Hi all, I am new to the Zerodha, I have already created and setup my demat. Need help from experts here to get guidance on what stocks to buy for long term which are stable and gives a decent profit.
By long term i meant Atleast 10 years.
Just buy the nifty index and sit tight for the next 10 years.
I second it
Nifty index.
Instead of asking what stocks I should buy, ask how should I chose stocks for long term, how to analyse the stocks this will be beneficial in the long run
Check out the fundamental series on varsity if you like to analyse based on fundamentals, you can also check the technical analysis module if you are interested in technical analysis.
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whenever Nifty crashes buy NiftyBEES
My guidelines:
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Never ask anyone what stocks to buy or take a tip or buy because some big shot bought it or succumb to FOMO.
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Understand what’s comfortable to you in terms of risk, like am I ok if I lose money? Invest no more than 1% of your capital in a single stock.
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Know what you are buying. If you bought ITC and have an understanding that it generates most of its revenue from cigarettes then stick to 1% of capital allocation. If you want to allocate more then you have to learn about their margins, taxes, expansion plans, and demergers, even then no more than 5% if you are a beginner.
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INVESTING OR TRADING IS A LONG-TERM GAME. We start now and if we enjoy can do it for life.
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Have some plan for every trade/investment. A plan should have a few things written (preferably)
a. Why am I buying? Does it fit my strategy?
b. What is my entry, and exit?
c. What is my position size?
Ex: I bought XX company because it is trading below book value.
My exit is 1.5 times the book value, so if a company performs better book value increases I will make a profit and make a loss if the book value decreases.
Note: I defined my entry and exit for my trade. (Position size 0.1% of capital)
Ex2: I bought XX nifty 50 company because it is paying a dividend and growing dividends for the last 16 years. I have not defined an exit for this because it is my long-term holding (which doesn’t mean I will never exit this stock). I will exit when the company does not pay dividends for a few years or the company makes losses. I bought the company when EPS is 205.24 and will track EPS for years to come and will make a decision when EPS falls drastically. (Position size 1% of capital)
- If you want to know where to start then books are the best starting point.
One up on wall street
What Works on Wall Street: The Classic Guide to the Best-Performing Investment Strategies of All Time
Trading in the zone
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As a beginner you can probably start with actively or passively managed mutual funds. In this way, you will be invested in the market and also get some experience of the volatility of the market. Next step would be to start reading on fundamental analysis and do research on certain companies on your own. In this way, you will be able to create your own portfolio. Don’t try day trading or derivatives now. It will come much later.