress when a simple alert system can really direct you to stocks that are about to move now.
By using alerts to create “watch lists,” you can dramatically cut your wait time for the performance.
Traders at Stock Disciplines generally wait no more than 2 weeks for the expected move. If it doesn’t occur, they know that the setup failed and that it is time to look elsewhere.
They have to have a very good reason to keep holding.
That is, taking several small short-term gains in a choppy market can be more profitable than hanging on to a stock in the hope of obtaining a larger long-term gain.
Long Term Investment Stocks In Indian Market
Furthermore, in an environment where the long-term gain is unlikely to be obtained (and where the gains already achieved are likely to be siphoned off by the market), it makes even more sense to lock in the profits already obtained once a stock’s pattern begins to break down.
Let’s assume a trader (or investor) likes to maintain 10 positions in his portfolio. Each position is a “slot” or “basket.” Every time a stock is purchased, a slot or basket is filled. If any basket has no position in it, that basket is non-performing.
If our trader averages 7 positions over the year, then 3 empty baskets have dragged down the performance of the other 7.
Instead of averaging 40% for the year (assuming each position gained 40%), the portfolio will gain only 28% (assuming little or no interest for the empty slots).
If the trader has an alert system that tracks several thousand stocks while monitoring a variety of alert “setup” conditions, then when the portfolio sells a position, it won’t take long for the alert system to find another “setup.”
The alert system also increases the odds that the trader will not have to wait long for the new stock to perform. The alert system can notify the trader if either a “buy” or a “sell” setup is emerging.
If the trader has sold a position but the alert system cannot find a replacement buy candidate among several thousand stocks while using a variety of alert strategies, then the market is probably not trending but simply moving sideways or declining.
An alert system, therefore, has a “built-in” discipline that keeps the trader from filling empty portfolio slots with non-performing stocks.
Best Stocks To Buy In India For Long Term
If the alert system cannot find any stocks that are set up for a significant move, then why buy anything?
Why do traders at Stock Disciplines consider StockAlerts reports to be superior to reports found on most websites? To begin with, StockAlerts is based on a pre-screened stock universe.
That screening eliminated many (but not all) “junk” stocks. In addition, our search algorithms are more complex, requiring more complete or better “setups.”
For example, some websites might find stocks that have penetrated a Bollinger band but StockAlerts finds stocks that penetrate a Bollinger band AFTER a Bollinger band squeeze (a period of low volatility). That factor alone makes a very big difference in the quality of the signal.
Let’s say you are looking for stocks that satisfy the 4-week rule originated by Richard Donchian. Some scanners will find stocks that close above their highest price for the last 20 days.
That means any stock making new highs can satisfy the filter.
Is that what you really want from the filter? That’s possible, but there is something better. What you really want are stocks that have broken out of a 4-week consolidation pattern.
The sideways pattern is important because it represents consolidation.
That is, the old shareholders are nervous about the stock and are bailing out while new shareholders that are believers in the stock are replacing them. You want stocks that have been going sideways but that are now resuming their upward climb.
Our Bollinger Band Squeeze alert delivers that.
A squeeze results when a stock goes essentially sideways (during this consolidation time volatility is usually low because there is a relative balance between buyers and sellers).
Our alert system is designed to signal an upper band penetration only AFTER a squeeze.
Top 10 Stocks To Buy For Long Term
This also satisfies the purpose of Donchian’s channel breakout rule. We know of no other stock filter that can do that.
Our algorithm does not specify that the stock has to consolidate for exactly 4-weeks. However, it does require some “consolidation” or a “quiet” period before the breakout. A mutual fund is a kind of investment program that is funded by unitholders.
The funds are professionally managed and pool money from many small and large investors. Such funds run various schemes and are managed by well experienced and trained fund managers.
These schemes usually issue units of their funds to the investors in lieu of the invested funds.
The schemes, in turn, invest collected funds in various instruments depending on the type of schemes. The schemes run by mutual funds, can either be equity-focused, debt-focused or a balance of both equity and debt.
Nowadays various hybrid funds are also in the market, whose discussion is beyond the scope of the present article.
Thus, mutual funds whose schemes invest in Indian stocks are studied for the present article. Before moving deeper into the stocks on which these funds are betting let us look at the following data in the next paragraph which advocates the relevance of tracking mutual funds’ investments for picking stocks from mid to long term perspective.
For answering this let us dig deep into how fund managers pick any stock for schemes administered by them.
The sole responsibility and accountability for the performance of the schemes are the fund managers. They then analyze the company under consideration properly which in turn is guided by the long-term potential of the stocks.
They generally avoid momentum investing in any stocks.
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Long term Investment is one where you invest your money for a fairly long period of time. Here, the investment is spread over a longer tenure to meet your long term financial goals.
Investment is done for a period of more than 3 years, in some cases, 5 years is generally considered as a long term investment.
For some long term, period it goes beyond 10 years as well.
Just remember, Insurance and investment are two essential components for building a long term investment plan.
They should not be mixed and kept separate to achieve different financial goals.
Insurance aims at providing financial security to you or your family. While investment is to grow your money.
PPF is the most common and one of the traditional long term investment options in India.
PPF is considered as one of the safest and most tax-efficient tools.
When you invest your money in PPF or Public Provident Fund, there is an assurance that you will get fixed returns at maturity and there is no risk involved.
Investing in gold jewelry has been a traditional way of investment for people around the globe especially Indians.
Other than gold jewelry, one can invest in gold in various other ways like Gold ETFs, Gold Mutual funds, Gold Deposit Scheme, etc.
Gold prices are rising high for the past few years but still, it hasn’t lost its luster. People love investing their money in gold and it yields very good returns.
Tired of paying the monthly rent, most of us wish to buy our own house or a piece of land where we can build our dream home.
If planned in a proper way, you can invest your savings in the real estate sector.
But, you have to be very careful while choosing the right option since this involves huge investment.