Never invest in a stock with long term view. Always review your portfolio once in three months. Why? Because 50% of the listed companies can become penny stocks in 10 years. The sector as a whole can be hitting the bottom.
Learn the art of picking stocks. Learn very basic fundamentals about the stocks. Identify 10 to 15 good sectors with 3 years timeline. Be aware about the business of the company you invest in. Know the best fundamental parameters to evaluate a stock.
Find 2 good stocks from a sector and invest in total 20 to 25 stocks. Don’t invest in lesser stocks, diversify to absorb market volatility and sector rotation volatility. You should remember that equity mutual funds have more than 40 stocks on average. Don’t invest in more than 40 stocks. It can become difficult to track.
With 6 months to 12 months view I like the following stocks:
- Jubilant life or Aarti drugs (Pharma)
- Sonata software or hexaware (IT)
- RBL bank or Bandhan Bank (Banking)
- L&T financial or JM Financial (NBFC)
- Bluestar or IFB Ind (Domestic Appliances)
- Meghmani organics or Sharda corp (Agro chemical / pesticide)
- Atul (Dye)
- Bajaj Auto or TVS motor or Endurance Tech (Autos)
- LG bro or Subros (Auto ancillary)
- HEG or Graphite (Graphite)
- Kansai Nerolac or Akzo Nobel (Paints)
- Apollo tyres or CEAT (Tyres)
- GNFC or Deepak Fertilisers
- GMDC or Hindalco or Nalco
- Stocks from plastics like Supreme ind or Nilkamal
- Chemicals like Vinati Organics or HSCL or NOCIL, etc
- Sectors like engg, real estate, machine tools, constructions, foods, petrochemical, FMGC, etc can also be scouted for good stocks.
Add above stocks to your watchlist, analyse fundamentals, learn about each company’s business, and learn to read some technical charts.
Do your homework before investing. Also ensure you have an exit plan for each stock.
Please do share if you like the answer. Normally, how do you invest?