• HDFC
• 01 Oct 2018
• Equity Product

HDFC, Tester

Are you new to the stock markets? Are you still hesitant in making your initial few stock purchases? Are you confused about which stocks you should begin with?

With almost 5000 companies listed on BSE and 2000 companies listed on NSE, it is quite natural for you to feel confused with regards to your stock selection. However, you should remember that the stock market is one of the best possible place where your invested money can fetch great returns, provided you have the patience to hold stocks in your portfolio.

In this article, we have covered the types of stocks you could invest to start your stock investment journey.

1. Invest in Long-Running Companies / Brands: Companies like HDFC Bank, Reliance Industries, Maruti Suzuki, etc. are known to most of the investors. These are big brand names and have been existing in the stock markets for a very long time. You can easily buy these stocks and keep them in your portfolio for years to come. The profits that you will earn over a decade from such stocks would be significantly higher than what you can earn from other investment avenues like fixed deposits, PPF, etc. They may test your patience but will give just rewards in due course of time. Take the example of Reliance Industries. For several years up to 2016, the stock price didn’t fluctuate much and hovered around the same levels. However, anyone who invested in Reliance before 2016 has probably made more than 100% profits in the last year alone. On the other hand, the share price of HDFC bank has witnessed a steady rise over a short period of time. HDFC bank stocks were trading around Rs.1000 in 2016 and as on September 2018 the share price was Rs.2000 – almost 100% rise.

2. Invest in Market Leaders: When it comes to cars in India, Maruti Suzuki is one of the oldest and longest running companies. It has established itself to be a market leader and the share price trend indicates the same. Before 2010, you could have purchased the Maruti Suzuki shares for approximately INR 1000. In 2018, it has crossed INR 8000. A Maruti Suzuki investor has gained manifold returns in 10 years. The idea is to pick such market leaders in other industries and be patient with them for several years. They could turn into real wealth creators for your equity portfolio.

3. Invest in Non-penny Stocks: There are over 2000 companies whose stock price would be around Rs.10 or less than that. Such companies with low stock price value, low liquidity of stocks, and low market capitalization are known as small cap companies or penny stocks. You should stay away from them for multiple reasons *link to article about penny stocks*. Focus on companies that have high liquidity of stocks, significant market capitalization, and a strong history. You can get relevant information about the companies on our website to enable you to to identify the right ones!

4. Invest in Stocks Delivering Strong Annual Results Consistently: Since you will be investing your hard-earned money in stocks, it makes sense to research before you start investing right, left and centre. A basic analysis of the information readily available on websites like ours or even on the official company sites will help you in the long run. For example, keep a track of the annual results of your target company for the last 3-4 years. If a company has been consistently delivering stellar annual results, you can easily add its shares in your portfolio for long-term gains. Remember, only a company with strong fundamentals can deliver good results on a consistent basis.

 

All the above stock ideas point towards one thing – pure quality and strong fundamentals. To ensure your investment is safe and for the long-term, these types of stocks are ideal for your equity portfolio! In fact, these are apt not just for beginners, but for all experienced investors as well. So, what are you waiting for? Get started right away.